Health Care I ndustry and Overview of Clevelands BioEnterprise I - - PDF document

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Overview of Cleveland’s Health Care I ndustry and BioEnterprise I nitiative

November 14, 2007

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Overview

• Regional Health Care Base: 2002
• Transformation: Role of State
• BioEnterprise and Entrepreneurship
• Lessons Learned

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Cleveland Health Care Base

• > $450 Million in annual research
• Numerous nationally-distinctive

programs including:

• Cardiovascular
• Cancer
• Neurology
• Orthopedics
• Surgery
• Pediatrics
• Medical imaging
• Biomedical engineering
• Stem cells & tissue engineering
• Advanced materials
• Molecular diagnostics
• Anti-infectives
• Prions
• Destination for innovation and care

Nationally-recognized leaders in clinical care and research …

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Biopharma- ceutical 16% Device/ Equipment 68% Health Care Services/IT 10% Other 6%

Cleveland Health Care Base

• ~ 500 health care

companies in region

• Five > $1 billion companies
• r divisions
• Over 20,000 employees

… a broad industry base…

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W eak Com m ercialization

8 33 2001 2002 5 6 2 1 2 2

CLEVELAND AREA HEALTH CARE VENTURE INVESTMENT Companies Financed …How ever, few com panies w ere attracting grow th equity CLEVELAND AREA HEALTH CARE VENTURE INVESTMENT $ Millions

Source: Dow Jones Venture Wire; Venture Source; BioEnterprise

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Broad Effort Required

Pipeline People Clinical Capital

• Community-

wide effort

• Collaboration
• Connectedness

… regionally and nationally

Grow th

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2 0 0 2 : Com m itm ent to Grow th

• Private
• Renewed focus on entrepreneurs and

innovation

• Technology transfer culture capabilities

significantly enhanced

• Investment firms and professional services
• Public
• $ 1 .6 Billion in Third Frontier program
• Philanthropic
• Fund For Our Economic Future: $60 million
• Investments for capital formation

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Third Frontier I nitiative

• $1.6 Billion, 10-Year Initiative
• Funding for:
• Research distinctiveness and translation
• Capital formation and attraction

(seed and venture)

• Entrepreneurial infrastructure (inc. BioEnterprise)
• Company acceleration
• Characteristics of program:
• Multi-institution collaboration required
• Nationally competitive and nationally assessed
• Leverage (9: 1 ratios)

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BioEnterprise I nitiative

Mission Be the leader in biosciences industry growth focused on recruiting and attracting entrepreneurs, creating, accelerating, and retaining start- ups, and nurturing and promoting a vibrant business environment Approach Market-back catalyst, consultant, and funding connector Results

• Over 60 companies accelerated
• > $565 million in new growth funding raised by companies
• Technology offices have completed over 160 deals and collected more

than $65 million in licensing revenues

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Approach

…position com panies to raise capital…

• Experienced

management support

• Clinical and research

collaborations

• Business

development

• Network of bioscience

capabilities

…from targeted, interested investors

• Access to capital
• Venture/ equity
• Strategic
• Debt
• Grant

Choose/ create

• pportunities that

are fundable…

• Regional

entrepreneurs

• Institutions
• Foreign recruitment
• Company creation

Market-back Approach

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Role 1 : Connector

Pipeline People Clinical Capital

• Institutional

Technology

• Regional Start-ups
• Foreign Start-ups
• Existing Companies

(PE)

• C-level talent
• Service firms:

technical, professional

• Contract individuals

(e.g, reg., reimb.)

• Clinical sites
• Advisory boards
• Equity firms:

venture, PE

• Debt sources
• I-banks
• Angel groups
• Grants

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Role 2 : Catalyst … Through Collaboration

Pipeline People Clinical Capital

• Technology Offices

and Enterprise Groups

• Business attraction

groups

• “101” courses
• JumpStart
• Events
• National networks
• New funds
• Angel groups
• SBIR training
• Investment banking

networks

• Conferences
• National networks

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Entrepreneurship I nfrastructure

• Skilled and Resourced Intermediaries
• BioEnterprise Initiative
• Institutional Technology Offices
• Combined > 40 professionals
• Regional Healthcare Equity Environment
• 11 venture firms (regional and national)
• 4 Seed funds
• 3 Angel groups and funds
• 5 private equity groups
• Funded by private, philanthropic, and public

sectors

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Venture I nvestm ents

2001 2002 2003 2004 2005 2006 YTD07 8 33 3 2 6 1 1 7 1 8 7 EQUI TY I NVESTMENTS $ Millions 2 1 2 2 2 3 2 4 2 5 2 6 Y T D 7 5 6 1 3 2 1 1 6 2 2 COMPANI ES FUNDED 2 3 4 2 4

A vibrant, bioscience start-up environm ent…

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I nvestm ent Destination

EXTERNAL EQUITY INVESTORS IN CLEVELAND COMPANIES, 2004-Present

Cleveland Area Com panies

W est Coast

• Angiotech AAdvance
• Compass Group
• DW Healthcare
• Hambrecht & Quist
• Palo Alto Investors
• SV Life Sciences
• Vivo Ventures
• Western Technology

Midw est

• Beecken Petty
• Blue Chip Venture
• CID Equity
• Medtronic
• Ohio Tech Angel Fund
• Reservoir Ventures
• Thomas McNerney Partners
• Triathlon Medical Ventures

South

• ExOxEmis
• MB Ventures
• Pappas Ventures
• River Associates
• Texas Pacific

Boston

• Ampersand Ventures
• Bain Ventures
• Boston Scientific
• Capital Resource Partners
• Morgenthaler Ventures
• MPM Capital
• Norwich Ventures
• Polaris Ventures
• RA Capital

New York Area

• Accipiter Capital
• Behrman Capital
• Cowen
• Domain Associates
• DSM Venturing
• Greatbatch
• Investor Growth Capital
• Johnson & Johnson
• Jordan Capital
• LSKW Investments
• MSD Capital
• North Peak Capital
• Oak Investments
• Orbimed Advisors
• Psilos Group
• Radius Ventures
• Sunrise Equity
• Welsh Carson

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ …W hich has attracted national investm ent dollars

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Midw est Health Care I nvestm ents, 2 0 0 7

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Related Developm ents

• Global Conferences
• CCF Medical Innovations Summit
• IBF Global Healthcare Investing Conference
• Clinical conferences
• Global Medical Mart (2009)
• Permanent and temporary exhibition space

for medical technology companies

• Trade and clinical shows

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Key Success Factors: BioE

• Small, invested Board
• Single metric with targets based on

aspirational benchmarks

• Simple model, easy to communicate
• Private-sector approach
• Strong support and complementary

developments