Much Ado About Nano: The Inve$tment Climate for NanoMedTech Ventures

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Much Ado About NanoThe Invetment Climate for
Nano-MedTech Ventures

• Omar Amirana, MD
• Oxford Bioscience Partners
• MassMEDIC
• April 10, 2007
• OAmirana_at_oxbio.com

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What is nanotechnology?
Nanotechnology is the understanding and control
of matter at dimensions of roughly 1 to 100 nano
meters Unique phenomena enable novel applicatio
ns Nanotechnology involves imaging, measuring, mo
deling, and manipulating matter at this scale
A nanometer is one-billionth of a meter. Typi
cal 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
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Source www.nano.gov
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Longer term, nanomedical opportunities are
mystifying and intoxicating
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Respirocytes
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Implantable 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.
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Vascular System and Hematology Police
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USPTO Nano A lot of coolstuff looking to
solve problems
Results of Search in US Patent Collection db for
nano 12473 patents. Hits 1 through 15 out of
12473
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Nano King of Cool
Recommended photo gallery M. Meyyappan Director
, Center for Nanotechnology NASA Ames Research Ce
nter Moffett Field, CA 94035 meyya_at_orbit.arc.na
sa.gov web http//www.ipt.arc.nasa.gov
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National Nanotechnology Initiative (NNI founded
2001) main source of RD dollars but VC is
significant
Nanotech is still in its infancy But the
investment sector is real
Source(s) www.nano.gov, Thomson VentureSource
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Venture capitalists have funded companies in the last 10 years
Source Thomson VentureSource
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Exits in nanotech have been scarce
Source Thomson VentureSource
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Life science provided majority of exits (13 of
20) 6 known exits 100M
Nanotech Exits Accent Optical Technologies Acqu
ired for 45M Acusphere IPO at 226M Angstron
Systems Acquired at undisclosed price
Applied Optronics Acquired at undisclosed
price Aprio Technologies Acquired at undisclose
d price Arryx Acquired at 32M BioForce Nanosc
iences Acquired at undisclosed price
Clinical Micro Sensors Acquired at 280M
Iomai IPO at 132M MicroE Systems Acquired fo
r 55M Molecular Insight Pharmaceuticals IPO at
381M Nanogen IPO at 217M Nanogram Devices
Acquired for 45M Nanophase Technologies IPO a
t 59M Nanotronics Acquired at undisclosed pric
e NimbleGen Systems Filed for IPO 3/07 Protome
trix 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
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Post-IPO performance has been disappointing
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Biotech/Pharma companies are partnering instead
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.

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MedTech companies are not acquiring nano
companies either and can provide barriers
Larger MedTech companies do not want to ackn
owledge flaws in their products.
have no real need to improve unless threatened.
view nanotech as an expensive incremental im
provement / alternative do not want to negativ
ely impact ASP or margin
Biophan developed coatings for pacemaker and ICD
leads to improve MRI compatibility.
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The ultimate example Drug Delivery
Needle Injection is Traumatic Painful Ineffe
ctive / Imprecise Dangerous at times Decades old

Accepted But EASY INEXPENSIVE
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Other B franchises that might benefit from
nanotech where adoption has lagged
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Success stories include 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 investi
gational 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.
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but they are rare, recent, and often
repurposed
Even AGAM needed time to reach success
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Awareness, investments and spending should
continue to increase
Nanotechnology related goods and services by
2010-2015
USD trillions
Other
Conservative case
Materials
Aerospace
Chemical Manufacturing
NSF Estimate
Pharmaceuticals
Aggressive case
Electronics
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as the nano brand gets diluted and continues
to be used for marketing
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The Next Big Thing is Really SmallHow
Nanotechnology Will Change the Future of Your
Businessby Jack Uldrich
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Recent nano applications/ innovations are not
typical for typical VCs...
Sunscreens and cosmetics Longer-lasting tennis ba
lls Longer and straighter flying golf balls Ligh
t-weight, stronger tennis racquets
Burn and wound dressings

• 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
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but the future of nanotechnology in medicine
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.

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Predictions 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

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Certainty Things will not stay the same.
Thanks to Pei Ho, Oxford Bioscience Partners