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Much Ado About Nano:Much Ado About Nano:
The InveThe Inve$$tment Climate for Nano-tment Climate for Nano-MedTech VenturesMedTech Ventures
Omar Amirana, MDOxford Bioscience Partners
MassMEDIC
April 10, 2007
What is nanotechnology?What is nanotechnology?
Nanotechnology is the understanding and control of matter at dimensions of roughly 1 to 100 nanometers
• Unique phenomena enable novel applications• Nanotechnology involves imaging, measuring,
modeling, and manipulating matter at this scale
A nanometer is one-billionth of a meter.
• Typical C-C bond lengths are in the range .12-.15 nm• DNA double-helix has a diameter around 2 nm• The smallest cellular life forms, the bacteria of the
genus Mycoplasma, are around 200 nm in length.
Unique behavior: physical, chemical, and biological properties of nanoscale materials can be exploited for a large variety of applications
Source: www.nano.gov
Source: www.nano.gov
Longer term, nanomedical opportunities Longer term, nanomedical opportunities are mystifying and intoxicating…are mystifying and intoxicating…
RespirocytesRespirocytes
Implantable Nano Power SourcesImplantable Nano Power Sources
Nanowires convert mechanical energy into current. They could be implanted in the body, and, driven by muscle contractions, blood flow, or external vibrations transmitted through tissue. They could power implantable sensors.
Vascular System and Hematology PoliceVascular System and Hematology Police
USPTO & Nano: A lot of coolUSPTO & Nano: A lot of coolstuff looking to solve problemsstuff looking to solve problems
Results of Search in US Patent Collection db for: nano: 12473 patents. Hits 1 through 15 out of 12473
PAT. NO. Title
7,200,493 Method for screening crystallization or amorphous stage conditions for molecules
7,200,318 Near infra-red composite polymer-nanocrystal materials and electro-optical devices produced therefrom
7,200,308 Frequency conversion with nonlinear optical polymers and high index contrast waveguides
7,200,152 Local area network for distributing data communication, sensing and control signals
7,200,006 Compliant thermal interface for electronic equipment
7,199,983 Magnetoresistive device utilizing a magnetoresistance effect for reading magnetic information
7,199,981 High reliability-parallel data transfer hard disk drive
7,199,924 Apparatus and method for spectral-beam combining of high-power fiber lasers
7,199,809 Graphic design of combinatorial material libraries
7,199,498 Electrical assemblies using molecular-scale electrically conductive and mechanically flexible beams and methods for application of same
7,199,443 Integration of filters using on-chip transformers for RF and wireless applications
7,199,439 Microelectronic imagers and methods of packaging microelectronic imagers
7,199,305 Protosubstrates
7,199,278 Conversion of oxygenates to olefins
7,199,277 Pretreating a catalyst containing molecular sieve and active metal oxide
Recommended photo gallery:M. Meyyappan
Director, Center for NanotechnologyNASA Ames Research Center
Moffett Field, CA [email protected]
web: http://www.ipt.arc.nasa.gov
Nano = King of CoolNano = King of Cool
National Nanotechnology Initiative (NNI; founded 2001) = National Nanotechnology Initiative (NNI; founded 2001) = main source of R&D dollars but VC $ is significantmain source of R&D dollars but VC $ is significant
Sources of Nanotech Funding
74 84 104
656
399 420 417530
633 649
464
697
863
9891,081
1,351 1,3921,445
0
200
400
600
800
1000
1200
1400
1600
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
E
2008
E
$
Private Equity Funding
Government (NNI) Funding
Nanotech is still in its infancy – But the investment sector is real
Source(s): www.nano.gov, Thomson VentureSource
Venture capitalists have funded <150Venture capitalists have funded <150“nano” companies in the last 10 years“nano” companies in the last 10 years
1997-2007 Nanotech Financings and Post-$ Valuation
5.811.4
14.2 13.017.6
41.0
53.5
89.5
3.08.3 10.0
7.08.2
24.0
40.0
78.1
0
10
20
30
40
50
60
70
80
90
100
Seed/A Round B Round C Round All Other Rounds
$
Average Raise
Average Post- $
Median Raise
Median Post-$
Source: Thomson VentureSource
Exits in nanotech have been scarceExits in nanotech have been scarceCompanies Raising Venture
Money between 1997 and 2007
140
82
54
33
0
20
40
60
80
100
120
140
160
Seed/ARound
B Round C Round All OtherRounds
# o
f C
om
pa
nie
s
Status of 1997-2007 Venture-Backed Nanotech Companies
614
106
14
0
20
40
60
80
100
120
Public Acquired Private Out ofBusiness
# o
f C
om
pa
nie
s
Source: Thomson VentureSource
Life science provided majority of exits Life science provided majority of exits (13 of 20); 6 known exits > $100M(13 of 20); 6 known exits > $100M
2
9
1
22
4
Drug delivery Medical Device
Life Science Tools Electronic Manufacturing
Semiconductor Specialty Materials
Nanotech Exits
Accent Optical Technologies – Acquired for $45M
Acusphere – IPO at $226M
Angstron Systems – Acquired at undisclosed price
Applied Optronics – Acquired at undisclosed price
Aprio Technologies – Acquired at undisclosed price
Arryx – Acquired at $32M
BioForce Nanosciences – Acquired at undisclosed price
Clinical Micro Sensors – Acquired at $280M
Iomai – IPO at $132M
MicroE Systems – Acquired for $55M
Molecular Insight Pharmaceuticals – IPO at $381M
Nanogen – IPO at $217M
Nanogram Devices – Acquired for $45M
Nanophase Technologies – IPO at $59M
Nanotronics – Acquired at undisclosed price
NimbleGen Systems – Filed for IPO 3/07
Protometrix – Acquired at undisclosed price
Quantum Dot – Acquired at undisclosed price
Tailored Materials – Acquired at undisclosed price
Third Wave Technologies – IPO at $457M
Source: Thomson VentureSource
Boxed companies have valuations > $100M
Post-IPO performance has been disappointingPost-IPO performance has been disappointing
Biotech/Pharma companies are partnering Biotech/Pharma companies are partnering instead of acquiring nanotech companiesinstead of acquiring nanotech companies
• Oxonica licensed nanoparticle tagging technology to Becton Dickinson to create clinical diagnostics (2007)
• Nanosyn signed agreements with Amphora, Arqule, and Euroscreen to provide medicial chemistry services using its nanoscale technology (2005-2006)
• Psivida, which develops drug delivery products, signed an exclusive research and license agreement for its technology with Pfizer Inc primarily for ophthalmology and oncology. It will receive up to $155 million in development and sales-related milestone payments.
MedTech companies are not acquiring nano MedTech companies are not acquiring nano companies either; and can provide barrierscompanies either; and can provide barriers
Larger MedTech companies:
• do not want to acknowledge flaws in their products.
• have no real need to improve unless threatened.
• view nanotech as an expensive incremental improvement / alternative
• do not want to negatively impact ASP or margin
Biophan developed coatings for pacemaker and ICD leads to improve MRI compatibility.
The ultimate example: Drug DeliveryThe ultimate example: Drug Delivery
Needle Injection is:
TraumaticPainfulIneffective / ImpreciseDangerous at timesDecades oldAccepted
But…EASYINEXPENSIVE
Other $B franchises that might benefit from Other $B franchises that might benefit from nanotech where adoption has laggednanotech where adoption has lagged
Success stories include Success stories include Advanced Magnetics (AMAG)… Advanced Magnetics (AMAG)…
Ferumoxytol, the primary value driver for Advanced Magnetics, is currently in four Phase III multi-center clinical trials for use as an iron replacement therapeutic in chronic kidney disease (CKD) patients.
Combidex is an investigational functional molecular imaging agent consisting of iron oxide nanoparticles for use in conjunction with magnetic resonance imaging, also known as MRI, to aid in the differentiation of cancerous from normal lymph nodes.
……but they are rare, recent, but they are rare, recent, and often ‘repurposed’and often ‘repurposed’
Even AGAM needed time to reach success
28%
17%
9%
6%
9%
31%
Awareness, investments and spending Awareness, investments and spending should continue to increase…should continue to increase…
0.5
1.1
2.0
• Conservative case
• NSF Estimate
• Aggressive case
•Materials
•Electronics
•Chemical Manufacturing
•Aerospace
•Pharmaceuticals
•Other
Nanotechnology related goods and services – by 2010-2015USD trillions
……as the “nano” brand gets diluted and as the “nano” brand gets diluted and continues to be used for marketingcontinues to be used for marketing
The Next Big Thing is The Next Big Thing is Really Small:Really Small:
How Nanotechnology How Nanotechnology Will Change the Future of Will Change the Future of
Your BusinessYour Business
by Jack Uldrichby Jack Uldrich
• Sunscreens and cosmetics
• Longer-lasting tennis balls
• Longer and straighter flying golf balls
• Light-weight, stronger tennis racquets
• Burn and wound dressings
Recent nano applications/ innovations Recent nano applications/ innovations are not “typical” for typical VCs...are not “typical” for typical VCs...
• Step assists on vans• Bumpers on cars• Paints, Ink and coatings• Automobile catalytic
converters• Metal-cutting tools• Stain-free clothing and
mattresses• Dental-bonding agent
Source: www.nano.gov
……but the future of nanotechnology in but the future of nanotechnology in medicine could be a VC sweet spotmedicine could be a VC sweet spot
• Advanced drug delivery systems, including implantable devices that automatically administer drugs and sensor drug levels
• Medical diagnostic tools, such as cancer tagging mechanisms, lab-on-a-chip, real time diagnostics, or Sensors for airborne chemicals or other toxins
• Cooling chips or wafers to replace compressors in cars, refrigerators, air conditioners and multiple other devices, utilizing no chemicals or moving parts
• Photovoltaic (solar) cells, fuel cells and portable power to provide inexpensive, clean energy
• New high-performance materials
• THM: Find a specific problem that NEEDS to be solved.
Predictions and ProbabilitiesPredictions and Probabilities
• Nanotech will grow through corporate partnerships
• Large companies will drive nanotech adoption in various areas, avoid adoption in others
• VC Investments will be selective (later stage/proven?)
• VCs will need to set aside plenty of reserves
• More IPOs; VCs will likely invest in more PIPEs
• There will be some big winners and many losers
Certainty: Things will not stay the same.Certainty: Things will not stay the same.
Thanks to Pei Ho, Oxford Bioscience Partners