Transnational Venture Financing

1
Transnational Venture Financing

• Jason Rushton

Athens 14th June 2005
Merlin Biosciences Limited 33 King Street St.
James London, SW1Y 6RJ Tel [phone]
2
Raising Finance-The Local View

• Organic growth supported by profits and local
  finance is
• possible
• Some local markets have many high quality VC
• providers e.g. UK, Germany, Nordic
• Soft loans and grants can be accessed
• Local success stories exist

Indianapolis 1876
3
Why Transnational Finance is Important ?

• Board diversification
• Capital magnitude
• Building financial and operational skill set
• Internationalise the company
• Enhanced investor profile-quality follows quality
• Funds cautious in certain countries
• Active investors better than passive followers

4
Transnational Investing-UK Example

• Excellent quality, world class science base
• Multi billion investment by government
• Rapid technology transfer and start-up process
• Established science park infrastructure
• Sophisticated International VC investor base
• Well developed stock market

5
Cambridge Science Park
5,000 people 152 acres (61.5 Hectares) 145,540
sq m (1,566,000sq ft) of Research and Development
Facilities
6
Oxford Science Park
UK science parks have fostered small and large
company collaborations
7
Singapore-Making Transnational Finance Happen
Singapore has proven a successful case study for
others to follow

• Knowledge based economy
• Technopreneurship 21
• Life Sciences Manpower Development Programme
• Recent establishment centres of excellence
  science parks
• Houses 90 fund management groups employing 370
  investment professionals
• In 2000, Singapore-based VCs committed 1.35bn
  in 423 projects worldwide
• Regional VC hub now manages 10bn

8
Transnational MA-Cement Capital

• Too many EU companies-not enough capital
• Go it alone is not always the best route
• Funding gap-alive and well
• Merged entity may be more fundable
• Merger accesses new investor base
• Merger often cemented with capital
• Acquisition can also give cash exit

9
Mergers and Acquisitions 2004-2005
Date Acquirer Target Price (m)
Mar 05 Jan 05 Biovitrum Paradigm CBT Amedis n/a n/a
Dec 04 Aphton Corp Igeneon Ag 44.0
Oct 04 Arpida Combio n/a
Oct 04 Invitrogen DNA Res Innov 36.1
Sep 04 QSV Xenova 3.1
Sep 04 Lynx Therapeutics Solexa Ltd 41.1
Sep 04 Medigene Munich Biotech 8.5
Sep 04 Qiagen Molecular Staging 19.6
Aug 04 Graffinity AG Myocontract n/a
Jun 04 Strakan Proskelia n/a
Jun 04 Proteome Inntron 2.4
May 04 Cerep Molecular Engines 2.4
May 04 Repironics Profile Therap 25.3
Apr 04 Alan McClay Galen (SM) 40.0
Mar 04 Arakis Sirus Pharma n/a
Jan 04 Cerep Hesperion 7.1
Denotes Merlin company
10
Transnational Investment Challenges

• Local legal frameworks
• Board representation
• Investment syndication
• Follow on financing
• Getting the deal done
• Exits

11
Transnational Investors-Realising Value

• Access to International markets
• Mezzanine finance
• Broker selection and interaction
• Market making/support
• IPO window (open/shut?)
• Post float management/PR
• Management input
• News flow

12
Transnational Investors-Business Development

• Active investors assist in deal making
• Deals worth over 500m signed with Merlin
  companies
• Novartis, Serono, Pfizer, GSK, AZ, Esteve, Eli
  Lilly, MSD, Teva, Adolor, Endo, Biovitrum,
  Genzyme, Genentech, Cubist
• Largest deal reported in Europe involved two
  Merlin Companies Vectura/Arakis on AD237 for
  COPD- 380m
• Actively pursuing deals worth in excess of 100m

13
Attracting Transnational Finance

• Strong management experienced committed driven
  to succeed ability to listen
• Globally competitive products or services
  addressing areas of major unmet needs
• Strong relevance to markets of choice
• Effective barriers to entry IPR/know how
• Strong interest to retail and institutional
  investors
• Limited cash burn to exit/IPO
• Reasonable pre money valuations
• Existing investors willing to engage

14
Transnational Syndicate Members-Merlin
15
Greece-An Transnational Investment Opportunity

• Biotechnology
• Pharmaceuticals
• Medical devices
• Specialty Pharma
• Generics
• Services
• Intellectual property
• Local investors
• Stock market
• International view
• International interest

16
Transnational Venture Financing

• Jason Rushton

Athens 14th June 2005
Merlin Biosciences Limited 33 King Street St.
James London, SW1Y 6RJ Tel [phone]