FCF Life Science Research 3rd Life Science Venture Capital Report – Financing Trends in Europe and the US Fungi Penicillium
Part of FCF Life Science Research Series Executive Summary FCF Overview Funding Development in 2018 Life Sciences: A closer Look C r o s s - border Investment Activity Investor Analysis Life Science Exits
2 Executive Summary
The FCF Life Science Venture Capital FCF Life Science Venture Capital Report Recipients Report is a is a comprehensive, standardized analysis for biotechnology, The FCF Life Science Venture Capital Report targets the following standardized report pharmaceutical and medical technology companies, examining recipients: focusing on venture recent venture capital deal trends in the European life science ▪ Corporates / Executives ▪ Venture capital investors capital deal industry ▪ Institutional investors ▪ Family Offices / High- characteristics in the ▪ Private equity investors net-worth individuals biotechnology, ▪ Advisors Selection of Companies pharmaceutical and medical technology The selection of companies is based on the following criteria: Availability segments, and can be used as a quick ▪ Companies operating in the biotechnology, pharmaceutical, The FCF Life Science Venture Capital Report is available on FCF’s reference for medical technology, services or other life science related sectors website at “https://www.fcf.de/de/research/life-science-research“ investors, corporates ▪ Sole focus on transactions involving European life science and professionals companies Data
▪ The therapeutics sector is further divided into the following All input data is provided by Pitchbook, S&P Capital IQ or More advanced, indications: Oncology, Central Nervous System, Infectious GlobalData and is not independently verified by FCF. Ratio and detailed and / or Diseases, Immunology, Ophthalmology, Rare Diseases, multiple calculations are driven based on the input data available. Respiratory, Diversified and Others. customized reports For additional information and disclaimer, please refer to the last page are available upon request To recommend colleagues or fellow investors to be added to the If you have questions, comments or ideas, please do not hesitate mailing list, kindly send an email with the respective contact to contact us information
3 Executive Summary FCF Overview Funding Development in 2018 Life Sciences: A closer Look C r o s s - border Investment Activity Investor Analysis Life Science Exits
4 FCF Overview
FCF seeks to provide Who We Are Capital Markets Capabilities and Services its clients with ▪ Specialized investment bank and financing specialist financing solutions Private / ▪ Venture capital ▪ Private equity ▪ Advising public and private small / midcap companies Pre-IPO ▪ Growth capital (i) at the lowest cost, ▪ Advisor for structuring and placement of financing transactions: ▪ Initial Public Offering (IPO) pursued in tandem)
– All instruments: Unbiased approach to all available corporate Equity / Capital increase ▪ Private Investment in Public (ii) with the highest Public ▪ Dual-track (IPO and Equity (PIPE) flexibility, financing instruments (no product selling approach), allowing alternative transaction ▪ Block trade for customized financing structures (iii) in the shortest ▪ Receivables / Factoring / ▪ Working capital / Revolving – All investors: Close and trusted relationships with senior period of time, Short-term ABS credit facility executives of virtually all relevant equity and debt investors Debt ▪ Borrowing base / ▪ Guarantees / (iv) with the highest – Fast process: Process management skills and direct / personal Inventory Letter of Credit closing proba- access to institutional debt and equity investors enable fast ▪ Bank loan facility / ▪ Promissory note Syndicated loans (Schuldscheindarlehen) bility, and with transactions
Debt Long-term ▪ Sale-and-lease back / ▪ High-yield / PIK bond (v) financing partners Debt Leasing ▪ Second lien / Subordinated ▪ More than 100 transactions with a total placement volume in ▪ Corporate bonds (public / loans that integrate well excess of EUR 4.0 billion since foundation in 2005 private placement) ▪ Unitranches into their strategy ▪ Approx. 10 professionals headquartered in Munich Mezzanine ▪ Mezzanine capital ▪ Convertible bonds
Selected Transactions
Acquisition Financing Senior Loan & WCF
GSE Group Acquisition by Finexx
[confidential]
December 2018
5 FCF in the Life Science Sector
Life Science Overview Advisory Services Life Science Team
Focus on Midcap and R&D Companies ✓ ✓ Integrated Management Financial Presentation FCF has traditionally served Small- and Midcap companies in the German speaking Modeling region, providing customized and innovative financing solutions, with mandates in the Pharmaceuticals sector. Arno Dr. Mathias Sebastian Colin FCF has expanded its focus on the Life Science sector, closing 4 Life Science ✓ ✓ Fuchs Schott Sommer Saß Post- CEO Director Analyst Analyst transactions in 2017: Investor Transaction Screening Support ✓ ✓ Due Diligence Investor / IB Dr. Alexandra Prof. Dr. Horst Claus Dr. Holger Support Roadshow Goll Domdey Schalper Bengs Former General Co-Founder of Co-Founder & former Founder & CEO Partner Medigene AG and CFO Pieris Pharma BCNP Consultants TVM Capital board member of ✓ ✓ BioM AG Pipeline Financing Advisory Financing Click picture to Equity & Debt FCF Life Science Research Series view the report Strategy FCF is currently advising companies FCF advises with its dedicated Life Fundraising Advisory in following indications regarding Science team on the following The FCF Life Science VC Report analyses equity and debt transactions: transaction types: the latest Venture Capital funding activities in ✓ ✓ the Life Science sector in Europe and the US. Venture Term Sheet Closing Negotiation Assistance Capital The FCF Life Science IPO Report examines recent IPO trends in the Life Science sector, Oncology Central Nervous Infectious with a strong focus on the comparison of System Diseases ✓ ✓ European and US characteristics. Life Science IPO IPO Venture Advisory Execution The FCF Life Science Monitor is the most Advisory Debt Board Support detailed analysis of European publicly listed Respiratory MedTech HealthTech companies, from the Life Science sectors. (extract from service portfolio)
6 FCF Facts & Figures
More than Close to More than More than # 1 10 100 100 4 bn Financing Advisor in Investment Banking Years of aggregated, Completed Total volume of Germany, purely Professionals investment banking / Transactions advised & closed focusing on corporate financing experience transactions since financing transactions 2005
More than More than Network 2000 25 120 Leading Access to more than Contacts to Family International Articles and research Advisor for Financing 4000 international Offices and Ultra High conferences organized papers published Transactions with financial institutions Net Worth Individuals EIB in the DACH worldwide region
7 Executive Summary FCF Overview Funding Development in 2018 Life Sciences: A closer Look C r o s s - border Investment Activity Investor Analysis Life Science Exits
8 European Life Science Venture Capital Volumes over Time
Financing volumes EURm # of Deals per year have been 250 steadily increasing EUR 3,011m 3,000 since 2000, reaching a new record high of approximately EUR 213 200 3bn in 2018. 2,500
Funding volumes of the last seven years 2,000 are above the 150 average annual deal volume of Average Annual Deal Volume (2000-2018): EUR 1,150m 1,500 EUR 1,150m (2000 – 2018) 100 The number of transactions per year 1,000 is also increasing steadily 50 500
0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
European Deal Volume European Deal Count
Source: PitchBook as of 31.12.2018, FCF Equity Research 9 Most Active European Life Science Countries in 2018
In 2018, the Life Top 5 Active Countries – by Deal Volume Top 5 Active Countries - by Deal Volume Science industry in EURm the UK recorded the highest deal volume 95 United Kingdom United Kingdom 1,226 with EUR 1,225m, 8% Deals followed by Germany 11% Germany Germany 10 357 and France with deal Deals volumes of EUR EURm 14% 52% France 17 2,339 France 319 357m and EUR 319m Deals respectively Belgium 15 Belgium 247 15% Deals Ireland The UK’s deal activity 8 Ireland 191 more than doubles Deals that of the other countries in the top 5 by deal volume Top 5 Active Countries – by Number of Deals Top 5 Active Countries – by Average Deal Volume combined EURm
3 Denmark 40.3 Deals Danish Life Science 8% United Kingdom companies received 10% Germany 10 35.7 the highest average Switzerland Deals 11% deal volumes of EUR 157 8 France Ireland 23.9 40.3m, while only Deals Deals recording 3 deals and 60% 11% 17 Belgium France 18.7 is followed by Deals Germany with an Netherlands 15 Belgium 16.4 average deal volume Deals of EUR35.7m and a deal count of 10
Source: PitchBook as of 31.12.2018, FCF Equity Research 10 Top 10 European Life Science Deals in 2018 by Volume
The 2nd round of BioNTech SE EUR 222m Artios Pharma Ltd. EUR 73m 2nd round / 2018 3rd round / 2018 BioNTech with EUR Fidelity Management & Research, Invus Group, Janus AbbVie Ventures, Andera Partners, Arix Bioscience, IP Group, Life 222m is leading the 1. Henderson Group, Redmile Group, The Struengmann 6. Sciences Partners, Merck Ventures, Novartis Venture Fund, Pfizer Family Office (5) Ventures, SV Health Investors (9) league table of the Indication: Oncology Indication: Oncology largest Life Science VC rounds in Europe in 2018 Orchard Therapeutics Ltd. EUR 127m Enterome Bioscience SA EUR 72m rd th 3 round / 2018 Dublin Copenhagen 5 round / 2018 Agent Capital, ArrowMark Partners, Baillie Gifford, Bristol-Myers Squibb, Lundbeckfond Ventures, Nestlé Health 2. Cormorant Asset Management, Cowen Group, Deerfield 1 7. Science, Omnes Capital, Principia SGR, Seventure Partners (6) 50% of the Management, Driehaus Capital Management, F-Prime Indication: Gastrointestinal Capital Partners, Foresite Capital Management, Ghost Tree Cambridge companies in the Top Capital, Medison Ventures, Perceptive Advisors, others* (17) 10 have a UK origin Indication: Rare Diseases
Freeline Therapeutics Ltd. EUR 101m Mainz Iterum Therapeutics Plc. EUR 65m nd London rd Compared to the 2 round / 2018 3 round / 2018 Syncona, University College London (2) Gosselies Advent Life Sciences, Amzak Capital Management, Arix league table for the Paris Bioscience, Bay City Capital, Canaan Partners, Domain 3. Indication: Immunology 8. Associates, Frazier Healthcare Partners, Majalin Capital, last three years Nan Fung Life Sciences, New Leaf Venture Partners, (p.22), the 2018 Sofinnova Ventures (11) Indication: Infectious Diseases league table is more diversified in the Orchard Therapeutics Ltd. EUR 96m Iteos Therapeutics SA EUR 64m nd rd companies’ origins, 2 round / 2018 3 round / 2018 4BIO Capital Partners, Agent Capital, Baillie Gifford, Cowen 6 Dimensions Capital, Curative Ventures, Federal Holding and including six different Group, F-Prime Capital Partners, Juda Capital, ORI Capital, Investment Company, Fund+, HBM Healthcare Investments, HBM 4. Pavilion Capital, RTW Investments, Temasek Holdings, UCL 9. Partners, MPM Capital, SAMBRINVEST, SFPI, Société Régionale countries Business (11) d'Investissement de Wallonie, Vives (11) Indication: Rare Diseases Indication: Oncology
Companies solely Galecto Biotech AB EUR 79m Crescendo Biologics Ltd. EUR 57m focusing on oncology 4th round / 2018 4th round / 2018 represent the largest 7-Main, GT Healthcare Capital Partners, IP Group UK, Andera Partners, EMBL Ventures, IP Group, Quan Capital, 5. Woodford Investment Management (4) 10. Sofinnova Partners, Takeda Ventures (6) group in the Top 10 Indication: Respiratory Indication: Oncology Life Science deals (40%)
Source: PitchBook as of 31.12.2018, FCF Equity Research, Biotechgate, Global Data 11 *others: RA Capital Management, RTW Investments, Sphera Funds Management, Temasek Holdings, Venrock Top 10 German Life Science Deals in 2018 by Volume
BioNTech’s 2nd BioNTech SE EUR 222m Acousia Therapeutics GmbH EUR 10m Mainz / 2nd Round Tubingen / 3rd Round financing round (EUR Fidelity Management & Research, Invus Group, Janus Boehringer Ingelheim Venture Fund, Bregua 222m) leads the Top 1. Henderson Group, Redmile Group, The Struengmann 6. Corporation, Creathor Venture, Kreditanstalt für 10 ranking of German Family Office (5) Wiederaufbau, LBBW Venture Capital (5) Indication: Oncology Indication: Hearing Disorders Life Science deals for 2018 Novaliq GmbH EUR 45m iThera Medical GmbH EUR 7m Heidelberg / 6th Round Munich / 2nd Round 60% of the Bain Capital, Cormorant Asset Management, Berlin Bayerische Beteiligungsgesellschaft, Bayern Kapital, Extorel, RA Capital Management (3) Fluxunit - OSRAM Ventures (4) companies are based 2. 7. Indication: Inflammatory Diseases Sector: Medical Technology in Southern Germany (Bavaria, Baden- Wuerttemberg) Atai Life Sciences AG EUR 25m PreOmics GmbH EUR 3m Munich / Angel Planegg / 2nd Round Mike Novogratz, Peter Thiel, Sam Englebardt (3) Jena High-Tech Gründerfonds, Think.Health (2) In contrast to the 3. Indication: Mental Health 8. Sector: Medical Technology European Top 10, the Top 10 German Life Mainz Science deals Heidelberg includes three deals Adrenomed AG EUR 24m Biametrics GmbH EUR 3m nd rd from the Medical Berlin / 2 Round Tubingen / 3 Round ExpoCapital GmbH, HBM Healthcare LBBW Venture Capital (1) Technology sector 4. Investments, Investitionsbank des Landes 9. Sector: R&D Services Brandenburg, Wellington Partners (4) Tubingen Munich Indication: Cardiovascular
OMEICOS Therapeutics GmbH EUR 17m Oncgnostics GmbH EUR 1m Berlin / 4th Round Jena / Angel Forbion, High-Tech Gründerfonds, IBB Crowdfunding 5. Beteiligungsgesellschaft, KfW Group, Remiges 10. Sector: Medical Technology Ventures, SICAR, SMS Group, The Falck Revocable Trust, VC Fonds Kreativwirtschaft Berlin (10)* Indication: Cardiovascular
Source: PitchBook as of 31.12.2018, FCF Equity Research, Biotechgate, Global Data 12 *other: Vesalius Biocapital Partners European Life Science Sector Analysis in 2018
While the Life Science Split – by Number of Deals Average Deal Volume Split biotechnology sector EURm experienced the 55 2% Pharmaceuticals 23.0 highest deal activity Deals Biotechnology in 2018, the 8% Biotechnology 82 15.3 pharmaceutical Pharmaceuticals Deals sector recorded a 39% 53 Medical Technology 6.8 marginally higher 25% 213 Medical Technology Deals deal volume and the Deals 5 largest average deal Healthcare Technology Healthcare Services 5.8 Systems Deals volume Healthcare Services 26% Healthcare Technology 18 5.5 Among top 5 most Systems Deals targeted countries by volume, the UK is the only country with Life Science Split – by Deal Volume Life Science Split across Top 5 Countries – by Deal Volume deals in all 5 sectors EURm
1% 1,226 Healthcare Services 1% 6% Pharmaceuticals 3% 13% 12% Healthcare Technology Biotechnology Systems
42% 42% EURm Medical Technology Medical Technology 3,011 357 Healthcare Technology 3% 319 Biotechnology 6% 2% 247 Systems 29% 191 42% 39% 6% 15% 84% 36% Healthcare Services 32% 1% 84% 34% 56% Pharmaceuticals 13% United Germany France Belgium Ireland Kingdom
Source: PitchBook as of 31.12.2018, FCF Equity Research 13 European Life Science Subsector Analysis in 2018 Pharmaceuticals
Among the All Subsectors – by Average Deal Volume Top 5 Countries – by Number of Deals pharmaceuticals EURm subsectors, drug 39 Drug Discovery 28.9 discovery recorded Deals United Kingdom the highest deal 12% 7 Drug Delivery 11.3 volume, average deal Deals volume and deal 12% France 6 count, and is followed Discovery Tools 8.8 42 Deals 50% Belgium in all measurements Deals 12% Other Pharmaceuticals and 3 by drug delivery and 1.9 Sweden Biotechnology Deals discovery tools 14% Switzerland The UK is the most targeted country in the European pharmaceuticals Pharmaceuticals – by Deal Volume Top 5 Countries – by Deal Volume industry by deal volume and deal <1% count Drug Discovery 4% United Kingdom 6% 11% Drug Delivery The top 5 most 12% Ireland targeted countries by EURm Discovery Tool EURm 47% Belgium deal volume received 1,264 995 14% 79% of the deal Other Pharmaceuticals and Biotechnology Sweden volume in the 90% 16% pharmaceutical France sector
Source: PitchBook as of 31.12.2018, FCF Equity Research 14 European Life Science Subsector Analysis in 2018 Biotechnology
Within the All Subsectors – by Average Deal Volume Top 5 Countries – by Number of Deals biotechnology sector, EURm therapeutics & diagnostics leads in 56 Therapeutics & Diagnostics Deals 19.6 average deal volume, 8% United Kingdom 16 R&D Services 6.8 number of deals and Deals 10% deal volume Belgium 10 Other 5.3 10% Deals 62 Germany Deals Germany is the 61% 11% second and third Netherlands most targeted country Switzerland in the biotechnology industry by deal volume and deal count respectively Biotechnology – by Deal Volume Top 5 Countries – by Deal Volume
The top 5 most targeted countries by 4% Therapeutics & deal volume received United Kingdom Diagnostics 7% 86% of the deal 9% 8% R&D Services volume in the Germany 9% EURm biotechnology sector Other EURm 48% France in 2018 1,258 1,077
Belgium 28% 87% Switzerland
Source: PitchBook as of 31.12.2018, FCF Equity Research 15 European Life Science Subsector Analysis in 2018 Medical Technology
The diagnostic All Subsectors – by Average Deal Volume Top 5 Countries – by Number of Deals equipment subsector EURm has experienced the Surgical Devices 5 11.7 most amount of deals Deals United Kingdom and deal volume of 6 8% Monitoring Equipment 11.1 the medical Deals 8% France technology sector in 8 7% Therapeutic Devices 6.3 2018 Deals 40 Germany 22 Deals Diagnostic Equipment 6.2 Deals 15% 62% Ireland The top 5 countries 11 Other Devices and Supplies 4.4 by deal volume are Deals Netherlands responsible for 90% Medical Supplies 1 1.2 Deals of the deal volume of the sector in 2018, while the top 5 countries by deal Medical Technology – by Deal Volume Top 5 Countries – by Deal Volume count account for 75% of the number of <1% deals in the sector in Diagnostic Equipment United Kingdom 13% 7% 2018 8% Monitoring Equipment France 38% 14% 9% EURm Surgical Devices EURm 48% 363 325 Ireland Therapeutic Devices 7% Italy 28% Other Devices and 19% Switzerland Supplies Medical Supplies
Source: PitchBook as of 31.12.2018, FCF Equity Research 16 European Life Science Subsector Analysis in 2018 Healthcare Technology Systems
The decision/risk All Subsectors – by Average Deal Volume Top 5 Countries – by Number of Deals analysis subsector EURm has the largest Decision/Risk Analysis 2 5.9 average deal volume Deals of EUR 5.9m while 6% United Kingdom 15 6% recording only 2 Other Healthcare Technology Systems 5.7 Deals Switzerland deals and is followed 13% by the other Medical Records Systems 1 16 Deals 0.8 Finland healthcare Deals 56% technology systems 19% Belgium subsector with a volume of EUR 5.7m Italy and 15 deals
The UK is the main deal driver Healthcare Technology Systems – by Deal Volume Top 5 Countries – by Deal Volume accounting for 9 deals and EUR 74m 1% 2% of the deal volume Other Healthcare United Kingdom Technology Systems 4% 12% 6% Decision/Risk Analysis Switzerland 12% EURm Medical Records Systems EURm 98 98 Finland
Belgium 76% 87% Sweden
Source: PitchBook as of 31.12.2018, FCF Equity Research 17 European Life Science Subsector Analysis in 2018 Healthcare Services
The surge in deal All Subsectors – by Average Deal Volume Top 5 Countries – by Number of Deals volume in the EURm healthcare services 16 Laboratory Services sector in 2018 were Deals 14.1 mainly driven by the 20% Switzerland two deals in the Other Healthcare Services 10 0.3 Deals laboratory services 40% subsector 5 United Kingdom Deals
France, Switzerland and the UK were the 40% France only countries with deals in the healthcare services sector in 2018, though Switzerland Healthcare Services – by Deal Volume Top 5 Countries – by Deal Volume experienced only insignificant volume 3% Laboratory Services France Other Healthcare Services 36% EURm EURm 29 29 United Kingdom 64%
Switzerland 97%
Source: PitchBook as of 31.12.2018, FCF Equity Research 18 Most Active Investors in European Life Science Companies in 2018
The top 10 investors invested a total of EUR 507m into the 1. EUR 71m / AUM: 1.39bn 6. EUR 45m / AUM: EUR 0.63bn Deals: Freeline Therapeutics, OMass Deals: Biosyntia, Enthera, EryDel, European life science Therapeutics 1 1 NodThera, Sitryx, Micropep industry Technologies
1 UK investors lead the table in terms of 2. EUR 63m / AUM: na 7. EUR 44m / AUM: EUR 1,690.00bn invested capital, Deals: Freeline Therapeutics, Deals: BioNTech having invested EUR MediSieve 223m into the industry and is followed by the US with EUR 145m in 3. EUR 57m / AUM: EUR 0.30bn 8. EUR 44m / AUM: EUR 6.87bn invested capital Deals: Aprea Therapeutics, BioNTech, Deals: BioNTech Evox Therapeutics
Four of the top 10 investors ranked while only participating in a 4. EUR 50m / AUM: EUR 48.00bn 9. EUR 44m / AUM: EUR na Deals: Camel-IDS, NBE Therapeutics, 1 Deals: BioNTech single deal ReViral, Syndesi Therapeutics (BioNTech’s second 3 1 VC round) 1 Struengmann Family Office
5. EUR 45m / AUM: EUR na 10. EUR 44m / AUM: na Deals: Juvenescence Deals: BioNTech
Source: PitchBook as of 31.12.2018, FCF Equity Research 19 Note: Proportional attribution of deal values to investors participating in a transaction (transaction volume / # investors by financing round) European Life Science Fund Development in 2018
Newly launched Life Top 5 European Life Science Funds Launched in 2018* Science VC funds recorded higher 1. 2. 3. 4. 5. volumes in 2018 than 2017 with the same number of launches
EUR 450m EUR 410m EUR 360m EUR 345m EUR 304m Fund volumes raised by the new Top 5 Life Winch Capital 4 Life Sciences Partners 6 Forbion IV BioDiscovery 5 Eight Roads Ventures III
Science funds in Target Sector: Commercial Target Sector: Medical Target Sector: Pharmaceuticals Target Sector: Pharmaceuticals Target Sector: Consumer Products 2018 range from Services, Healthcare Devices and Technology, Pharmaceuticals and and Biotechnology and Biotechnology and Services, Healthcare, Supplies Biotechnology Investment Size: EUR 17m – Investment Size: EUR 11m – Informational Technology EUR 304m to EUR Investment Size: EUR 32m Investment Size: EUR 15m – EUR 67m EUR 84m Investment Size: EUR 8 - 24m 450m Target Region: Europe EUR 32m Target Region: Europe, North Target Region: Europe, US Target Region: Europe, Israel, US, Target Region: Europe, US America Japan
European VC Life Science Fund Launches (L5Y)
EURm # of new funds 3,500 25
3,000 20 2,500
2,000 15 3,229 1,500 10 2,410 1,000 2,126 1,395 5 500 1,110
0 0 2014 2015 2016 2017 2018 Fund Size Number of Funds
Source: PitchBook as of 31.12.2018, FCF Equity Research 20 * Results might change with appearance of new funds not tracked by PitchBook US Life Science Fund Development in 2018
US Life Science Top 5 US Life Science Funds Launched in 2018* funds are far bigger than their European 1. 2. 3. 4. 5. counterparts
Bessemer Venture Partners’ newly EUR 1,588m EUR 1,214m EUR 564m EUR 558m EUR 545m launched fund heads the table by far with a Bessemer Venture Partners X Norwest Venture Partners XIV Foresite Capital Fund IV Bain Capital Venture Fund 2019 Vivo Opportunity Fund fund volume of EUR Target Sector: Healthcare and Target Sector: Consumer Target Sector: Pharmaceuticals Target Sector: Healthcare, Target Sector: Healthcare 1.6bn Information Technology Products and Services, Healthcare and Biotechnology Information Services Investment Size: EUR 46m Investment Size: Investment Size: Investment Size: EUR 4m – EUR Investment Size: EUR 24m – Target Region: US, China EUR 0m - EUR 86m EUR 1m – EUR 622m 343m EUR 266m Target Region: Global Target Region: US, India, Israel Target Region: US Target Region: US
US VC Life Science Fund Launches
EURm # of new funds 12,000 60
10,000 50
8,000 40
6,000 30 10,046 10,153 4,000 8,249 20 7,151 2,000 3,810 10
0 0 2014 2015 2016 2017 2018
Fund Size Number of Funds
Source: PitchBook as of 31.12.2018, FCF Equity Research 21 * Results might change with appearance of new funds not tracked by PitchBook Executive Summary FCF Overview Funding Development in 2018 Life Sciences: A closer Look C r o s s - border Investment Activity Investor Analysis Life Science Exits
22 Most Active European Life Science Countries (L5Y)
Among the top 5 Top 5 Active Countries – by Deal Volume Top 5 Active Countries – by Number of Deals active countries, the EURm # of Deals UK recorded the 2,500 140 most deals, followed 2,167 155 Deals 160 Deals 148 Deals 146 Deals 148 Deals 120 by France and 2,000 1,944 100 Switzerland 1,476 1,500 1,389 1,207 80 1,000 60 The UK also clearly 40 leads by number of 500 deals 20 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Average deal Netherlands France Germany Switzerland United Kingdom volumes are higher in United Kingdom France Switzerland Germany Ireland other countries, led by Switzerland and Top 5 Active Countries – by Average Deal Volume Germany EURm 39.9 40.3 35.7
28.2
19.2 19.9 16.5 16.4 13.9 12.7 12.9 11.8 10.6 9.9 9.3 8.1 9.3 7.2 6.2 5.1 4.1 4.1 5.5 5.3 4.8
2014 2015 2016 2017 2018
Denmark Belgium Netherlands Switzerland Germany
Source: PitchBook as of 31.12.2018, FCF Equity Research 23 Top 10 European Life Science Deals (L3Y) by Volume
The top 10 deals are Immunocore Ltd. EUR 264m Freeline Therapeutics Ltd. EUR 101m 3rd round / 2016 2nd round / 2018 close to or above AstraZeneca, Eli Lilly and Company Foundation, Fidelity Syncona, University College London (2) EUR 100m in size Investments, Genentech, GlaxoSmithKline Pharmaceuticals, 1. Malin Corporation, NeoMed Management, RTW 6. Indication: Immunology Investments, Woodford Investment Management (9) Indications: Oncology, Infectious Diseases and 60% of the Autoimmune Diseases companies in the Top BioNTech SE EUR 222m Orchard Therapeutics Ltd. EUR 96m 10 have a UK and 2nd round / 2018 2nd round / 2018 30% a Swiss origin Fidelity Management & Research, Invus Group, Janus 4BIO Capital Partners, Agent Capital, Baillie Gifford, Cowen Henderson Group, Redmile Group, The Struengmann 1 Group, F-Prime Capital Partners, Juda Capital, ORI Capital, 2. Family Office (5) 7. Pavilion Capital, RTW Investments, Temasek Holdings, UCL Business (11) Indication: Oncology The only German Indication: Rare Diseases company BioNTech Oxford ranks second with a ADC Therapeutics SA EUR 170m Cambridge ADC Therapeutics SA EUR 95m th th financing volume of 5 round / 2017 4 round / 2016 AstraZeneca, Auven Therapeutics, Redmile Group, Wild Astrazeneca, Auven Therapeutics, EG Capital Advisors, EUR 222m in their 3. Family Office (4) London 8. Wild Family Office (4) 2nd round Indication: Oncology Indication: Oncology Mainz
Companies solely Orchard Therapeutics Ltd. EUR 127m Kymab Ltd. EUR 93m focusing on oncology 3rd round / 2018 3rd round / 2016 represent the largest Agent Capital, ArrowMark Partners, Baillie Gifford, Bill & Melinda Gates Foundation, Malin Corporation, ORI Capital, 4. Cormorant Asset Management, Cowen Group, Deerfield 9. Shenzhen Hepalink Pharmaceutical, Wellcome Trust, Woodford group in the Top 10 Management, Driehaus Capital Management, F-Prime Investment Management (6) Capital Partners, Foresite Capital Management, Ghost Tree Epalinges Life Science deals Indication: Autoimmunity Capital, Medison Ventures, Perceptive Advisors, others* (17) Basel (30%) Indication: Rare Diseases
Oxford Nanopore Tech. Ltd. EUR 118m CRISPR Therapeutics AG EUR 89m 11th round / 2016 2nd round / 2016 7-Main, GT Healthcare Capital Partners, IP Group UK, Abingworth Management, Bayer, Celgene, CLI Ventures, Clough Woodford Investment Management (4) Capital Partners, Franklin Templeton Investments, New Enterprise 5. 10. Associates, New Leaf Venture Partners, Novo Holdings, SR One, Sector: Medical Technology others** (14) Indication: Immuno-oncology
Source: PitchBook as of 31.12.2018, FCF Equity Research, Biotechgate; Global Data 24 *others: RA Capital Management, RTW Investments, Sphera Funds Management, Temasek Holdings, Venrock **others: Versant Venture Management, Vertex Pharmaceuticals, Vivo Capital, Wellington Capital Management Top 10 German Life Science Deals (L3Y) by Volume
BioNTech’s 2nd BioNTech SE EUR 222m iOmx Therapeutics AG EUR 40m Mainz / 2nd Round / 2018 Munich / 1st Round / 2016 financing round (EUR Fidelity Management & Research, Invus Group, Janus Merck Ventures, MPM Capital, Sofinnova Partners, 222m) leads the Top 1. Henderson Group, Redmile Group, The Struengmann 6. Wellington Partners (4) 10 ranking of German Family Office (5) Indication: Immuno-oncology Indication: Oncology Life Science deals Rostock
Immatics Biotech. GmbH EUR 49m Immunic AG EUR 32m 60% of the Tubingen / 5th Round / 2017 Planegg-Martinsried / 1st Round / 2017 companies are based Amgen, AT Impf, dievini Hopp BioTech, Wellington Bayern Kapital, bmp, High-Tech Gründerfonds, IBG Partners (4) Beteiligungsgesellschaft Sachsen-Anhalt, Life Sciences in Southern Germany 2. 7. Indication: Oncology Partners, LifeCare Partners (6) (Bavaria, Baden- Indication: Immunology Wuerttemberg)
InflaRx GmbH EUR 47m InflaRx GmbH EUR 31m th th InflaRx ranks twice in Jena / 5 Round / 2017 Jena / 4 Round / 2016 Bain Capital, Cormorant Asset Management, Staidson Hongkong Investment (1) the Top 10 in 3. RA Capital Management (3) 8. Indication: Inflammatory Diseases th th Germany (4 and 5 Indication: Inflammatory Diseases Jena round) Mainz
Novaliq GmbH EUR 45m Heidelberg Rigontec GmbH EUR 29m In contrast to the Heidelberg / 6th Round / 2018 Munich / 1st Round / 2016 European Top 10, the Bain Capital, Cormorant Asset Management, Boehringer Ingelheim Venture Fund, Forbion Capital RA Capital Management (3) Partners, High-Tech Gründerfonds, MP Healthcare Venture Top 10 German Life 4. Tübingen 9. Indication: Inflammatory Diseases Management, NRW.Bank, Sunstone Capital, Wellington Science deals are Munich Partners (7) spread more evenly Indication: Oncology between Breath Therapeutics GmbH EUR 44m Centogene AG EUR 25m inflammatory Munich / 1st Round / 2017 Rostock / 1st Round / 2017 diseases, oncology Gilde Healthcare Partners, Gimv, Sofinnova Partners (3) Careventures, CM-CIC Investissement, DPE Deutsche 5. Indication: Respiratory Diseases 10. Private Equity, Norddeutsche Landesbank, and immuno- OstseeSparkasse Rostock, TVM Capital Life Science (6) indications Indication: Rare diseases
Source: PitchBook as of 31.12.2018, FCF Equity Research, Biotechgate, Global Data 25 Top 10 European Life Science Deals by Volume and Year
2016 2017 2018
Immunocore Ltd. EUR 264m / 3rd Round ADC Therapeutics SA EUR 170m / 5th Round BioNTech SE EUR 222m / 2nd Round 1. AstraZeneca, Eli Lilly and Company Foundation, Fidelity Investments, AstraZeneca, Auven Therapeutics, Redmile Group, Wild Family Office (4) Fidelity Management & Research, Invus Group, Janus Henderson Genentech, GlaxoSmithKline Pharmaceuticals, Malin Corporation, NeoMed Group, Redmile Group, The Struengmann Family Office (5) Management, RTW Investments, Woodford Investment Management (9) Oxford Nanopore Tech. Ltd. EUR 118m / 11th Round Cell Medica Ltd. EUR 69m / 6th Round Orchard Therapeutics Ltd. EUR 127m / 3rd Round 2. 7-Main, GT Healthcare Capital Partners, IP Group UK, Woodford Invesco Perpetual, Touchstone Innovations, VI Partners, Woord Agent Capital, ArrowMark Partners, Baillie Gifford, Cormorant Asset Investment Management (4) Investment Management (4) Management, Cowen Group, Deerfield Management, Driehaus Capital Management, F-Prime Capital Partners, others** (17) ADC Therapeutics SA EUR 95m / 4th Round Autolus Ltd. EUR 67m / 3rd Round Freeline Therapeutics Ltd. EUR 101m / 2nd Round 3. AstraZeneca, Auven Therapeutics, EG Capital Advisors, Wild Family Arix Bioscience, Cormorat Asset Management, Nextech Invest, Syncona, Syncona, University College London (2) Office (4) Woodford Investment Management (5)
Kymab Ltd. EUR 93m / 3rd Round Hookipa Biotech AG EUR 50m / 3rd Round Orchard Therapeutics Ltd. EUR 96m / 2nd Round 4. Bill & Melinda Gates Foundation, Malin Corporation, ORI Capital, BioMedPartners, Boehringer Ingelheim Venture Fund, Forbion Capital 4BIO Capital Partners, Agent Capital, Baillie Gifford, Cowen Group, F- Shenzhen Hepalink Pharmaceutical, Wellcome Trust, Woodford Investment Partners, Gilead Sciences, HBM Partners, Hillhouse Capital Group, Prime Capital Partners, Juda Capital, ORI Capital, Pavilion Capital, RTW Management (6) Sirona Capital, Sofinnova Partners, Takeda Ventures (9) Investments, Temasek Holdings, UCL Business (11) CRISPR Therapeutics AG EUR 89m / 2nd Round Immatics Biotech GmbH EUR 49m / 5th Round Galecto Biotech AB EUR 79m / 4th Round 5. Abingworth Management, Bayer, Celgene, CLI Ventures, Clough Capital Amgen, AT Impf, dievini Hopp Biotech, Wellington Partners (4) Bristol-Myers Squibb, HBM Partners, M Ventures, Maverick Ventures, Partners, Franklin Templeton Investments, New Enterprise Associates, Novo Holdings, OrbiMed, OrbiMed Israel Partners, Seventure Partners, New Leaf Venture Partners, Novo Holdings, SR One, others* (14) Sunstone Life Science Ventures, Ysios Capital (10) Carrick Therapeutics Ltd. EUR 86m / 1st Round InflaRx GmbH EUR 47m / 5th Round Artios Pharma Ltd. EUR 73m / 3rd Round 6. ARCH Venture Partners, Cambridge Enterprise, Cambridge Innovation Bain Capital, Cormorant Asset Management, RA Capital Management AbbVie Ventures, Andera Partners, Arix Bioscience, IP Group, Life Capital, Evotec, GV, Lightstone Ventures, Woodford Investment (3) Sciences Partners, Merck Ventures, Novartis Venture Fund, Pfizer Management (7) Ventures, SV Health Investors (9) Mission Therapeutics Ltd. EUR 77m / 3rd Round Bicycle Therapeutics Ltd. EUR 46m / 4th Round Enterome Bioscience SA EUR 72m / 5th Round 7. Cancer Research Technology, Pfizer Venture Investments, Roche Atlas Venture, Cambridge Innovation Capital, Longwood Fund, Novartis Bristol-Myers Squibb, Lundbeckfond Ventures, Nestlé Health Science, Venture Fund, Sofinnova Partners, SR One, Touchstone Innovations, Venture Fund, SR One, SV Health Investors, Vertex Ventures HC (7) Omnes Capital, Principia SGR, Seventure Partners (6) Woodford Investment Management (7) Autolus Ltd. EUR 77m / 2nd Round Xeltis AG EUR 45m / 3rd Round Iterum Therapeutics Plc. EUR 65m / 3rd Round 8. Arix Bioscience, Syncona, UCL Business, Woodford Investment Kurma Partners, Life Sciences Partners, VI Partners, Ysios Capital (3) Advent Life Sciences, Amzak Capital Management, Arix Bioscience, Bay Management (4) City Capital, Canaan Partners, Domain Associates, Frazier Healthcare Partners, Majalin Capital, Nan Fung Life Sciences, others*** (11) Kymab Ltd. EUR 74m / 2nd Round Breath Therapeutics GmbH EUR 44m / 1st Round Iteos Therapeutics SA EUR 64m / 3rd Round 9. Lion’s Head Global Partners, Malin Corporation, Wellcome Trust, Gilde Healthcare Partners, Gimv, Sofinnova Partners (3) 6 Dimensions Capital, Curative Ventures, Federal Holding and Woodford Investment Management (4) Investment Company, Fund+, HBM Healthcare Investments, HBM Partners, MPM Capital, SAMBRINVEST, SFPI, others**** (11) F2G Ltd. EUR 53m / 6th Round Nouscom AG EUR 42m / 2nd Round Crescendo Biologics Ltd. EUR 57m / 4th Round 10. Advent Life Sciences, Aisling Capital, Brace Pharma Capital, Merifin 5AM Ventures, Abingworth Management, Life Sciences Partners, Andera Partners, EMBL Ventures, IP Group, Quan Capital, Sofinnova Capital, Novartis Venture Fund, Novo Holdings, Sectoral Asset Versant Venture Management (4) Partners, Takeda Ventures (6) Management, Sunstone Capital (8)
Source: PitchBook as of 31.12.2018 26 *others: Versant Venture Management, Vertex Pharmaceuticals, Vivo Capital, Wellington Capital Management **others: Foresite Capital Management, Ghost Tree Capital, Medison Ventures, Perceptive Advisors, RA Capital Management, RTW Investments, Sphera Funds Management, Temasek Holdings, Venrock ***others: New Leaf Venture Partners, Sofinnova Ventures ****others: Société Régionale d'Investissement de Wallonie, Vives European Life Science Sector Analysis (L5Y)
Life Science venture Life Science Split – by Deal Volume Average Deal Volume Split rounds saw a EURm EURm “steady” rise in deal 3,500 341 3,011 Pharmaceuticals 14.6 volumes from 2014 to 3,000 Deals 2018 2,500 2,383 364 2,000 1,714 1,700 Biotechnology 9.0 1,515 Deals The pharmaceuticals 1,500 sector recorded the Healthcare Technology 77 1,000 6.4 highest deal volumes Systems Deals 500 in each year followed 282 0 Medical Technology 5.7 Deals by biotechnology and 2014 2015 2016 2017 2018 medical technology 31 Healthcare Technology Systems Healthcare Services Healthcare Services 2.2 Biotechnology Medical Technology Deals The biotechnology Pharmaceuticals sector was the most active with 364 deals, however, with a Life Science Split – by Deal Volume Life Science Split – by Number of Deals significantly lower average deal volume 1% 82 77 78 than in the Pharmaceuticals 74 68 69 68 68 pharmaceuticals 4% 65 66 66 15% 55 sector Biotechnology 51 53 47
EURm 47% Medical Technology 21 10,322 18 14 14 11 10 Healthcare Technology 7 5 3 5 33% Systems Healthcare Services 2014 2015 2016 2017 2018
Biotechnology Medical Technology Healthcare Services Healthcare Technology Systems Pharmaceuticals
Source: PitchBook as of 31.12.2018, FCF Equity Research 27 European Life Science Subsector Analysis (L5Y) Pharmaceuticals
The pharmaceuticals Pharmaceuticals Split – Over Time All Subsectors – by Average Deal Volume sector saw an EURm EURm increase in deal 1,500 272 1,419 Drug Discovery 16.5 volume from 2014 to 1,264 Deals 1,200 2016, followed by a Other Pharmaceuticals and 22 859 13.3 decline in 2017 and a 900 727 Biotechnology Deals 592 subsequent increase 600 28 Drug Delivery 5.7 in 2018 Deals 300
18 0 Discovery Tools 3.5 Deals Among the 2014 2015 2016 2017 2018 pharmaceuticals Drug Discovery Other Pharmaceuticals and Biotechnology 1 Cultivation <0.1 subsectors, drug Drug Delivery Discovery Tools Deals discovery recorded Cultivation by far the highest aggregated deal volume, average deal Pharmaceuticals – by Deal Volume Pharmaceuticals Split – by Number of Deals volume and deal 62 58 count <1% 57 56 Drug Discovery 3%2% 7% 39 Other Pharmaceuticals and Biotechnology EURm Drug Delivery 4,861
6 7 6 6 7 6 Discovery Tools 4 5 5 4 2 3 3 3 0 1 1 0 0 0 88% Cultivation 2014 2015 2016 2017 2018 Drug Discovery Drug Delivery Other Pharmaceuticals and Biotechnology Discovery Tools Cultivation
Source: PitchBook as of 31.12.2018, FCF Equity Research 28 European Life Science Subsector Analysis (L5Y) Biotechnology
After a drop in deal Biotechnology Split – Over Time All Subsectors – by Average Deal Volume volume in 2015, the EURm EURm Biotechnology sector 1,400 253 1,257 Therapeutics & Diagnostics 11.4 saw an steady 1,200 Deals increase in deal 1,000 82 R&D Services 4.4 volume until 2018 800 703 Deals 600 523 502 29 Other 2.4 366 Deals Activity was primarily 400 driven by the 200 0 therapeutics & 2014 2015 2016 2017 2018 diagnostics subsector in terms of number of Therapeutics & Diagnostics R&D Services Other deals and deal volume
Biotechnology Split – by Deal Volume Biotechnology Split – by Number of Deals Far higher average 59 deal volumes are 56 2% 49 recorded in the 47 Therapeutics & therapeutics & 42 11% Diagnostics diagnostics sector R&D Services than in R&D services 22 and other EURm Other 17 16 16 biotechnology areas 3,351 11 10 8 5 4 2
87% 2014 2015 2016 2017 2018 Therapeutics & Diagnostics R&D Services Other
Source: PitchBook as of 31.12.2018, FCF Equity Research 29 European Life Science Subsector Analysis (L5Y) Medical Technology
The overall medical Medical Technology Split – Over Time All Subsectors – by Average Deal Volume technology sector EURm EURm has found itself in 400 360 363 Surgical Devices 23 11.5 decline from 2014 350 344 Deals 282 until 2017, followed 300 245 40 Therapeutic Devices 7.4 by an increase in 250 Deals 200 34 deal volume in 2018 Monitoring Equipment 4.9 150 Deals 100 129 Most deals were Diagnostic Equipment 4.6 50 Deals recorded by far in the 0 40 diagnostic equipment 2014 2015 2016 2017 2018 Other Devices and Supplies Deals 4.0 subsector, however, Diagnostic Equipment Medical Supplies Monitoring Equipment Medical Supplies 16 3.6 with a relatively low Other Devices and Supplies Surgical Devices Therapeutic Devices Deals average deal volume
Over the last 5 years, diagnostic equipment Medical Technology – by Deal Volume Medical Technology – by Number of Deals has received the 29 most funding 28 25 25 Diagnostic Equipment 22 Financing rounds of 3% 10% surgical devices Therapeutic Devices feature the highest 10% 37% 11 11 10 average deal volume EURm Surgical Devices 9 9 9 9 8 8 8 7 7 1,594 6 6 5 5 5 4 4 3 7% Monitoring Equipment 2 2 2 2 1
21% Other Devices and 2014 2015 2016 2017 2018 Supplies Diagnostic Equipment Other Devices and Supplies Therapeutic Devices Medical Supplies Monitoring Equipment Medical Supplies Surgical Devices
Source: PitchBook as of 31.12.2018, FCF Equity Research 30 European Life Science Subsector Analysis (L5Y) Healthcare Technology Systems
After a significant rise Healthcare Technology Systems Split – Over Time All Subsectors – by Average Deal Volume from 2014 to 2016, EURm EURm deal volumes 150 145 11 Medical Records Systems 21.1 plummeted from EUR 125 120 Deals 145m in 2016 to EUR 98 100 44 21m in 2017, but Other Healthcare Technology Systems 3.0 75 68 Deals subsequently rose to 50 16 EUR 98m in 2018 Decision/Risk Analysis 2.5 21 Deals 25 4 0 Outcome Management 0.5 The medical records 2014 2015 2016 2017 2018 Deals systems subsector Medical Records Systems Other Healthcare Technology Systems 2 Enterprise Systems 0.1 features by far the Decision/Risk Analysis Outcome Management Deals largest total deal and Enterprise Systems average deal volume
Healthcare Technology Systems – by Deal Volume Healthcare Technology Systems Split – by Number of Deals Most deals were recorded in other <1% 15 healthcare Medical Records Systems technology systems, 8%1% 11 however, with a Other Healthcare relatively low average Technology Systems 7 6 6 deal volume EURm Decision/Risk Analysis 5 5 32% 453 3 3 59% 2 2 2 2 Outcome Management 1 1 1 1 1 1 1 1 0 0 0 0
Enterprise Systems 2014 2015 2016 2017 2018
Other Healthcare Technology Systems Decision/Risk Analysis Medical Records Systems Outcome Management Enterprise Systems
Source: PitchBook as of 31.12.2018, FCF Equity Research 31 European Life Science Subsector Analysis (L5Y) Healthcare Services
In general, healthcare Healthcare Services Split – Over Time All Subsectors – by Average Deal Volume services is a relative EURm EURm small sector 30 29 18 Laboratory Services 4.3 compared to the Deals other Life Science 20 10 Other Healthcare Services 0.5 sectors in terms of Deals 14 deal numbers as well 9 3 10 8 Clinics/Outpatient Services 0.2 as average deal Deals volume 3 0 2014 2015 2016 2017 2018 The highest deal Other Healthcare Services Laboratory Services Clinics/Outpatient Services volume was recorded Hospitals/Inpatient Services Distributors in 2018, all other years showing little volumes, despite constant deal activity Healthcare Services – by Deal Volume Healthcare Services Split – by Number of Deals
2%
Laboratory Services 5 5 7% 4 Other Healthcare Services 3 3 3
EURm Clinic/Outpatient Services 2 2 2 64 1 1
0 0 0 0 0 0 0 0 0 0 0 0 0 0
91% 2014 2015 2016 2017 2018
Laboratory Services Other Healthcare Services Clinics/Outpatient Services Hospitals/Inpatient Services Distributors
Source: PitchBook as of 31.12.2018, FCF Equity Research 32 Average European Deal Size and Duration (L5Y)
The pharmaceuticals EURm subsector exhibits Round Size larger average deal Life Science 5.3 12.7 16.2 12.8 17.4 volumes in every 1 2 3 4 financing round than Round Number 5 the Biotechnology sector
3
The duration between Pharmaceuticals 7.0 16.4 27.7 16.5 30.0 the financing rounds 341 deals 1 -365 0 365 7302 1095 1460 1825 4 2190 2555 2920 3285 is the highest for the 5 medical technology Biotechnology 5.8 15.8 10.2 15.7 15.5 1 subsector with 615 364 deals 2 3 4 5 days on average, followed by Medical Technology 4.4 5.7 7.3 9.2 7.5 1 pharmaceuticals with 282 deals 2 3 4 5 592 days and Healthcare biotechnology 561 1.3 3.6 Technology Systems 1 2 days on average 77 deals
Healthcare Services 1.8 5.0 1 31 deals 2
Days into corporate-365 life 0 365 730 1,095 1,460 1,825 2,190 2,555 2,920 3,285 after 1st financing round
Source: PitchBook as of 31.12.2018, FCF Equity Research 33 Note: No sufficient data for the subsectors Healthcare Services and Healthcare Technology Systems, rounds that might affect the full financing cycle (round 1 to 5) but are older than 5 years are not taken into consideration Executive Summary FCF Overview Funding Development in 2018 Life Sciences: A closer Look C r o s s - border Investment Activity Investor Analysis Life Science Exits
34 Domestic and Cross-border Investments into Europe (L5Y)
Since 2015 cross- Domestic vs. Cross-border Investments Domestic vs. Cross-border Investments – by Funding Round border (foreign / non- EURm # of deals EURm # of deals domestic) investors 2,500 160 1,800 59% 200 exceed domestic 140 1,600 180 European investors in 2,000 37% 1,400 160 120 41% 61% terms of total annual 1,200 140 1,500 46% 100 120 1,000 56% deal volumes 80 39% 100 35% 45% 44% 800 74% 1,000 50% 60 68% 80 63% 600 60 40 The proportion of 54% 400 26% 32% 40 500 65% 55% cross-border 50% 20 200 20 investors 0 0 0 0 2014 2015 2016 2017 2018 VC-1 VC-2 VC-3 VC-4 VC-5 continuously increases in later stage VC rounds Cross-border Volume Domestic Volume Deals with Cross-border Participation Deals without Cross-border Participation Average Domestic and Cross-border Investment Deal Volumes Over the last 5 years, EURm 15.1 cross-border deals 14.3 feature higher 12.5 average deal 11.6 10.2 volumes than their 8.4 8.2 7.7 domestic peers with 6.6 less deal activity 4.1
2014 2015 2016 2017 2018
Average Cross-border Volume Average Domestic Volume
Source: PitchBook as of 31.12.2018, FCF Equity Research 35 Note: Proportional attribution of deal values to investors participating in a transaction Origin of Cross-border Investors
The US dominates by 2014 2015 2016 2017 2018 far the cross-border investor league table 1. EUR 299m EUR 610m EUR 458m EUR 391m EUR 803m in each year in terms Ø EUR 3.7m Ø EUR 8.1m Ø EUR 6.5m Ø EUR 5.8m Ø EUR 6.9m of deal volumes
2. EUR 57m EUR 69m EUR 119m EUR 75m EUR 113m Ø EUR 2.6m Ø EUR 6.9m Ø EUR 59.7m Ø EUR 6.9m Ø EUR 5.6m
3. EUR 40m EUR 41m EUR 74m EUR 73m EUR 87m Ø EUR 4.0m Ø EUR 4.5m Ø EUR 9.3m Ø EUR 4.3m Ø EUR 8.7m
4. EUR 39m EUR 35m EUR 67m EUR 73m EUR 65m Ø EUR 19.5m Ø EUR 3.5m Ø EUR 13.5m Ø EUR 9.1m Ø EUR 4.0m
5. EUR 32m EUR 32m EUR 40m EUR 63m EUR 63m Ø EUR 4.5m Ø EUR 2.6m Ø EUR 4.5m Ø EUR 6.3m Ø EUR 9.0m
6. EUR 28m EUR 27m EUR 37m EUR 33m EUR 62m Ø EUR 3.5m Ø EUR 5.5m Ø EUR 12.3m Ø EUR 5.5m Ø EUR 7.8m
7. EUR 27m EUR 25m EUR 37m EUR 20m EUR 59m Ø EUR 2.7m Ø EUR 2.8m Ø EUR 7.3m Ø EUR 9.9m Ø EUR 5.9m
8. EUR 24m EUR 17m EUR 35m EUR 17m EUR 58m Ø EUR 8.0m Ø EUR 1.7m Ø EUR 3.1m Ø EUR 8.3m Ø EUR 7.2m
9. EUR 22m EUR 12m EUR 34m EUR 16m EUR 49m Ø EUR 11.1m Ø EUR 3.1m Ø EUR 4.3m Ø EUR 4.0m Ø EUR 3.8m
10. EUR 21m EUR 8m EUR 32m EUR 15m EUR 28m Ø EUR 5.3m Ø EUR 3.8m Ø EUR 6.3m Ø EUR 2.9m Ø EUR 5.7m
Source: PitchBook as of 31.12.2018, FCF Equity Research 36 Note: Proportional attribution of deal volumes to investors participating in a transaction European Life Science Deal Volume Matrix (L5Y)
Within Europe, the Investor Country Global Share of UK features by far Overall Share of Cross- Cross- Others Funding Domestic the highest cross- United Switzerla Netherlan border border Volume Funding border in- and Kingdom France Germany Belgium nd ds Sweden Denmark Ireland Spain Inflows Inflow United outflows in terms of 1,786 60 23 12 105 60 4 68 75 1 1,229 1,636 3,421 48% 52% Kingdom deal volume, 9 446 5 16 39 6 5 24 3 8 161 277 723 38% 62% however, in terms of France its share of cross- 58 43 337 27 52 38 20 310 549 886 62% 38% Germany border outflows, the 6 14 9 235 18 11 6 8 2 103 179 414 43% 57% UK features the BelgiumDomicile lowest with 15% only 152 46 51 23 215 68 39 11 574 964 1,180 82% 18% Switzerland 8 4 5 11 6 115 12 2 413 459 574 80% 20% Netherlands
Swiss companies Company 16 1 114 9 158 184 298 62% 38% received the largest Sweden relative share of 13 26 22 20 93 8 68 156 249 63% 37%
cross-border Denmark Investee 51 15 1 37 9 1 83 276 390 473 82% 18% investments (82%) Ireland 9 8 9 0 73 27 53 126 42% 58% Spain Comparing cross- Others 1 25 36 4 12 6 39 1 3 0 border investment Global Cross- flows, the share of 315 228 145 101 299 217 54 181 84 30 border Outflow German companies Overall which have received Funding 2,101 674 482 336 514 331 169 274 167 103 foreign investments, Volume ranks in the lower Share of Crossborder 15% 34% 30% 30% 58% 65% 32% 66% 50% 29% half Outflow Domestic Investment Share of Domestic 85% 66% 70% 70% 42% 35% 68% 34% 50% 71% Foreign Investment Funding
Source: PitchBook as of 31.12.2018, FCF Equity Research, EURm 37 Note: Proportional attribution of deal values to investors participating in a transaction Executive Summary FCF Overview Funding Development in 2018 Life Sciences: A closer Look C r o s s - border Investment Activity Investor Analysis Life Science Exits
38 Most Active Investors in European Life Science Companies (L3Y)
Over the last 3 years, 2016 2017 2018 the share of US investors in the Top 1. EUR 148m EUR 43m EUR 71m 10 most active investors in Europe increased from one to 2. EUR 90m EUR 43m EUR 63m three
3. EUR 63m EUR 43m EUR 57m The league table shows a very diversified 4. EUR 53m EUR 43m EUR 50m composition of investors in each year – few double 5. EUR 42m Wild Family Office EUR 43m EUR 45m mentions only*
6. EUR 38m EUR 41m EUR45m
7. EUR 34m EUR 34m EUR 44m
8. EUR 33m EUR 34m EUR 44m
9. EUR 33m EUR 31m EUR 44m
10. Staidson Hong Kong EUR 31m EUR 31m Struengmann Family Office EUR 44m
Source: PitchBook as of 31.12.2018, FCF Equity Research 39 Note: Proportional attribution of deal values to investors participating in a transaction (transaction volume / # investors by financing round) *including AstraZeneca, Fidelity, Redmile Group, Sofinnova Partners, UCLB and Woodford Investment Management Top 10 European Investor Hubs by Capital (L5Y) European Investors Invested in European Life Science Companies
The United Kingdom London Basel hosts with London, Oxford and 1. EUR 1,153m / AUM: EUR 504.7bn Invested capital in European Life 6. EUR 191m / AUM: EUR 1.7bn Cambridge the most Top 3 Investors: Janus Henderson Science companies: Top 3 Investors: Novartis Venture Group, Capital Dynamics, Lansdowne Fund, Roche Venture Fund, BioMed and biggest VC hubs Partners EUR 3.2bn Partners in Europe Paris Dublin The biggest German 2. EUR 492m / AUM: EUR 615.4bn 7. EUR 149m / AUM: EUR 2.7bn VC hub is Munich, Top 3 Investors: BNP Paribas Asset Top 3 Investors: Enterprise Ireland, with EUR 92m Management, IdInvest Partners, Atlantic Bridge Capital, ACT Venture Stockholm invested capital in Omnes Capital Capital European Life Science companies, Oxford Dublin Zug not even ranking in Hellerup 3. EUR 336m / AUM: EUR 21.8bn Cambridge 8. EUR 144m / AUM: EUR 1.1bn the Top 10 Top 3 Investors: Woodford Investment Top 3 Investors: HBM Partners, - Management, Oxford Technology, Oxford Oxford Sciences Innovation Amsterdam London Cambridge Stockholm
4. EUR 246m / AUM: EUR 3.9bn EUR 136m / AUM: EUR 182.2bn Paris 9. Top 3 Investors: Cambridge Enterprise, Basel Top 3 Investors: Skandinaviska Cambridge Innovation Capital, IQ Enskilda Banken, HealthCap, Capital Partners Stockholms Affärsänglar
Amsterdam Hellerup
5. EUR 199m / AUM: EUR 28.8bn 10. EUR 135m / AUM: EUR 47.6bn Top 3 Investors: PPF Group, Life Top 3 Investors: Novo Holdings, Sciences Partners, Merck Ventures Vækstfonden, - Invested Capital in European Life Science
Source: PitchBook as of 31.12.2018, FCF Equity Research 40 Note: Proportional attribution of deal values to investors participating in a transaction (transaction volume / # investors by financing round) Top 10 US Investor Hubs by Capital (L5Y) US Investors Invested in European Life Science Companies
West Coast East Coast New York Invested capital in European Life Invested capital in European Life Los Angeles Science companies: Science companies: 1. EUR 429m / AUM: EUR 192.9bn 6. EUR 76m / AUM: n/a Top 3 Investors: Jennison EUR 796m EUR 1,021m Top 3 Investors: Thomas Associates, OrbiMed, Deerfield McInerney, Angel Investors, Management American Funds Insurance Series Seattle Boston Cambridge San Francisco San Mateo New York City 2. EUR 371m / AUM: EUR 6.8bn 7. EUR 74m / AUM: EUR 636.1bn Top 3 Investors: Versant Venture San Francisco Top 3 Investors: Franklin Management, Foresite Capital Templeton Investments, InClin Management, 5AM Ventures San Mateo Investments, - New Brunswick Palo Alto Menlo Park Boston Seattle Los Angeles 3. EUR 358m / AUM: EUR 2,604.1bn* 8. EUR 73m / AUM: EUR 3.3bn Top 3 Investors: Fidelity Top 3 Investors: Frazier Investments, Wellington Healthcare Partners, Maveron, Management, Bain Capital Bill & Melinda Gates Foundation
Cambridge New Brunswick
4. EUR 163m / AUM: EUR 8.1bn 9. EUR 71m / AUM: n/a Top 3 Investors: Clarus Ventures, Top 3 Investors: Johnson & MPM Capital, F-Prime Capital Johnson Innovation – JJDC, - Partners
Menlo Park Palo Alto
5. EUR 131m / AUM: EUR 25.7bn 10. EUR 71m / AUM: EUR 9.0bn Top 3 Investors: Sequoia Capital, Top 3 Investors: EW Healthcare Bessemer Venture Partners, Partners, Venrock, Vivo Capital Canaan Partners Invested Capital in European Life Science
Source: PitchBook as of 31.12.2018, FCF Equity Research 41 Note: Proportional attribution of deal values to investors participating in a transaction transaction (transaction volume / # investors by financing round) * Significantly influenced by Fidelity Investments (AUM: EUR 1,690bn) Executive Summary FCF Overview Funding Development in 2018 Life Sciences: A closer Look C r o s s - border Investment Activity Investor Analysis Life Science Exits
42 Top 10 VC-Backed European Life Science IPOs (L3Y) by IPO Volume
The IPO of Orchard Therapeutics with an Issuing Volume Issuing Volume issuing volume of 2018 EUR 172m 2017 1. Age at IPO: 3 years 6. EUR 85m EUR 172m was the 7 Age at IPO: 10 years Indication: Rare Diseases largest European IPO Indication: Inflammatory Diseases during the last 3 years
Issuing Volume Issuing Volume 2018 2016 2. EUR 131m 7. EUR 82m 7 out of the Top 10 Age at IPO: 22 years Age at IPO: 3 years IPOs of VC-backed Indication: Respiratory Indication: Oncology European Life Science companies went public at the NASDAQ in the US 2018 Issuing Volume 2017 Issuing Volume 3. Age at IPO: 4 years EUR 128m 8. Age at IPO: 13 years EUR 81m Indication: Oncology Indication: Orphan Diseases The IPO of the 1 German company InflaRx ranks on 6th 1 place Issuing Volume Issuing Volume 2017 2017 EUR 112m EUR 73m 4. Age at IPO: 12 years 9. Age at IPO: 14 years The UK dominates Indication: Oncology 1 Indication: Neurology the ranking of VC- backed European Life Science IPOs with a proportion of Issuing Volume 2017 2017 Issuing Volume EUR 90m 40% of the Top 10 5. Age at IPO: 5 years 10. Age at IPO: 4 years EUR 72m Indication: Genitourinary Indication: Ophthalmology
Source: PitchBook as of 31.12.2018, FCF Equity Research, Biotechgate, Global Data, S&P Capital IQ 43 Top 10 VC-Backed European Life Science Exits (L3Y)1) by Deal Volume
The takeover of EURm EURm Acerta Pharma with a 3,604 686 purchase price of 1. acquired by: 6. acquired by: Deal Year: 2016 Deal Year: 2018 EUR 3,604m was by Found. Year: 2012 Found. Year: 2012 far the largest during Indication: Oncology Indication: Oncology the last 3 years
The takeover of the EURm EUR m 1,282 558 German company 2. acquired by: 7. acquired by: Ganymed Deal Year: 2016 Deal Year: 2017 Found. Year: 2001 Found. Year: 2001 Pharmaceuticals Indication: Oncology Sector: Services ranks 2nd among the Top 10 VC-Backed European Life EURm Stockholm EUR m 942 Sandwich Science exits 520 3. acquired by: 8. acquired by: Deal Year: 2017 Deal Year: 2018 Most acquirers have Found. Year: 2012 Found. Year: 2000 Indication: Dermatology a Japanese origin Indication: Musculoskeletal (40%)! Copenhagen
EURm EURm Leuven 905 470 Oss Sandwich 4. acquired by: Deal Year: 2018 9. acquired by: Found. Year: 2012 Deal Year: 2016 Indication: Central Nervous Gosselies Found. Year: 2010 System Mainz Indication: Oncology
Munich
EURm EURm 800 468 acquired by: 5. acquired by: 10. Deal Year: 2017 Deal Year: 2017 Found. Year: 2012 Found. Year: 2014 Indication: Inflammatory Indication: Oncology
Source: PitchBook as of 31.12.2018, Biotechgate, Global Data, FCF Equity Research 44 1) Includes cash and stock considerations, milestone payments and other considerations Top 3 VC-Backed European Life Science Exits (L10Y)1) by Subsector
Significantly larger Biotechnology Medical Technology Healthcare Services exits were recorded EURm EURm EURm in pharmaceuticals 1,282 302 58 1. acquired by: 1. acquired by: 1. acquired by: and biotechnology Deal Year: 2016 Found. Year: 2001 Deal Year: 2017 Deal Year: 2015 than in all other Life Indication: Oncology Found. Year: 2001 Found. Year: 2011 Science subsectors EURm EURm EURm 942 245 29 2. acquired by: 2. acquired by: 2. acquired by: Deal Year: 2017 The largest exit over Found. Year: 2012 Deal Year: 2010 Deal Year: 2011 the last 10 years in Indication: Dermatology Found. Year: 2001 Found. Year: 2005 the Life Science EURm EURm EURm industry was the 905 240 21 acquired by: 3. acquired by: 3. acquired by: 3. acquisition of Acerta Deal Year: 2018 Deal Year: 2010 Found. Year: 2012 Deal Year: 2014 Found. Year: 1997 Pharma by Indication: Central Found. Year: 1994 AstraZeneca with a Nervous System purchase price of EUR 3,604m Pharmaceuticals Healthcare Technology Systems
EURm EURm 3,604 60 acquired by: 1. acquired by: 1. Deal Year: 2016 Found. Year: 2012 Deal Year: 2015 Indication: Oncology Found. Year: 2008
EURm EURm 10 1,380 acquired by: 2. acquired by: 2. Deal Year: 2015 Found. Year: 2012 Deal Year: 2014 Indication: Cardiovascular Found. Year: 2012
EURm No further deal 800 3. acquired by: 3. Deal Year: 2017 Found. Year: 2012 Indication: Inflammatory
Source: PitchBook as of 31.12.2018, Biotechgate, Global Data, FCF Equity Research 45 1) Includes cash and stock considerations, milestone payments and other considerations Contact Details & Disclaimer
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46 THE FINANCING SPECIALIST