FCF Life Science Research 2nd Life Science Venture Capital Report – Financing Trends in Europe and the US Fungi Penicillium
Part of FCF Life Science Research Series FCF Overview Recent Funding Development Life Sciences: A closer Look C r o s s - border Investment Activity Investor Analysis Life Science Exits
2 FCF Overview
FCF seeks to provide Who We Are Capital Markets Capabilities and Services its clients with ▪ Specialized investment bank and financing specialist financing Private / Venture capital financing Private equity financing ▪ Advising public and private small / midcap companies Pre-IPO Growth capital financing (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 (ii) with the highest Public Dual-track (IPO and Public Equity (PIPE) flexibility, financing instruments (no product selling approach), allowing alternative transaction Block trade for customized financing structures (iii) in the shortest Receivables financing / Working capital / Revolving – All investors: Close and trusted relationships with senior period of time, Short-term Factoring / 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 financing Letter of Credit closing proba- access to institutional debt and equity investors enable fast Bank loan facility / Promissory note bility, and with transactions Straight debt (Schuldscheindarlehen)
Debt Long-term Sale-and-lease back High-yield / PIK bond (v) financing partners ▪ More than 100 transactions with a total placement volume in Debt Corporate bonds (public / (public / private) that integrate well excess of EUR 4.0 billion since foundation in 2005 private placement) Second lien financing into their strategy ▪ Approx. 10 professionals with offices in Munich Mezzanine Mezzanine capital Convertible bonds
Selected Transactions
3 FCF Facts & Figures
More than More than 100 2000 # 1 10 Network Completed Contacts to Family Financing Advisor in Investment Banking Access to more than Transactions Offices and Ultra Germany, purely Professionals 4000 international High Net Worth focusing on corporate financial institutions Individuals financing transactions worldwide
More than Close to More than More than 4 bn Leading 100 120 25 Total volume of Advisor for Years of aggregated, Articles and International advised & closed Financing investment banking / research papers conferences transactions since Transactions with financing experience published organized 2005 EIB in the DACH region
4 FCF’s Equity Expertise
FCF has successfully Life Science Financing Research IPO / Public Equity Markets Coverage closed numerous equity-related transactions over the past years
FCF regularly publishes specialized research, covering industry trends, equity valuations, debt transactions, IPO and M&A activity
FCF has hosted / hosts the FCF IPO FCF IPO Conference Presenters FCF Family-2-Family Conference Presenters Conference, addressing going public topics with great relevance to decision makers
FCF bi-annually hosts its Family-2- Family Conference, an opportunity for public companies to present themselves to family offices
5 FCF Overview Recent Funding Development Life Sciences: A closer Look C r o s s - border Investment Activity Investor Analysis Life Science Exits
6 European Life Science Venture Capital Volumes over Time
After a record high in EURm # of Deals 2016, funding 3,000 400 volumes experienced a significant decrease in 2017, however, still 350 recorded the 2nd 2,500 highest annual volume of all times 300
2,000 Funding volumes of 250 the last six years find Average Annual Deal themselves above Volume (2000-2017): EUR 1,126m the average annual deal volume of 1,500 200 EUR 1,126m (2000 – 2017) 150 1,000 The annual number of European venture 100 rounds in the Life Science sector has 500 been steadily 50 increasing since the year 2000, despite a setback in 2016 and 0 0 2017 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
European Deal Volume European Deal Count
Source: PitchBook as of 09.02.2018, FCF Equity Research 7 Most Developed European Life Science Countries (L5Y)
Among the Top 5 Top 5 Targeted Countries – by Deal Volume Top 5 Targeted Countries – by Number of Deals targeted countries, EURm # of Deals the Life Science 2,500 140 industry in the UK 164 Deals 194 Deals 211Deals 187 Deals 180 Deals 2,054 120 recorded the most 2,000 1,648 100 deals and received 1,477 1,500 by far the largest 1,260 80 financing volumes 1,000 922 60 over the last five 40 500 years, followed by 20 Switzerland and 0 0 Germany 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
France Netherlands Germany Switzerland United Kingdom United Kingdom France Switzerland Germany Ireland German and Swiss Life Science companies tend to Top 5 Targeted Countries – by Average Deal Volume receive the highest EURm average deal 21.1 volumes 15.6 15.4 12.7 13.2 11.7 10.6 10.7 8.2 8.0 8.4 7.7 7.8 6.9 6.2 5.4 5.7 5.1 5.0 3.9 4.1 4.7 2.0 2.6 2.4
2013 2014 2015 2016 2017
Ireland Germany Switzerland France United Kingdom
Source: PitchBook as of 09.02.2018, FCF Equity Research 8 Top 10 European Life Science Deals (L3Y) by Volume
The 2nd round of Acerta Pharma B.V. EUR 336m Orchard Therapeutics Ltd EUR 96m 2nd round / 2015 3rd round / 2017 Dutch Acerta Pharma American Funds Insurance Series, Franklin Templeton 4BIO Capital Partners, Agent Capital, Baillie Gifford, Cowen with EUR 336m is Investments, Janus Capital Group, T. Rowe Price, Group, F-Prime Capital Partners, Juda Capital, ORI Capital, 1. Variable Annuity Life Insurance Company (5) 6. Pavilion Capital, RTW Investments, Temasek Holdings, UCL Business (11) leading the league Indication: Oncology table of the largest Indication: Rare diseases Life Science VC rounds in Europe Immunocore Ltd. EUR 264m ADC Therapeutics SA EUR 95m 3rd round / 2016 4th round / 2016 over the last 3 years AstraZeneca, Eli Lilly and Company Foundation, Fidelity Astrazeneca, Auven Therapeutics, EG Capital Advisors, Investments, Genentech, GlaxoSmithKline Pharmaceuticals, Wild Family Office (4) 2. Malin Corporation, NeoMed Management, RTW 7. Investments, Woodford Investment Management (9) Indication: Oncology 50% of the Indications: Oncology, infectious diseases and companies in the Top autoimmune diseases 10 have a UK and ADC Therapeutics SA EUR 170m 5 Cambridge Kymab Ltd. EUR 93m 30% a Swiss origin 5th round / 2017 Oxford 3rd round / 2016 AstraZeneca, Auven Therapeutics, Redmile Group, 1 Bill & Melinda Gates Foundation, Malin Corporation, ORI Capital, 3. Wild Family Office (4) 8. Shenzhen Hepalink Pharmaceutical, Wellcome Trust, Woodford London Oss Investment Management (6) The German(-origin) Indication: Oncology Indication: Autoimmunity JenaValve 1 Technology’s 4th round of EUR 90m Oxford Nanopore Tech. Ltd. EUR 118m JenaValve Technology, Inc. EUR 90m th th ranks on 9th place 11 round / 2016 4 round / 2015 7-Main, GT Healthcare Capital Partners, IP Group UK, Atlas Ventures, Edmond de Rothschild Investment Partners, Woodford Investment Management (4) Munich Gimv, Legend Capital, NeoMed Management, Omega Fund 4. 9. Management, Rudi Marien, Sunstone Capital, Valiance, VI Sector: Medical Technology Basel Companies solely Partners (10) Sector: Medical Technology focusing on oncology Epalinges 3 represent the majority Oxford Nanopore Tech. Ltd. EUR 98m CRISPR Therapeutics AG EUR 89m in the Top 10 Life 10th round / 2015 2nd round / 2015 Science deals (40%) Undisclosed Abingworth Management, Bayer, Celgene, CLI Ventures, Clough Capital Partners, Franklin Templeton Investments, New Enterprise 5. Sector: Medical Technology 10. Associates, New Leaf Venture Partners, Novo Holdings, SR One, others* (14) Indication: Immuno-oncology
Source: PitchBook as of 09.02.2018, FCF Equity Research, Biotechgate 9 *others: Versant Venture Management, Vertex Pharmaceuticals, Vivo Capital, Wellington Capital Management Top 10 German Life Science Deals (L3Y) by Volume
JenaValve JenaValve Technology, Inc. EUR 90m Immunic AG EUR 32m Munich / 4th Round / 2015 Planegg-Martinsried / 1st Round / 2017 Technology’s 4th Atlas Ventures, Edmond de Rothschild Investment RMM, Atlas Venture, Edmond de Rothschild, Gimv, NeoMed, financing round (EUR 1. Partners, Gimv, Legend Capital, NeoMed Management, 6. VI Partners, Valiance (8) Omega Fund Management, Rudi Marien, Sunstone Indication: Immunology 90m) leads the Top Capital, Valiance, VI Partners (10) 10 ranking of German Sector: Medical Technology Life Science deals Rostock 1 over the last 3 years Immatics Biotech. GmbH EUR 49m InflaRx GmbH EUR 31m Tübingen / 5th Round / 2017 Jena / 4th Round / 2016 Amgen, AT Impf, dievini Hopp BioTech, Staidson Hongkong Investment (1) Wellington Partners (4) 70% of the 2. 7. Indication: Inflammatory diseases Indication: Oncology companies are based in Southern Germany (Bavaria, Baden- InflaRx GmbH EUR 47m Rigontec GmbH EUR 29m Wuerttemberg) Jena / 5th Round / 2017 Munich / 1st Round / 2016 Bain Capital, Cormorant Asset Management, 2 Boehringer Ingelheim Venture Fund, Forbion Capital 3. RA Capital Management (3) 8. Partners, High-Tech Gründerfonds, MP Healthcare Venture Indication: Inflammatory diseases Jena Management, NRW.Bank, Sunstone Capital, Wellington InflaRx ranks with Partners (7) two financing rounds Indication: Oncology (4th and 5th round) in the Top 10 in Breath Therapeutics GmbH EUR 44m Centogene AG EUR 25m st st Germany Munich / 1 Round / 2017 5 Rostock / 1 Round / 2016 Gilde Healthcare Partners, Gimv, Sofinnova Partners (3) 2 Careventures, CM-CIC Investissement, DPE Deutsche 4. Indication: Respiratory diseases Tübingen 9. Private Equity, Norddeutsche Landesbank, Munich OstseeSparkasse Rostock, TVM Capital Life Science (6) In contrast to the Indication: Rare diseases European Top 10, the Top 10 German Life iOmx Therapeutics AG EUR 40m Allecra Therapeutics GmbH EUR 22m Science deals focus Munich / 1st Round / 2016 Weil am Rhein / 2nd Round / 2016 on different Merck Ventures, MPM Capital, Sofinnova Partners, Delos Capital, Edmond de Rothschild Investment Wellington Partners (4) indications 5. 10. Partners, EMBL Ventures, Forbion Capital Partners (4) Indication: Immuno-oncology Indication: Infectious and diseases
Source: PitchBook as of 09.02.2017, FCF Equity Research 10 Top 10 European Life Science Deals by Volume and Year
2015 2016 2017
Acerta Pharma B.V. EUR 336m / 2nd Round Immunocore Ltd. EUR 264m / 3rd Round ADC Therapeutics SA EUR 170m / 5th Round 1. Ridgeback, Rock Springs, F-Prime, Merlin Nexus, New Enterprise AstraZeneca, Eli Lilly and Company Foundation, Fidelity Investments, AstraZeneca, Auven Therapeutics, Redmile Group, Wild Family Office (4) Associates, Novo, OrbiMed, Wellington, VenBio, Foresite, Uni Oxford, Genentech, GlaxoSmithKline Pharmaceuticals, Malin Corporation, NeoMed QVT Financial (12) Management, RTW Investments, Woodford Investment Management (9)
Oxford Nanopore Tech. Ltd. EUR 98m / 10th Round Oxford Nanopore Tech. Ltd. EUR 118m / 11th Round Orchard Therapeutics Ltd. EUR 96m / 3rd Round 2. Undisclosed 7-Main, GT Healthcare Capital Partners, IP Group UK, Woodford 4BIO Capital Partners, Agent Capital, Baillie Gifford, Cowen Group, F- Investment Management (4) Prime Capital Partners, Juda Capital, ORI Capital, Pavilion Capital, RTW Investments, Temasek Holdings, UCL Business (11)
JenaValve Technoloy, Inc. EUR 89m / 4th Round ADC Therapeutics SA EUR 95m / 4th Round Cell Medica Ltd. EUR 69m / 6th Round 3. Atlas Ventures, Edmond de Rothschild Investment Partners, Gimv, Legend AstraZeneca, Auven Therapeutics, EG Capital Advisors, Invesco Perpetual, Touchstone Innovations, VI Partners, Woord Capital, NeoMed Management, Omega Fund Management, Rudi Marien, Wild Family Office (4) Investment Management (4) Sunstone Capital, Valiance, VI Partners (10)
ADC Therapeutics SA EUR 71m / 3rd Round Kymab Ltd. EUR 93m / 3rd Round Autolus Ltd. EUR 67m / 3rd Round 4. AstraZeneca, Auven Therapeutics, ET Capital, Wild Family Office (4) Bill & Melinda Gates Foundation, Malin Corporation, ORI Capital, Arix Bioscience, Cormorat Asset Management, Nextech Invest, Syncona, Shenzhen Hepalink Pharmaceutical, Wellcome Trust, Woodford Investment Woodford Investment Management (5) Management (6)
DNA Electronics, Inc. EUR 58m / 2nd Round CRISPR Therapeutics AG EUR 89m / 2nd Round Iterum Therapeutics Ltd. EUR 65m / 3rd Round 5. Undisclosed Abingworth Management, Bayer, Celgene, CLI Ventures, Clough Capital Advent Life Sciences, Arix Bioscience, Bay City Capital, Canaan Partners, Franklin Templeton Investments, New Enterprise Associates, Partners, Domain Associates, Frazier Healthcare Partners, New Leaf New Leaf Venture Partners, Novo Holdings, SR One, others** (14) Venture Partners, Pivotal bioVenture Partners, Sofinnova Ventures (9)
CRISPR Therapeutics AG EUR 56m / 1st Round Carrick Therapeutics Ltd. EUR 86m / 1st Round Hookipa Biotech AG EUR 50m / 3rd Round 6. Abingworth Management, Celgene, New Enterprise Associates, SR One, ARCH Venture Partners, Cambridge Enterprise, Cambridge Innovation BioMedPartners, Boehringer Ingelheim Venture Fund, Forbion Capital Versant Venture Management (5) Capital, Evotec, GV, Lightstone Ventures, Woodford Investment Partners, Gilead Sciences, HBM Partners, Hillhouse Capital Group, Management (7) Sirona Capital, Sofinnova Partners, Takeda Ventures (9) ObsEva SA EUR 55m / 3rd Round Mission Therapeutics Ltd. EUR 77m / 3rd Round Immatics Biotech GmbH EUR 49m / 5th Round 7. HBM Healthcare Investments, HBM Partners, Intel Capital, Merck Ventures, Cancer Research Technology, Pfizer Venture Investments, Roche Amgen, AT Impf, dievini Hopp Biotech, Wellington Partners (4) New Enterprise Associates, Novo Holdings, OrbiMed, Rock Springs Venture Fund, Sofinnova Partners, SR One, Touchstone Innovations, Capital,Sofinnova Partners, Sofinnova Ventures (10) Woodford Investment Management (7)
Merus BV EUR 42m / 3rd Round Autolus Ltd. EUR 77m / 2nd Round InflaRx GmbH EUR 47m / 5th Round 8. Aglaia Biomedical Ventures, Bay Citi Capital, Johnson & Johnson Arix Bioscience, Syncona, UCL Business, Bain Capital, Cormorant Asset Management, Innovation – JJDC, Life Sciences Partners, others* (11) Woodford Investment Management (4) RA Capital Management (3)
Autolus Ltd. EUR 39m / 1st Round Kymab Ltd. EUR 74m / 2nd Round Bicycle Therapeutics Ltd. EUR 46m / 4th Round 9. Syncona (1) Lion’s Head Global Partners, Malin Corporation, Wellcome Trust, Atlas Venture, Cambridge Innovation Capital, Longwood Fund, Novartis Woodford Investment Management (4) Venture Fund, SR One, SV Health Investors, Vertex Ventures HC (7)
PsiOxus Therapeutics Ltd. EUR 35m / 5th Round F2G Ltd. EUR 53m / 6th Round Breath Therapeutics GmbH EUR 44m / 1st Round 10. Invesco Perpetual, Lundbeckfond Ventures, Mercia Technologies, SR One, Advent Life Sciences, Aisling Capital, Brace Pharma Capital, Merifin Gilde Healthcare Partners, Gimv, Sofinnova Partners (3) Touchstone Innovations, Woodford Investment Management (6) Capital, Novartis Venture Fund, Novo Holdings, Sectoral Asset Management, Sunstone Capital (8)
Source: PitchBook as of 09.02.2018 11 *others: Novartis Venture Fund, Novo Holdings, Pfizer Venture Investments, RA Capital Management, Rock Springs Capital, Sofinnova Ventures, Tekla Capital Management **others: Versant Venture Management, Vertex Pharmaceuticals, Vivo Capital, Wellington Capital Management FCF Overview Recent Funding Development Life Sciences: A closer Look C r o s s - border Investment Activity Investor Analysis Life Science Exits
12 Life Science Sector Analysis (L5Y)
Life Science venture Life Science Split – by Deal Volume Average Deal Volume Split rounds saw a EURm EURm continuing rise in deal 3,000 2,570 469 Pharmaceuticals 9.6 volumes from 2013 to 2,500 Deals 2016, however, 1,830 1,971 2,000 475 recorded a slight 1,490 1,583 Biotechnology 6.3 1,500 Deals decrease in 2017 1,000 382 Medical Technology Deals 4.0 Within the Life 500 Science sector, the 0 94 Healthcare Technology Systems 3.9 pharmaceuticals 2013 2014 2015 2016 2017 Deals sector recorded the Healthcare Technology Systems Healthcare Services 42 Healthcare Services 2.0 highest deal volumes Biotechnology Medical Technology Deals and average deal Pharmaceuticals volumes in each year from 2013 to 2017, Life Science Split – by Deal Volume Life Science Split – by Number of Deals followed by biotechnology and 114 medical technology 1% 103 102 94 96 96 91 89 92 Pharmaceuticals 85 86 88 4% The biotechnology 72 16% Biotechnology sector was the most 60 58 active with 475 deals, EURm Medical Technology however, with a 48% 32 9,444 significantly lower 14 16 16 17 15 Healthcare Technology 8 8 average deal volume 6 4 31% Systems than in the Healthcare Services 2013 2014 2015 2016 2017 pharmaceuticals Biotechnology Medical Technology sector Healthcare Services Healthcare Technology Systems Pharmaceuticals
Source: PitchBook as of 09.02.2018, FCF Equity Research 13 Life Science Subsector Analysis (L5Y) Pharmaceuticals
The pharmaceuticals Pharmaceuticals Split – Over Time All Subsectors – by Average Deal Volume sector saw increasing EURm EURm deal volumes from 1,500 Other Pharmaceuticals and 33 1,479 11.7 2013 to 2016, Biotechnology Deals 1,200 followed by a decline 901 936 377 Drug Discovery 10.4 of EUR 543m in 2017 900 Deals 618 600 575 37 Drug Delivery 4.4 Drug discovery 300 Deals recorded by far the 20 0 Discovery Tools 1.7 highest aggregated 2013 2014 2015 2016 2017 Deals deal volumes and Drug Discovery Other Pharmaceuticals and Biotechnology 20 Cultivation 0.3 deal count within the Drug Delivery Discovery Tools Deals pharmaceuticals Cultivation subsectors
Pharmaceuticals – by Deal Volume Pharmaceuticals Split – by Number of Deals The second largest 79 subsector ‘other 75 74 75 74 1% pharmaceuticals and Cultivation biotechnology’, 8% 4% however, exhibits the Discovery Tools highest average deal volume EURm Drug Delivery 3,891 10 Drug Discovery 8 9 7 9 9 6 6 6 4 6 4 2 0 2 1 1 2 0 0
87% Other Pharmaceuticals 2013 2014 2015 2016 2017 and Biotechnology Drug Discovery Drug Delivery Other Pharmaceuticals and Biotechnology Discovery Tools Cultivation
Source: PitchBook as of 09.02.2018, FCF Equity Research 14 Life Science Subsector Analysis (L5Y) Biotechnology
The biotechnology Biotechnology Split – Over Time All Subsectors – by Average Deal Volume sector featured a EURm EURm decreasing tendency 800 745 326 Therapeutics & Diagnostics 7.7 until 2015, but was 700 636 620 Deals able to recover again 600 527 117 500 R&D Services 3.9 408 Deals 400 300 32 Activity was primarily Other 2.3 Deals driven by the 200 therapeutics & 100 0 diagnostics sector in 2013 2014 2015 2016 2017 terms of number of deals and deal Therapeutics & Diagnostics R&D Services Other volume
Far higher average Biotechnology Split – by Deal Volume Biotechnology Split – by Number of Deals deal volumes are recorded in the 79 1% 70 therapeutics & 65 60 diagnostics sector Therapeutics & Diagnostics 52 than in R&D services 16% R&D Services and other 28 biotechnology areas EURm 25 Other 22 2,936 21 21 14 6 6 2 4 83% 2013 2014 2015 2016 2017 Therapeutics & Diagnostics R&D Services Other
Source: PitchBook as of 09.02.2018, FCF Equity Research 15 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 finds itself in decline 400 388 361 Surgical Devices 29 7.8 since 2013, mainly 350 307 Deals 300 driven by the massive 48 257 Therapeutic Devices 6.6 fall in therapeutic 250 224 Deals 200 53 devices and surgical 3.6 150 Other Devices and Supplies Deals devices deal volume 100 181 50 Diagnostic Equipment Deals 3.1 Most deals were 0 2013 2014 2015 2016 2017 31 recorded by far in the Medical Supplies Deals 2.8 diagnostic equipment Diagnostic Equipment Medical Supplies Monitoring Equipment Monitoring Equipment 40 2.6 subsector, however, Other Devices and Supplies Surgical Devices Therapeutic Devices Deals with a relatively low average deal volume
Over the last 5 years, Medical Technology – by Deal Volume Medical Technology – by Number of Deals diagnostic equipment 47 has received the 41 most funding Diagnostic Equipment 36 34 23% Financing rounds of Medical Supplies surgical devices 36% 23 EURm 16 feature the highest Monitoring Equipment 14 12 13 12 1,537 10 10 11 10 average deal volume 8 8 8 8 6 7 7 7 6 6 7 17% Other Devices and 4 4 3 Supplies 2 2 5% 7% 12% Surgical Devices 2013 2014 2015 2016 2017 Diagnostic Equipment Other Devices and Supplies Therapeutic Devices Therapeutic Devices Monitoring Equipment Medical Supplies Surgical Devices
Source: PitchBook as of 09.02.2018, FCF Equity Research 16 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 2013 to 2016, EURm EURm deal volumes 150 149 11 124 Medical Records Systems 20.3 plummeted from EUR 125 Deals 149m in 2016 to EUR 100 54 30m in 2017 Other Healthcare Technology Systems 1.6 75 69 Deals
50 18 Decision/Risk Analysis 1.4 30 Deals The medical records 25 systems subsector 9 7 0 Outcome Management 0.9 features by far the 2013 2014 2015 2016 2017 Deals largest deal and Medical Records Systems Other Healthcare Technology Systems 4 Enterprise Systems 0.1 average deal volume Decision/Risk Analysis Outcome Management Deals Enterprise Systems
Most deals were recorded in other Healthcare Technology Systems – by Deal Volume Healthcare Technology Systems Split – by Number of Deals healthcare 19 technology systems, however, with a 1% Decision/Risk Analysis relatively low average 8% deal volume 21% 11 Enterprise Systems 9 8 7 EURm Medical Records Systems 6 6 381 4 3 3 3 Other Healthcare 2 2 2 2 1 1 1 1 1 1 1 Technology Systems 70% Outcome Management 2013 2014 2015 2016 2017
Other Healthcare Technology Systems Decision/Risk Analysis Medical Records Systems Outcome Management Enterprise Systems
Source: PitchBook as of 09.02.2018, FCF Equity Research 17 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 subsector 50 46 16 Other Healthcare Services 2.0 compared to the Deals 40 other Life Science 19 30 Laboratory Services 1.7 subsectors in terms Deals of deal numbers as 20 15 5 well as average deal 9 Clinics/Outpatient Services 0.2 10 8 Deals volume 4 1 0 Hospitals/Inpatient Services 0.1 2013 2014 2015 2016 2017 Deal The highest deal Other Healthcare Services Laboratory Services Clinics/Outpatient Services 1 Distributors 0.042 volume was recorded Deal Hospitals/Inpatient Services Distributors in 2013, all other years show little volumes, despite a constant deal activity Healthcare Services – by Deal Volume Healthcare Services Split – by Number of Deals (except for 2017) 1%1%
Other Healthcare 7 Services
Laboratory Services 5 5 5 4 40% EURm Clinics/Outpatient 3 3 82 Services 2 2 2 58% Hospitals/Inpatient 1 1 1 1 Services
Distributors 2013 2014 2015 2016 2017
Laboratory Services Other Healthcare Services Clinics/Outpatient Services Hospitals/Inpatient Services Distributors
Source: PitchBook as of 09.02.2018, FCF Equity Research 18 Average European Deal Size and Duration (L5Y)
The pharmaceuticals EURm sector exhibits larger average deal Round Size volumes in every Life Science 4.8 10.0 13.0 11.0 15.5 14.1 12.1 29.2 1 2 3 4 5 6 7 financing round than Round Number 8 the Biotechnology sector (except for 8th round)
The duration between Pharmaceuticals 6.5 13.4 21.6 12.4 25.0 26.3 13.1 4.8 1 2 8 the financing rounds 290 companies -365 0 365 730 1095 3 1460 18254 2190 5 2555 29206 3285 36507 4015 4380 4745 is the highest for the 1.9 Biotechnology 5.1 11.7 9.2 10.9 14.0 7.9 49.1 pharmaceuticals 7 1 2 3 4 6 289 companies 5 sector with 671 days 8 on average, followed by biotechnology with Medical Technology 3.5 4.6 5.2 9.9 7.5 9.6 20.1 1 2 3 4 5 6 581 days 241 companies 7 Healthcare 1.1 3.2 Technology Systems Medical technology 59 companies financing rounds 0.5 feature predominantly Healthcare Services 5.1 shorter time windows 28 companies between later financing rounds than Days into corporate-365 life 0 365 730 1095 1460 1825 2190 2555 2920 3285 3650 4015 4380 4745 all other sectors after 1st financing round
Source: PitchBook as of 09.02.2018, FCF Equity Research 19 Note: No sufficient data for the subsectors Healthcare Services and Healthcare Technology Systems, rounds that might affect the full financing cycle (round 1 to 8) but are older than 5 years are not taken into consideration FCF Overview Recent Funding Development Life Sciences: A closer Look C r o s s - border Investment Activity Investor Analysis Life Science Exits
20 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 1,400 58% 250 exceed domestic 140 1,200 investors in terms of 2,000 200 120 62% 1,000 61% 42% total annual deal 45% 1,500 100 150 volumes 42% 800 35% 80 39% 38% 70% 600 1,000 51% 60 100 56% 60% The proportion of 400 55% 40 30% 40% 500 65% 58% 50 cross-border 200 44% 49% 20 investors 0 0 0 0 continuously 2013 2014 2015 2016 2017 VC-1 VC-2 VC-3 VC-4 VC-5 increased in later stage VC rounds Cross-border Volume Domestic Volume Deals with Cross-border Participation Deals with Domestic Participation Average Domestic and Cross-border Investment Deal Volumes Over the last 5 years, EURm cross-border investors feature 9.5 9.7 higher average deal 8.2 volumes than their 6.9 7.1 7.1 6.3 6.2 domestic peers with 5.7 less deal activity 3.3
2013 2014 2015 2016 2017 Average Cross-border Volume Average Domestic Volume
Source: PitchBook as of 09.02.2018, FCF Equity Research 21 Note: Proportional attribution of deal values to investors participating in a transaction Origin of Cross-border Investors
The US dominates by 2013 2014 2015 2016 2017 far the cross-border investor league table 1. EUR 270m EUR 299m EUR 636m EUR 495m EUR 491m in each year from Ø EUR 3.7m Ø EUR 3.8m Ø EUR 8.0m Ø EUR 6.4m Ø EUR 5.7m 2013 to 2017 in terms of deal volumes 2. EUR 42m EUR 57m EUR 72m EUR 119m EUR 90m Ø EUR 3.0m Ø EUR 2.6m Ø EUR 6.0m Ø EUR 59.7m Ø EUR 8.2m
The second most 3. EUR 42m EUR 40m EUR 54m EUR 78m EUR 80m active cross-border Ø EUR 2.8m Ø EUR 4.0m Ø EUR 1.5m Ø EUR 8.7m Ø EUR 4.2m investors have a UK origin 4. EUR 42m EUR 39m EUR 41m EUR 67m EUR 75m Ø EUR 2.4m Ø EUR 19.5m Ø EUR 4.1m Ø EUR 13.5m Ø EUR 6.9m
5. EUR 37m EUR 32m EUR 35m EUR 57m EUR 64m Ø EUR 3.4m Ø EUR 4.5m Ø EUR 3.1m Ø EUR 1.1m Ø EUR 5.9m
6. EUR 28m EUR 28m EUR 32m EUR 49m EUR 53m Ø EUR 2.5m Ø EUR 3.5m Ø EUR 2.6m Ø EUR 3.7m Ø EUR 3.0m
7. EUR 18m EUR 27m EUR 25m EUR 49m EUR 20m Ø EUR 2.6m Ø EUR 2.7m Ø EUR 2.8m Ø EUR 4.9m Ø EUR 9.9m
8. EUR 16m EUR 24m EUR 18m EUR 41m EUR 19m Ø EUR 2.2m Ø EUR 8.0m Ø EUR 1.5m Ø EUR 4.1m Ø EUR 3.8m
9. EUR 6m EUR 22m EUR 12m EUR 37m EUR 18m Ø EUR 6.4m Ø EUR 11.1m Ø EUR 3.1m Ø EUR 12.3m Ø EUR 8.8m
10. EUR 6m EUR 21m EUR 8m EUR 37m EUR 17m Ø EUR 2.0m Ø EUR 5.3m Ø EUR 3.8m Ø EUR 7.3m Ø EUR 1.7m
Source: PitchBook as of 09.02.2018, FCF Equity Research 22 Note: Proportional attribution of deal volumes to investors participating in a transaction European Life Science Deal Volume Matrix (L5Y)
Within Europe, the Investor Origin UK features by far Global Share of Cross- Overall Cross- Share of the highest cross- Others border Funding border Domestic border in- and Inflows Volume Inflow Funding outflows in terms of 1,673 41 28 85 49 44 75 1 931 1,235 2,926 43% 57% deal volume, however, in terms of 9 395 7 27 13 6 5 3 8 11 36 126 521 24% 76% its share of cross- 15 47 380 48 21 42 181 354 734 48% 52% border outflows, the
UK features the 163 63 43 192 33 70 5 11 585 973 1,165 84% 16% Domicile lowest with 16% only 21 16 4 187 12 1 81 136 323 42% 58%
5 0 13 12 154 8 6 427 495 650 76% 24% Swiss companies 24 received the largest Company 16 1 9 124 59 85 209 41% 59% relative share of cross-border 53 4 19 19 4 9 80 2 214 323 403 80% 20% investments (84%) Investee 6 4 0 68 19 28 97 29% 71%
Comparing cross- 7 0 3 0 64 5 16 80 20% 80% border investment Others 1 15 36 17 1 13 43 0 0 0 flows, the share of Global Cross- German companies 310 196 138 217 140 195 49 82 29 20 border Outflows which have received Overall Funding 1,983 591 518 409 327 350 174 162 97 84 foreign investments, Volume ranks in the lower Share of Cross- 16% 33% 27% 53% 43% 56% 28% 51% 30% 24% third border Outflow Domestic Investment Share of Domestic 84% 67% 73% 47% 57% 44% 72% 49% 70% 76% Foreign Investment Funding
Source: PitchBook as of 09.02.2018, FCF Equity Research, EURm 23 Note: Proportional attribution of deal values to investors participating in a transaction FCF Overview Recent Funding Development Life Sciences: A closer Look C r o s s - border Investment Activity Investor Analysis Life Science Exits
24 Most Active Investors in European Life Science Companies (L3Y)
Over the last 3 years, 2015 2016 2017 the share of US investors decreased 1. EUR 67m EUR 148m EUR 43m in the Top 10 most active investors in Europe 2. EUR 67m EUR 90m EUR 43m
Besides Astra 3. EUR 67m EUR 63m EUR 43m Zeneca, Syncona and Horizon 2020* (double mentioning), 4. EUR 67m EUR 53m EUR 43m the league table shows a very diversified 5. EUR 67m EUR 50m Wild Family Office EUR 43m composition of investors in each year 6. EUR 55m EUR 42m EUR 42m
7. EUR 29m EUR 38m EUR 42m
8. EUR 28m EUR 38m EUR 41m
9. * EUR 28m EUR 37m EUR 34m
* 10. EUR 22m EUR 36m EUR 31m
Source: PitchBook as of 09.02.2018, FCF Equity Research 25 Note: Proportional attribution of deal values to investors participating in a transaction (transaction volume / # investors by financing round) * Horizon 2020, the framework program of the European Commission, funds research, technological development and innovation Top 10 European Investor Hubs by Capital (L5Y) European Investors Invested in European Life Science Companies
The United Kingdom London Hellerup hosts with London, Oxford and 1. EUR 1,046m / AUM: EUR 503.1bn Invested capital in European Life 6. EUR 179m / AUM: EUR 47.6bn Cambridge the most Top 3 Investors: Janus Henderson Science companies: Top 3 Investors: Novo Holdings, Group, Capital Dynamics, Lansdowne Vækstfonden, - and biggest VC hubs Partners EUR 5.1bn in Europe Paris Basel The biggest German 2. EUR 427m / AUM: EUR 608.3bn 7. EUR 170m / AUM: EUR 1.7bn VC hub is Munich, Top 3 Investors: BNP Paribas Asset Top 3 Investors: Novartis Venture with EUR 119m Management, IdInvest Partners, Fund, Roche Venture Fund, Stockholm Omnes Capital BioMedPartners invested capital in 1 European Life Science companies, Cambridge 1 1 Brussels ranks not even in the Dublin 3 Hellerup 3. EUR 412m / AUM: EUR 3.5bn Cambridge 8. EUR 165m / AUM: EUR 1.6bn Top 10 Top 3 Investors: Cambridge Enterprise, Top 3 Investors: Cambridge Innovation Capital, IQ Oxford ParticipatieMaatschappij Vlaanderen, Capital Partners Amsterdam European Commission, BNP Paribas London 1 Fortis Private Equity Brussels Oxford 1 Stockholm
4. EUR 306m / AUM: EUR 21.8bn EUR 147m / AUM: EUR 181.2bn Paris 9. Top 3 Investors: Woodford Investment Basel Top 3 Investors: Skandinaviska Management, Oxford Technology, Enskilda Banken, HealthCap, - Oxford Sciences Innovation 1 1
Amsterdam Dublin
5. EUR 188m / AUM: EUR 28.7bn 10. EUR 145m / AUM: EUR 2.7bn Top 3 Investors: PPF Group, Life Top 3 Investors: Enterprise Ireland, Sciences Partners, Merck Ventures Atlantic Bridge Caiptal, ACT Venture Invested Capital in European Life Science Capital
Source: PitchBook as of 09.02.2018, FCF Equity Research 26 Note: 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 San Francisco Invested capital in European Life Invested capital in European Life New Brunswick Science companies: Science companies: 1. EUR 277m / AUM: EUR 6.6bn 6. EUR 74m / AUM: undisclosed Top 3 Investors: Versant Venture EUR 627m EUR 652m Top 3 Investors: Johnson & Management, Foresite Capital 1 Johnson Innovation – JJDC, - Management, 5AM Ventures Seattle
Boston San Mateo
2. EUR 254m / AUM: EUR 2,604.1bn* 1 7. EUR 74m / AUM: EUR 636.1bn Top 3 Investors: Fidelity 1 Boston Top 3 Investors: Franklin Investments, Wellington Chicago New Brunswick Templeton Investments New York City Management, Bain Capital San Francisco 1 1 Chevy Chase San Mateo Menlo Park 1 New York Los Angeles 4 3. EUR 238m / AUM: EUR 21.3bn 8. EUR 68m / AUM: undisclosed Top 3 Investors: OrbiMed, Invus Top 3 Investors: Thomas Group, QVT Financial Los Angeles McInerney, Angel Investors, American Funds Insurance Series
Menlo Park Chicago
4. EUR 112m / AUM: EUR 24.6bn 9. EUR 46m / AUM: EUR 2.4bn Top 3 Investors: Sequoia Capital, Top 3 Investors: ARCH Venture Bessemer Venture Partners, Partners, Sandbox Industries, Canaan Partners Cultivian Sandbox Ventures
Seattle Chevy Chase
5. EUR 96m / AUM: EUR 3.3bn 10. EUR 40m / AUM: EUR 9.8bn Top 3 Investors: Frazier Top 3 Investors: New Enterprise Healthcare Partners, Maveron, Associates, - Bill & Melinda Gates Foundation Invested Capital in European Life Science
Source: PitchBook as of 09.02.2018, FCF Equity Research 27 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 1,790bn) European Life Science Fund Development
Compared with the Top 5 European Life Science Funds Launched in 2017* record year 2016, newly launched Life 1. 2. 3. 4. 5. Science funds collected EUR 1.1bn in 2017, down from EUR 3.6bn EUR 280m EUR 267m EUR 182m EUR 101m EUR 85m
Fund volumes raised LSP Health Economics Fund 2 Medicxi Growth I DFJ Esprit IV Seroba Life Sciences Fund III Rewired Fund by the new Top 5 Life Target Sector: Target Sector: Target Sector: Target Sector: Target Sector: Science funds in Medical Technology and Biotechnology Biotechnology, Healthcare Biotechnology Biotechnology 2017 ranges from Biotechnology Investment Size: Services, Information Investment Size: EUR 40m Investment Size: > EUR 0.5m Investment Size: EUR 10m - EUR 30m Technology, Software Target Region: Europe Target Region: Europe EUR 91m to EUR EUR 27m - EUR 36m Target Region: Europe Investment Size: 280m Target Region: Europe & US EUR 10m - EUR 63m Target Region: Europe European VC Life Science Fund Launches (L5Y)
EURm # of new funds 4,000 25 3,500 20 3,000
2,500 15 2,000 3,605 1,500 10 1,000 1,863 5 500 978 847 1,108 0 0 2013 2014 2015 2016 2017 Fund Size Number of Funds
Source: PitchBook as of 09.02.2018, FCF Equity Research 28 * Results might change with appearance of new funds not tracked by PitchBook US Life Science Fund Development
US Life Science Top 5 US Life Science Funds Launched in 2017* funds are far bigger than their European 1. 2. 3. 4. 5. counterparts
The aggregated size of newly launched EUR 2,941m EUR 790m EUR 695m EUR 561m EUR 424m Life Science funds in the US showed a New Enterprise Associates 16 Clarus IV Canaan XI Oak HC/FT Partners II Venrock Associates VIII massive growth with Target Sector: Target Sector: Target Sector: Target Sector: Target Sector: a CAGR of 28.6% Pharmaceuticals and Pharmaceuticals and Healthcare Technology Life Sciences All Life Science Sectors from 2013 to 2017 Biotechnology Biotechnology Systems Investment Size: Investment Size: Investment Size: Investment Size: Investment Size: EUR 9m – EUR 53m EUR 5m – EUR 53m EUR 2m - EUR 120m EUR 20m - EUR 100m EUR 1m - EUR 4m Target Region: US Target Region: US (one Target Region: North America Target Region: US Target Region: US and investment in Europe) The New Enterprise Europe Associates’ 16th fund US VC Life Science Fund Launches leads the table by far EURm # of new funds with a fund volume of 12,000 50 EUR 2,941m 45 10,000 40 35 8,000 30 6,000 25 11,146 20 4,000 8,500 6,916 15 10 2,000 3,793 3,222 5 0 0 2013 2014 2015 2016 2017
Fund Size Number of Funds
Source: PitchBook as of 09.02.2018, FCF Equity Research 29 * Results might change with appearance of new funds not tracked by PitchBook FCF Overview Recent Funding Development Life Sciences: A closer Look C r o s s - border Investment Activity Investor Analysis Life Science Exits
30 Top 10 VC-Backed European Life Science IPOs (L3Y) by IPO Volume
The IPO of Adaptimmune with an Issuing Volume Issuing Volume 2015 2017 issuing volume of EUR 191m EUR 100m 1. Age at IPO: 7 years 6. EUR 191m was the 7 Age at IPO: 10 years Indication: Oncology Indication: Inflammatory diseases largest European IPO during the last 3 years
Issuing Volume Issuing Volume 2017 2017 EUR 165m EUR 97m 7 out of the Top 10 2. Age at IPO: 15 years 7. Age at IPO: 5 years IPOs of VC-backed Indication: Oncology Indication: Genitourinary European Life Science companies went public at the NASDAQ in the US 2015 Issuing Volume 2017 Issuing Volume 3. Euronext Brussels EUR 109m 8. Age at IPO: 13 years EUR 95m Age at IPO: 8 years Indication: Orphan diseases The IPO of the Sector: Medical Technology 2 German company InflaRx ranks on 6th place Issuing Volume Issuing Volume 2015 2017 EUR 108m 1 EUR 87m 4. Age at IPO: 8 years 9. Age at IPO: 14 years The UK dominates Indication: Rare diseases Indication: Neurology the ranking of VC- backed European Life Science IPOs with a proportion of 2017 Issuing Volume 2015 Issuing Volume one third of the Top 5. Age at IPO: 12 years EUR 100m 10. Age at IPO: 13 years EUR 75m 10 Indication: Oncology Indication: Oncology
Source: PitchBook as of 09.02.2018, FCF Equity Research, Biotechgate, S&P Capital IQ as of 27.02.2018 31 Top 10 VC-Backed European Life Science Exits (L3Y)1) by Deal Volume
The takeover of EURm EURm Acerta Pharma with a 3,604 715 purchase price of 1. acquired by: 6. acquired by: Deal Year: 2016 Deal Year: 2016 EUR 3,604m was by Found. Year: 2012 Found. Year: 2007 far the largest during Indication: Oncology Indication: Oncology the last 3 years
The takeover of the EURm EURm 1,380 579 German company 2. acquired by: 7. acquired by: Ganymed Deal Year: 2015 Deal Year: 2015 Found. Year: 2012 Found. Year: 2010 Pharmaceuticals Indication: Cardiovascular Copenhagen Indication: Neurology ranks 3rd among the Cambridge Top 10 VC-Backed Naarden European Life EURm EUR m 1,282 Sandwich Oss 558 Science exits 3. acquired by: 8. acquired by: Deal Year: 2016 Gosselies Deal Year: 2017 The Netherlands Found. Year: 2001 Found. Year: 2001 Indication: Oncology dominate the ranking Sector: Services Mainz with the two largest exits in the last 3 EURm EURm years (Acerta 942 Munich 470 4. acquired by: 9. acquired by: Pharma and Dezima Deal Year: 2017 Deal Year: 2015 Pharma) Found. Year: 2012 Found. Year: 1999 Indication: Dermatology Indication: Musculoskeletal Most acquirers have a Japanese origin EURm Marseille EURm (40%)! 800 464 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 09.02.2018, Biotechgate, FCF Equity Research 32 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 715 240 21 acquired by: 3. acquired by: 3. acquired by: 3. acquisition of Acerta Deal Year: 2016 Deal Year: 2010 Found. Year: 2007 Deal Year: 2014 Found. Year: 1997 Pharma by Indication: Oncology Found. Year: 1994 AstraZeneca with a 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 09.02.2018, Biotechgate, FCF Equity Research 33 1) Includes cash and stock considerations, milestone payments and other considerations Contact Details & Disclaimer
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34 THE FINANCING SPECIALIST