Scott Jordan was profiled in the Sept. 7, 2012 edition of Nature Medicine. Though slightly taken out of context, his comments reflect the challenges associated with raising equity crowdfunding in the life sciences industry. Subscribers to Nature Medicine can read the full text of the article here.
S. Jordan Associates recently launched a Crowdfunding/Inbound Marketing consultative platform, SJAConnect, for emerging growth companies seeking financing from Accredited and Non-Accredited Investors (pending final SEC regulations – Crowdfunding). Please click on the link below for more information on how to generate investor leads from SJAConnect.
Crowdfunding platform EarlyShares raised $1.15 million in its first round of funding, according to VentureBeat. EarlyShares raises money for businesses by selling equity shares to small investors, a different business model than competing platforms like Kickstarter or IndieGoGo which follow a donation-based model.
Miami-based EarlyShares hopes to support a broad variety of companies, “ranging from technology startups to organic dog food companies.” According to VentureBeat, people would be able to invest up to $10,000 per year, or 10% of annual income, and no more than $2,000 per investment.
Learn more at VentureBeat’s website.
Recently, a charity and non-profit Crowdfunding platform, Rally.org, raised $7.9 million from investors including Greylock Partners and Google Ventures. Read more about the deal here.
In a recently published white paper, S. Jordan Associates profiled how emerging growth biotechnology companies can leverage Crowdfunding to raise non-dilutive capital from investors with “compassionate use” goals:
“In many cases individuals may not come to expect their financial investment to solely yield monetary gains. Startups wanting to explore Crowdfunding might attain success through “medical interest networks” such as patient advocacy groups, foundations or clinical societies that are dedicated to a certain condition or diseases. The entertainment industry has demonstrated success in appealing to hobbyists and aficionados (often offering nothing more than free movie tickets or screenplays), and a similar case may be made for healthcare companies attracting those with philanthropic goals. Investors at the lower end of the spectrum ($1,000 – $5,000) may see investments as glorified donations; a way to further a good cause.
Healthcare is one of the few spaces where an investor can see a direct quality of life improvement through a financial pledge. It is also one of the few spaces so obviously rooted in moral tenets; the power and interests of patients and their families. This will be important especially for those companies looking for effective treatments in fields where there are no therapies available (i.e., Alzheimer’s disease, Huntington’s disease).”
A poll was taken during the Angel Capital Association meeting in Austin, TX, during “The New Reality – Impact of Washington DC Policymakers on Angels and Startups” break-out led by Joe Bartlett – Sullivan & Worchester and Bill Carleton – McNaul, Ebel, Nawrot, & Helgren. The poll inquired which strategy would be most effective in attracting Angel Capital including: Capital Gains Exemption (SB 2050, Small Businesss Tax Extenders Act of 2012), Angel Tax Credit (SB 256, American Opportunities Act), and Crowdunding.
50% of the attendees selected Tax Credit; 30% Capital Gains Exemption and 7% Crowdfunding. The Poll highlights Angels’ lack of awareness or understanding of regarding Crowdfunding
Raising capital through Crowdfunding will be challenging for life science companies given the industry’s capital intensity and investor preference for liquidity (drug development associated with long approval timelines). S. Jordan Associates (SJA), a Chicago-based life sciences consultant/investment bank, advises emerging growth biotechnology companies on viable pathways for raising funding through Crowdfunding and has published research on the topic.
Below is a link to research illustrating viable Crowdfunding structures for life science companies:
For more information on Crowdfunding please download the SJA “White” Paper at the URL address below:
On June 1, 2012, Healthios/SJA (Chicago-based investment bank) sponsored an industry Partnering Forum, H/X @ ASCO 2012. 51 “Strategic” large pharma/biotech and emerging growth companies attended the Forum participating in over 180 meetings. Scientific platforms/biologic pathways profiled by leading emerging growth biotechnology companies included: CSCs, CSF-1R, EGFR, ErbB3, HGF/SF, LSD1, P53, Raf, RNAi, Syk, TGFβ, Tie-2, VEGFR, WT1.
Participating “Strategic” Large Pharma/Biotech
Abbott Laboratories, Amgen, Astellas Pharma, AstraZeneca, Bristol-Myers Squibb, Celgene, EMD Serono, Forest Laboratories, GlaxoSmithKline, Ipsen, MedImmune, Merck, Millennium Pharma, Novartis, Pfizer, Pierre Fabry, Roche, Sanofi, Sunovion and Teva Pharmaceuticals.
Participating Emerging Growth Biotechnology Companies
Ambit Biosciences, Ambrx, Acceleron Pharma, Ambit Bioscience, Array BioPharma, AVEO, BetaCat Pharmaceuticals, BIND Biosciences, Cerulean Pharma, Cleave Biosciences, Cylene Pharma, Dicerna Pharmaceuticals, Eleison Pharmaceuticals, Eleven Biotherapeutics, Fate Therapeutics, Formula Pharmaceuticals, Halozyme, Immunocellular Therapeutics, IRX Therapeutics, KaloBios Pharmaceuticals, ParinGenix, Pathwork Diagnostics, Portola Pharmaceuticals, Proacta Therapeutics, Salarius Pharmaceuticals, Theracrine, Tragara Pharmaceuticals, and Verastem.
For access to a free “White” paper exploring the dynamics surrounding Equity Crowdfunding (JOBS Act) and the financing vehicle’s projected impact on funding emerging growth biotechnology companies, please visit the SJA Landing Page below:
Healthios Capital Markets, a Chicago-based boutique investment bank focused exclusively on the emerging healthcare community, is proud to announce our exclusive partnering event preceding ASCO this year, entitled “H/X @ ASCO 2012.”
Abbott Laboratories, Amgen, Astellas Pharma, AstraZeneca, Bristol-Myers Squibb, Celgene, EMD Serono, Forest Laboratories, Genentech, GlaxoSmithKline, Ipsen, Merck, Millennium Pharma, Novartis, Pfizer, Roche, Sanofi, Sunovion and Teva have confirmed so far.
To date, the following companies have confirmed participating: Ambit Biosciences, Ambrx, Acceleron Pharma, Array BioPharma, AVEO, BetaCat Pharmaceuticals, BIND Biosciences, Cerulean Pharma, Cylene Pharma, Dicerna Pharmaceuticals, Eleison Pharmaceuticals, Eleven Biotherapeutics, Fate Therapeutics, Formula Pharmaceuticals, Immunocellular Therapeutics, KaloBios Pharmaceuticals, ParinGenix, Portola Pharmaceuticals, Proacta Therapeutics, Salarius Pharmaceuticals, Theracrine, Tragara Pharmaceuticals, and Verastem. We are expecting 25-30 emerging growth biotechnology confirmations in the strategically important areas of epigenetics, cancer stem cells (CSCs), immunotherapy, tumor microenvironment, tumor metabolism, anti-angiogenesis, tumor targeting, and next generation cytotoxics.
To kick off our Healthios Partnering meeting at 11:45 a.m. on Friday, June 1, Verastem’s senior management team will keynote our partnering program over lunch by presenting its case study, “Verastem: Inception to IPO,” chronicling the January 2012 IPO for this cancer stem cell company (http://www.verastem.com). We will be hosting the event at the prestigious Union League Club, 65 W. Jackson, in downtown Chicago.
On Friday, June 1, Strategics will have the opportunity to meet privately for 30 minutes with up to eight emerging growth companies and will have access to the companies’ non-confidential management presentations on our research portal (www.healthios.com/hx).
Pharma/Biotech companies which have participated at previous H/X events include Johnson & Johnson, Sanofi, Novartis, Abbott Labs, Becton Dickinson, Bio-Rad , Gen-Probe, LabCorp, Luminex, Quest Diagnostics, Qiagen, Siemens Healthcare Diagnostics and Sysmex.
Healthios is an investment bank focused exclusively on the emerging growth healthcare community: strategic buyers, institutional investors and their portfolio companies – with a practice dedicated to Oncology Therapeutics. The Healthios Exchange (“H/X”) is a unique research platform which enables invited users to access the resources, research and relationships which are fundamental to superior value creation. Our partnering events are extensions of the H/X, as we believe partnering to be at the core of innovative new medicines in Oncology.