Module 4 Assessing the Valuation of New Ventures

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					                              Executive MBA in Management of Technology – MoT
                                 ~ Targeting Entrepreneurship & Innovation ~



                                              Module 4

                     Assessing the Valuation of New Ventures
                           in Biotech, Medtech, Pharma
                                         27-29.04.2010
                   at EPFL, Odyssea Building, level minus 1, classroom – 1 021


Module Leaders (in order of appearance)
•   Dr Patrik Frei, Founder and CEO of Venture Valuation AG
•   Dr Richard Munton, Former investment Manager at F. Hoffmann-La Roche Ltd
•   Dr Susanne Acklin, VP Life Sciences at Venture Valuation
•   Dr Eric Montagne, Co-founder and partner of i-Risk GmbH
•   Dr. Colin Sanctuary, Co-founder and CEO of QGel SA
•   Dr Carmelo Bisognano, Founder and CEO of EasyMed Services SA
•   Dr Roman Fleck, Principal at Index Ventures


Objectives

The aim of this course is to provide attendees with a global overview on valuation and analysis
techniques, to apply them through case studies, to address licensing deals and risk management.
Additionally, testimonial of an entrepreneur and view point of a renowned Venture Capitalist will
complete the lectures on project's valuation.


Overview
A large number of topics will be addressed such as: Key Factors for valuation, Assessment of a company,
Overview of different valuation methods: NPV/DCF methods, IRR/Patent valuation, Market valuation, Product /
Decision Tree Valuation. A number of practical aspects will also be addressed such Licensing Deals, Risk
Management, Investors considerations, etc.



Evaluation

Evaluation will be based upon answers to one or more case study/quizz.




                              MoT – EPFL, Odyssea, Station 5, CH-1015 Lausanne
                               Phone: +41-21-693-5324 Fax: +41-21-693-2489
                                            E-mail: mot@epfl.ch
                                              www.epfl.ch/mot
Assessing the Valuation of New Ventures
in Biotech, Medtech, Pharma


                            Executive MBA in Management of Technology – MoT

                              ~ Targeting Entrepreneurship & Innovation ~

Biography of module leaders

                          Dr. Patrik Frei is founder and CEO of Venture Valuation Inc., a company
                          specializing in valuation of high growth companies and products in
                          biotechnology/life     sciences.  Venture     Valuation     also   runs
                          biotechgate.com and many other country databases in Europe, Asia and
                          North America.

                          Patrik graduated from the Business University of St. Gallen and
                          researched valuation of high growth companies for his PhD at the Swiss
                          Federal Institute of Technology, EPFL Lausanne.

                          Patrik is also a board member and founder of ineo, a holding company of
                          the Swiss dental implant VC-backed firm Thommen Medical and a board
                          member of OphthalmoPharma Inc. a Swiss upcoming pharmaceutical
                          company specializing in the development of ophthalmology treatments.

                           Dr. Richard Munton is currently employed as an Investment Manager in
                           a corporate Venture Fund. Prior to this, he was a Business Analyst at
                           Venture Valuation AG, Switzerland, performing independent third-party
                           financial and strategy evaluations of high-growth companies in the area
                           of life sciences.

                           Dr. Munton holds a BSc (HONS) in Pharmacology from the University of
                           Edinburgh (1996), a PhD in Neuroscience from the University of Bristol
                           (2002), and an MBA from the University of St. Gallen (2006). Dr. Munton
                           has also held a number of research positions including with Novartis,
                           SmithKline Beecham, the Swiss Federal Institute of Technology and the
                           University of Zurich.


                           Dr. Susanne Acklin has more than fifteen years of global
                           pharmaceutical and biotechnology industry experience. Her professional
                           background includes executive roles at Axentis Pharma AG (Chief
                           Operating Officer); Venture Valuation AG (VP life sciences; company and
                           product valuations); the University of Western Ontario (Associate Director
                           Technology Transfer); Viron Therapeutics (Senior VP Product
                           Development); and Eli Lilly (Manager Regulatory Affairs and Clinical
                           Research). Dr. Acklin holds a Doctor of Philosophy II (PhD) in
                           Neuropharmacology and Neurophysiology from the Biocenter of the
                           University of Basel, Switzerland and conducted her post-doctoral studies
                           at the University of Toronto, Canada. Dr. Acklin has lectured on topics
                           including Pharmaceutical Product Development, Intellectual Property
                           Protection and Business Development, Licensing and Negotiation at the
                           University of Toronto, the University of Western Ontario and the Richard
                           Ivey School of Business in London, Ontario, Canada.

Her primary area of expertise spans drug discovery and development, regulatory affairs, clinical
research, Intellectual Property and Technology Commercialization, as well as company and product
valuation and due diligence assessments.




                           MoT – EPFL, Odyssea - Station 5, CH-1015 Lausanne
                             Phone: +41-21-693-5324 Fax:+41-21-693-2489
                                          E-mail: mot@epfl.ch
                                            www.epfl.ch/mot                                             2
Assessing the Valuation of New Ventures
in Biotech, Medtech, Pharma


                             Executive MBA in Management of Technology – MoT

                                ~ Targeting Entrepreneurship & Innovation ~
 




Biography of module leaders (continued)
                            Dr. Eric Montagne is partner and co-founder of i-Risk GmbH.
                            i-Risk offers unique consulting services in the fields of risk and
                            opportunity management as well as supply chain and strategy. The ETH
                            Zurich spin-off company is now serving many top European firms.

                            Eric holds a PhD in Risk Management from the chair of Technology and
                            Innovation Management of Prof. Roman Boutellier at ETH Zurich. Prior,
                            he obtained the Executive MBA in Management of Technology (MoT),
                            organized jointly by EPFL & UNIL-HEC, and initially studied economics at
                            UNIL-HEC in Lausanne.

                            Dr. Colin Sanctuary is co-founder and CEO of QGel SA, a spin-off
                            biotech company from the EPFL whose purpose is to develop and
                            commercialize products of therapeutic relevance to improve R&D
                            methods in the biopharmaceutical industry.

                            After obtaining his PhD in Biomedical Engineering, Colin held various
                            business development and marketing positions at Straumann and
                            Medtronic, both world leading medical device companies.

                            Dr. Carmelo Bisognano is CEO of EasyMed Services SA (formerly
                            Lifescience-consulting SA), which was founded thanks to private equity.
                            Dr. Bisognano had a post-doctoral position at the University Hospital of
                            Geneva where he conducted research on molecular regulation of
                            bacterial resistance. He is also the author of publications in international
                            scientific journals and has obtained several awards for his research work
                            (GSK and MSD Awards, Swiss Society for Infectious Diseases).
                            He then worked as a biotechnology consultant for portfolio and fund
                            managers and as a Marketing Manager in a bioinformatics company.
                            More recently, he collaborated with investment funds for their strategic
                            portfolio allocation.
His company proposes EasyMedMobile.com, an innovative solution that meets the needs of millions
of people worldwide by providing a better health management service, designed specifically to help
individuals take control of their personal health anywhere in the world.

                            Dr Roman Fleck joined the life science team of Index Ventures in early
                            2006 and is a Principal based in the Geneva office. Prior to joining Index
                            he worked for seven years at Boehringer Ingelheim Pharmaceuticals
                            where he held roles of increasing responsibility in preclinical drug
                            discovery in the areas of inflammation and cardiovascular therapies as
                            well as later on in business development. Under his leadership several
                            compounds were moved into clinical development.

                              Roman received his Ph.D. in organic chemistry from the Massachusetts
                              Institute of Technology (MIT) where he performed research on catalytic
                              antibodies. His research efforts resulted in many publications in
prestigious journals, as well as issued patents and patent applications. In addition, he was awarded
an MBA from New York University's Stern School of Business where he continues to serve as a
mentor for aspiring entrepreneurs.
Currently, he serves on the boards of GlycoVaxyn and Versartis, while remaining closely involved with
Funxional Therapeutics, Normoxys, and OncoEthix.
                             MoT – EPFL, Odyssea - Station 5, CH-1015 Lausanne
                               Phone: +41-21-693-5324 Fax:+41-21-693-2489
                                            E-mail: mot@epfl.ch
                                              www.epfl.ch/mot                                              3
                                                    Executive MBA in Management of Technology – MoT

                                                       ~ Targeting Entrepreneurship & Innovation ~

Module 4                                    Assessing the Valuation of New Ventures                                                  Location: ODY -1 021

  Day-Time                     Who                                Main topics                                 Assignement / Class Activities
Tue 27.04.2010                                                                                            To be read in advance:
                 Patrik Frei                1)   Introduction to Valuation                                - IMD-1-0241 Venture Valuation V2.2
   09:00-10:30                                                                                            - IMD-1-0240 Genedata
   11:00-12:30   Venture Valuation, CEO     2)   Assessment of a company                                  - IMD-1-0242 Novartis Venture Fund

   14:00-15:30   Patrik Frei                3)   Overview of different Valuation Methods                  Group Work
   16:00-17:30                              4)   Case study assessment and financial valuation

Wed 28.04.2010
  09:00-10:30    Richard Munton             1)   Product / Decision Tree Valuation
  11:00-12:30    F. Hoffmann-La Roche Ltd   2)   Case study on product Valuation

   14:00-15:30   Susanne Acklin             3)   “Anatomy” of a License – A Practical approach to deal
                                                 structure and licensing in the life sciences field
                 Venture Valuation, VP
                                                     Basics of Technology Transfer –
                                                     commercialization strategy and timing.
                                                     The Importance of choosing the right partner –
                                                     the “handshake” principle.
                                                     Understanding key concepts of a licensing
                                                     agreement – the anatomy of a license
   16:00-17:30                                       Recognizing red flags and pitfalls
                                                     Structuring a deal to create a win win situation –
                                                     what do I give and what do I get?
                                                     Practice elements of successful negotiation –
                                                     case work – who negotiates the best terms - and
                                                     what are they?
                                                     Managing IP and license agreements after the
                                                     deal is made – happily ever after...


                                                    MoT – EPFL, Odyssea, Station 5, CH-1015 Lausanne
                                                     Phone: +41-21-693-5324 Fax: +41-21-693-2489
                                                                  E-mail: mot@epfl.ch
                                                                    www.epfl.ch/mot                                                                         4
                                                      Executive MBA in Management of Technology – MoT

                                                         ~ Targeting Entrepreneurship & Innovation ~

Module 4                                   Assessing the Valuation of New Ventures                                                       Location: ODY -1 021

  Day-Time                      Who                                     Main topics                             Assignement / Class Activities
Thu 29.04.2010
                 Eric Montagne             Managing Risks:                                                 To be read in advance:
   09:00-10:30
                                                                                                           - Be prepared
                 i-risk, partner
                                                                                                           - Nature Publishing Biologys New Dimension 424870a
                                           1)    Introduction to Risk Management and presentation of the   - The Economist Printing Organs
                                                 company QGel SA                                           - The Economist StemCell Cancer Sep 2008
                                                                                                           - Lutolf Designing biomaterials to direct stem cell fate
   11:00-12:30   Dr. Colin Sanctuary       2)    Risk Management Process applied for QGel SA               _2009 nature 08602
                 QGel SA
                                                 a.    Identification
                 Co-founder and CEO
                                                                                                           Group work:
                                                 b.    Evaluation

                                                 c.    Cause and measure analysis                          Identification and assessment of QGel SA’s risks

                                                 d.    Integration and implementation


Thu 29.04.2010
                                                                                                           To be read in advance:
   14:00-15:15   Carmelo Bisognano         Experience & testimonial of a New Venture Entrepreneur
                                                                                                           - Nature Biotech 6 Secrets 290509
                 EasyMed Services SA
                 CEO


   15:45-16:45   Roman Fleck               What matters to VC's
                 Index Ventures, Partner


   17:00-17:30   Participants              Quiz on knowledge acquisition




                                                      MoT – EPFL, Odyssea, Station 5, CH-1015 Lausanne
                                                       Phone: +41-21-693-5324 Fax: +41-21-693-2489
                                                                    E-mail: mot@epfl.ch
                                                                      www.epfl.ch/mot                                                                                 5
Assessing the Valuation of New Ventures
in Biotech, Medtech, Pharma


                                  Executive MBA in Management of Technology – MoT

                                    ~ Targeting Entrepreneurship & Innovation ~




Course Material

To be read in advance:

Day 1
- IMD-1-0241 Venture Valuation V2.2
- IMD-1-0240 Genedata
- IMD-1-0242 Novartis Venture Fund

Day 3
- Be prepared
- Nature Publishing Biologys New Dimension 424870a
- The Economist Printing Organs
- The Economist StemCell Cancer Sep 2008
- Lutolf Designing biomaterials to direct stem cell fate 2009 nature 08602

- Nature Biotech 6 Secrets 290509

Lecturers’ presentations, articles, case studies and other documents will normally be distributed in class



Bibliographyt


(1) Frei P. & Leleux B., Valuation—what you need to know, NATURE BIOTECHNOLOGY volume 22
    number 8, August 2004, p. 1049-1051
(2) Frei, P. & Leleux, B., Valuating the company. In Starting a Business in the Life Sciences—from
    Idea to Market. (Luessen, H. (ed.).) 42–55 (Edition Cantor Verlag, Aulendorf, Germany, 2003)
(3) Seget S., (2005) Decision Resources Inc 11, 1-19
(4) Burrill & Company. Biotech 2007 Life Sciences: A Global Transformation
(5) Kellog D. et al., (2000) Analyst Journal 56, 62-75




            All the information contained in this module description is subject to change without notice.

                                     MoT – EPFL, Odyssea - Station 5, CH-1015 Lausanne
                                       Phone: +41-21-693-5324 Fax:+41-21-693-2489
                                                    E-mail: mot@epfl.ch
                                                      www.epfl.ch/mot                                        6