China Development Industrial Bank

1
??????????????? Foundation of Pacific Basin
Financial Research and Development
Panel Session XVII.  Capital Planning and
Capital Market of Biotech Industry
??(VC)??????????????????
Howard Lee Ph.D. ? ? ? ?? Easy Life Science
Management, Inc. July 9, 2011
EasyLife
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SUMMARY

• Bioindustry is a globally recognized main stream
  growing industry
• Venture Capital Fund vs. Knowledge Based Industry
• Direct Financing Products/Capital Market Analysis
• Taiwan Healthcare Industry Opportunity

EasyLife
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Worldwide consensusKnowledge-based Industries
Early 2009

• US - Barack Obama
• bioindustry?new energy?internet-communication?in
  frastructure
• Taiwan - ? ? ?
• bioindustry?green energy?telecommunication?inf
  rastructure

EasyLife
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Executive Yuan six growing focuses in
knowledge-based Industry

• ???? biotechnology
• ???? healthcare
• ???? agriculture
• ???? green energy
• ???? culture
• ???? sightseeing

EasyLife
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Biotechnology Index Chart in past 10 yrs
BTK AMEX Biotech Index, IXIC NASDAQ Index,
NBI NASDAQ Biotech Index, DJI Dow Jones Index
Source Yahoo! Inc.
EasyLife
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???????????
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SUMMARY

• Bioindustry is a globally recognized main stream
  growing industry
• Venture Capital Fund vs. Knowledge-Based Industry
• Direct Financing Products/Capital Market Analysis
• Taiwan Healthcare Industry Opportunity

EasyLife
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Innovative Source vs. Biotech Industry
Government University Research Institute Hospital

• Non-profit organization
• Supply 85 innovative sources
• Cradle of biotech industry

• Death of Valley
• Professional supportsincubation center?tech
  transfer dept.?evaluation corp.
• VC?Buyout fund?PE fund

• Profit organization
• Connection w/ financial industry
• Connection w/ capital market
• Connection w/ global biotech industry cluster

Biotech Industry
EasyLife
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Across Death of Valley
Firms play a key role in creating value from
biomedical ideas by finding opportunities for
value creation and raising funding based on the
promise of value capture
EasyLife
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Venture Capital Fund vs. Knowledge Based Industry
EasyLife
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Venture Capital
Venture capital may be regarded as an equity
investment where investors expect significant
capital gains in return for accepting the risk
they may lose all their equity
EasyLife
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VC Fund vs. Direct Financing
Direct Financing vs. Indirect Financing

• Direct Financing (involve in corp. management)
  - Equity Investment
• Indirect Financing (NOT involve in corp.
  management) - Loan?Grant?Tax Incentive

UniMed
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SUMMARY

• Bioindustry is a globally recognized main stream
  growing industry
• Venture Capital Fund vs. Knowledge-Based Industry
• Direct Financing Products/Capital Market Analysis
• Taiwan Healthcare Industry Opportunity

EasyLife
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Capital Market and Related Players
Private Market
Public Security Market
Public Offering Market
VC
IPO
Follow-on PIPEs Debt
Investment Bank
VC Fund
Hedge Fund
Mutual Fund
MA ,
Consolidation
Buy-out Fund Private Equity Fund
EasyLife
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Corp. vs. Capital Market
BIO QUITY
Money Distribution in Capital Market
Mutual Funds
(Hedge Funds)
Private Equity Funds
Buy-out Funds
VC Funds
(Angel Fund)
EasyLife
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Capital Market Status decides Industry Type

• Large long term bio fund Drug Industry
• Small short term bio fund Medical Device
  Industry
• Small flexible Investment money
  diversified small and medium enterprise in
  biotech industry

EasyLife
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Drug vs. Medical Device

• High risk, high return
• Need long term money
• Need large smart money
• IPO vs. MA

Biotech Drug Development
HIGH
Total Return
Medical Devices
LOW
HIGH
LOW
Risk

• UnMet Need
• Low risk, low return
• Early liquidity
• High IRR
• Early distributions
• IPO vs. MA

EasyLife
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Drug Development and Approval Process

• It takes 11 years on average for an experimental
  drug to travel from lab to medical chest.
• Only 5 in 5,000 compounds screened in preclinical
  testing make it to human testing.
• 1 of these 5 tested in people is approved.

Expedited review Phase II and III combined to
shorten approval process on new medicines for
serious and life-threatening diseases.
EasyLife
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Taiwan Biotech Industry small medium
enterprise with flexibility
2009 Taiwan Biotech Corp. Allotment
SourceMOEA?????????????????? 2010
EasyLife
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Taiwan TSE?Biotech Healthcare?Sector-18 Listed

• Pharma????(???NT29.81??)?????(???NT25.37??)
  ??????????????????(???NT9.42??)????????
• Reagent???
• Drug Store Channel???
• Functional Food??????
• Medical Device/Channel???????????
• Exercise Instrument?????
• Daily Trading Volume200k4,000k shares

EasyLife
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???????????
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Taiwan OTC?Biotech sector?- 33 Listed

• Pharma/Functional Food??????????????????????????
  ??????????
• Healthcare Service???????????KY??
• CRO/Reagent?????
• Marketing Channel/Functional Food????????????
• Medial Device/Channel????????????
  ??????????????????????????
• Daily trading volume50k4,000k shares

EasyLife
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SUMMARY

• Bioindustry is a globally recognized main stream
  growing industry
• Venture Capital Fund vs. Knowledge Based Industry
• Direct Financing Products/Capital Market Analysis
• Taiwan Healthcare Industry Opportunity

EasyLife
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???????????
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????????????Taiwan Bioindustry Take-off Action
Plan
Executive Yuan approved on 10/7/2009
SIC
BVC
????????????
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???????????
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???????????? Taiwan Bioindustry Take-off Action
Plan

• Direct and Proactive - BVC (??????)
• Indirect and Passive - TFDA - SIC
  (????????) - Integration of research
  Institutions (??????????)

EasyLife
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Global Pharmaceutical Market Forecast
Sales
Europe27
North America 41
Emerging Markets 13
Japan 11
Rest of World 8

• Russia 2013 estimate based on September 2008
  forecast
• Source IMS Health, Market Prognosis

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Taiwan Bioindustry Opportunity

• Taiwan is in critical position in between three
  largest markets in the world

EasyLife
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Howard Lee, Ph.D.howardlee_at_silverbm.com
EasyLife