merlin biosciences is regulated by fsa transnational venture financing jason rushton athens 14 th...

Merlin Biosciences is regulated by FSA

Transnational Venture Financing

Jason RushtonAthens 14th June 2005

Merlin Biosciences Limited33 King StreetSt. James’London, SW1Y 6RJTel: +44 (0)20 7811 4000

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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

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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

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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

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Cambridge Science Park

5,000 people 152 acres (61.5 Hectares) 145,540 sq m (1,566,000sq ft) of Research and Development Facilities

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Oxford Science Park

UK science parks have fostered small and large company collaborations

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Singapore-Making Transnational Finance Happen

• 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 +

Singapore has proven a successful case study for others to follow

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Transnational M+A-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

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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 (S+M) 40.0

Mar 04 Arakis # Sirus Pharma n/a

Jan 04 Cerep Hesperion 7.1

# Denotes Merlin company

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Transnational Investment Challenges

• Local legal frameworks

• Board representation

• Investment syndication

• Follow on financing

• Getting the deal done

• Exits

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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

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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

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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

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Transnational Syndicate Members-Merlin

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Greece-An Transnational Investment Opportunity

• Biotechnology

• Pharmaceuticals

• Medical devices

• Specialty Pharma

• Generics

• Services

• Intellectual property

• Local investors

• Stock market

• International view

• International interest

Merlin Biosciences is regulated by FSA

Transnational Venture Financing

Jason RushtonAthens 14th June 2005

Merlin Biosciences Limited33 King StreetSt. James’London, SW1Y 6RJTel: +44 (0)20 7811 4000