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Henri-François Boedt

Senior Loan OfficerGrowth Capital and Innovation Finance

European Investment Bank98-100, boulevard Konrad AdenauerL-2950 LuxembourgT: +352 4379 82109M: +352 621 554 540E: h.boedt@eib.org

InnovFin Infectious Disease Finance Facility

A novel approach on filling financing gaps

InnoEnterpriseVienna2018 - 22/11/2018

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“InnovFin Infectious Diseases (IDFF) enables the EIB to provide between EUR 7.5m and EUR 75m to innovative players active in developing vaccines, drugs, medical and diagnostic devices, and research infrastructures for combatting infectious diseases. Financing is aimed at projects that have passed the pre-clinical stage and for which clinical validation is needed for further development.”

InnovFin Infectious Diseases finances companies combatting infectious diseases and antimicrobial resistance

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Programme launched June 2015 - EUR 236m facility

Strong market demand (117 financing requests received)

9 operations signed to date (EUR 173m) + pipeline of several operations and

multiple preliminary contacts

Balanced portfolio of drug/vaccines and medical devices, including several

addressing antimicrobial resistance(1)

Structured as financial instruments, with potentially significant reflows in case of

success

Portfolio is evolving positively - no losses so far despite the high risk profile.

High policy impact: “show case” operations, high degree of Innovation and public

health impact

Most Companies face significant challenges in raising adequate funding for their clinical trials or medical device development.

IDFF contributes to financing them “across the funding gap”

Summary (agenda)

(1) in line with the EU One Health Action Plan against Antimicrobial Resistance

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117 proposals reviewed, leading to 9 signatures to date

Projects reviewed(1) Projects signed and in pipeline

(1) eligible demands for financing received and reviewed

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Drug Development

Medical Devices

Loan amount (x EUR m)

Cavidi (10)

• HIV-test device (Diagnostics)

• Pre-revenue start-up • Loan• Sweden• (FP7 beneficiary)

Transgene (20)

• Clinical trials of 3 ID products

• Portfolio of products • Loan • Institut Merieux

subsidiary• France

Biondvax (20)

• Phase II/III clin. trials • Universal Flu Vaccine• High policy impact• Pre-revenue start-up• Loan + royalties• Israel• (FP7 beneficiary)

Mobidiag (15)

• High multiplex diagnostics device

• Start-up company• Loan + royalties• Finland (+ France)• (FP7 beneficiary)

Davolterra (20)

• Antibiotics microbiota protection (C-diff)

• Pre-revenue start-up• Loan + royalties• France• (FP7 beneficiary)

Stat-Diagnostica (20)

• High multiplex point of care diagnostics

• Pre-revenue start-up • Loan + warrants• Spain

AntibioTx (20)

• New broad spectrum class of antibiotics

• Several programmes• Pre-revenue start-up • Loan + warrants• Denmark

9 operations forming a balanced portfolio

Biocartis (24)

• Oncology + ID IVD• Commercial stage

listed company• Loan• Belgium

G2G Biotech (24)

• New antifungal agent• Clinical trials• Loan + royalties• Austria + UK• (FP6&7 beneficiary)

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Typical IDFF loan structure - compared to other debt financing

* Some of the above figures are generalizations. Final figures are usually subject to due diligence and rating or risk/return approval

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Unserved period

EIB Venture Debt is a long term financing instrument in contrast to shorter term commercial venture debt

Dis

bursem

ent

Com

pany cash flow

s

Year 1

Commercial venture debt:• (VC or private debt fund financing)• Small ticket (usually EUR 1-3m)• No commitment period• Monthly amortization• Usually 3 years maturity• Security / warrants Bridge financing (main purpose to bring company to next valuation inflection point / IPO)

EIB Venture Debt:• Large tickets (EUR 7.5-50m)• Long commitment period (3yrs)• Bullet repayment (5yrs)• No security (usually)• Warrants/upside• Crowd-in of 3rd party funding • Knowhow transfer from EIB to clients

Long-term, patient financing to accelerate technology development and market scale-up while preserving the founders / innovators stake in the company

Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Repayment /

Interest

Com

mitm

ent

Com

pany c

ash flow

s

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8D

isbursem

ent

Repayment /

Interest

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Advantages of the IDFF loan structure (long term venture debt)

• At a stage where companies are not yet eligible for traditional bank financing.

• Long term risk financing for innovative companies.

• Less dilutive than equity, less expensive [or dilutive] than [convertible] venture debt,

• In particular with IDFF, a higher level of risk can be taken than with the EGFF (EFSI)

mandate.

• Coaching and mentoring: Multiple interactions between EIB team and the company

during selection, appraisal, transaction and monitoring. The due diligence process

often acts as a sounding board, often leading to meaningful iterations in the

company’s business plan.

• Policy driven investor: In case of difficulties, EIB will work with the company, aiming at

finding a mutually satisfactory solution, to the benefit of the company, its investors

and the InnovFin programme (opposed to the short term recovery approach of most

commercial banks or venture debt providers).

Key advantage for

companies:

• Operation structured as a financial instrument.

• Loan priced according to risk level: the loan needs to be repaid + interest and upside

participation.

• In case of success, this leads to potentially significant reflows to the IDFF facility (e.g.

up to 1.5 – 2.5 times the loan amount).

Advantage for EC

(InnovFin)