eib support in life sciences - european commission · 2016: eur 83.7bn capital markets funding in...
TRANSCRIPT
EIB Support in Life Sciences
Shiva Dustdar
Head of Division, Innovation Finance Advisory
European Investment Bank
BIO-Europe
Berlin, 7 November 2017
EIB at a glance
The EU bank:
• Established in 1958
• Shareholders are the 28 EU Member States
• Around 90% of lending within the EU
World’s largest International Financial Institution:
• Largest multilateral lender
• Largest multilateral capital markets borrower
• Primarily focused on EU but with large operations outside
Total assets
in 2016:
EUR 573bn
Lending
volume in
2016:
EUR 83.7bn
Capital
markets
funding in
2016:
EUR 66.4bn
Solid credit fundamentals:
• AAA-rated by the three major rating agencies
• Own funds in 2016 of EUR 66.2bn
• Capital adequacy ratio in 2016 of 26.4%
• Favourable borrowing conditions passed on to clients
Key lending priorities (2016 levels of investments – EIB Group):
ENVIRONMENT
EUR 16.9bn
INFRASTRUCTURE
EUR 19.7bn
INNOVATION
EUR 13.5bn
SMEs
EUR 33.6bn 2
EIB Group Products
…covering the entire cycle of a company’s development
Pre- seed Stage of development Startup Small MidCaps
<250 employees MidCaps
250-500 Large MidCaps
500-3,000
Emerging Large Caps
Seed stage
First “Valley of Death”
Second “Valley of Death”
Access t
o f
inan
ce
Fu
nd
ing
siz
e (
EU
Rm
)
Intermediaries (Funds)
Intermediaries (Banks)
Mandates/ SLA Global Loans
Investment Loans
Contingent Loans
Qu
asi-
eq
uit
y
Co
-in
vest
me
nts
/Dir
ect
Eq
uit
y
Tech
Tra
nsf
er /
VC
VC
/ S
ME
Fun
ds
VC
/ S
ME
Fun
ds
PE
/ M
idC
ap F
un
ds
< 1.0m
< 7.5m
< 10m
< 25m
Innovation finance gap
Growth Finance Gap – expansion capital EUR 7.5m-25m
3
EIB has invested EUR 8.6 billion in Life Sciences
over the past 10 years
4
From 2007 to 2017, the
Bank’s investments in the
sector reached EUR 8.6bn,
averaging EUR 785m per year
EUR 8.43bn used for projects
within the EU
Remaining EUR 170m for
projects mostly in the
Mediterranean region or EU
accession countries
InnovFin Programme Overview
5
6
Improve framework conditions for
financing
Develop “business case” for new
financing mechanisms in RDI sectors
Prepare studies on increasing
effectiveness of financial instruments
to address specific sector/RDI policy
objectives
Horizontal Activities Advise companies on EIB and other
sources of financing
Improve bankability/investment
readiness
Enable earlier/ faster access to
finance
Projects Advisory
Projects
Advisory
Transfer of
Lessons
Learned
Horizontal
Activities
Pipeline
Development
Leverage horizontal (market) studies
to identify funding gaps
Where necessary, recommend
internal EIB-managed instruments
and/or Investment Platforms (IP)
Structure/implement IP that mobilise
public/private investors
Investment Platforms
Innovation
Finance
Advisory
Infectious Diseases
Finance Facility (InnovFin Thematic Product)
Funding
Funding Gap
Analysis (e.g. Study on Access to Finance
in Life Sciences)
Innovation Finance Advisory (IFA) – What do we do?
6
IFA’s portfolio of Horizontal Activities
Innovative Life
Science
SME Instrument
Road Transport
KETs
Phase II
Key Enabling Technologies
Bio- economy
SET Strategic Energy
Technology
Pilot LPA
Light Project Advisory
Circular Economy
Financing Pan-EU RI
IDFF
Infectious Diseases
Finance Facility
KETs Phase I
Key Enabling Technologies
Approved/ Ongoing Completed
RTOs
Research and Technology
Organisations
Agri-Food
Digital Economy II
Electronic Components &
Systems/Photonics
Space Technologies
Funding Web-Tool
2.0
Digital Economy I
High Performance Computing & European
Science Cloud
Digital Economy III
Digital Innovation Hubs
Circular Bioeconomy
Thematic Investment
Platform
Dedicated Renewable Energy and CCS Project
Development Assistance (NER
300)
7
Project advisory to finance portfolio of TB vaccines
Horizontal activity on access-to-finance for ID R&D
Development of new InnovFin product, the IDFF
Project advisory support to mobilize public and private capital
IFA prepared the ground for Infectious Diseases Financing
Facility (IDFF)
8
Broad range of products - standard debt instruments (i.e. senior,
subordinated, and mezzanine) to risk sharing instruments (RSL) with
forgiveness options
EIB can only finance 50% of project costs
Comprehensive due diligence (legal, financial, technical, etc.)
Projects Direct Lending
Up to EUR 75m
9
How does InnovFin Infectious Diseases work?
9
Review of all Promoter's Infectious Diseases R&D activities
Definition of risk-sharing portfolio (entire portfolio or sub-set of the most
promising compounds incl. at least 5-10 different streams to diversify risk)
Pharma
InnovFin Infectious Diseases
10
Innovative vaccines and R&D financing
10
Projects which have passed pre-clinical stage and for which clinical
validation is needed for further development
Loan amount: min EUR 7.5m, max EUR 75m
Loan maturity: up to 7 years
Currency: EUR and local currency
Pricing : commensurate to the risk incurred
Eligible Projects
Vaccines, drugs Medical and
diagnostic devices Manufacturing plants
Infectious diseases
Innovative
11
Which projects can be supported?
11
Case Study – Da Volterra EIB supports the development of innovative solutions for
the prevention and treatment of antibiotic-resistant infections
EUR 20m quasi equity operation with the EIB Group
Two-tranche disbursement conditional upon operational
milestones
Signed in July 2017
Supported under ‘InnovFin – Infectious Diseases’
Protecting the Intestinal Microbiota from the
Deleterious Effects of Antibiotic Treatments
“This operation under the InnovFin facility demonstrates the
EU's determination to tackle major public health problems. We
hope that this loan will help to improve the quality of life of
people affected by infectious diseases and reduce the risk of
development of antibiotic resistance.“
Carlos Moedas,
European Commissioner for Research, Science and Innovation
Small Paris-based biopharmaceutical company
Developing a new agent designed to prevent Clostridium difficile
infections and the emergence of resistant bacteria by protecting
intestinal flora from the disruption caused by antibiotic treatment
“The EIB loan will provide us with significant additional
resources to take forward our research programmes in a critical
area, that of serious bacterial infections. This loan will help meet
the challenge posed by today’s multi-resistant bacteria and
multiple infectious risks.“
Florence Séjourné, CEO of Da Volterra
www.davolterra.com 12
Case Study – AntibioTx EIB supports Danish biopharmaceutical company in fighting
multi-drug resistant bacteria
www.antibiotx.com
EUR 20m quasi equity operation with the EIB Group
Two-tranche disbursement conditional upon
operational milestones
Signed in October 2017
Supported under ‘InnovFin – EU Finance for
Innovators’
Privately held, clinical stage
pharmaceuticals company
Headquartered in Denmark
Develops novel class of
antibiotics with a new
mechanism of action to treat
bacterial infections and related
disorders
“The financing from EIB provides valuable support to the
development of our pipeline contributing to our vision to becoming a
sustainable innovator of treatment options at the intercept of
microbiology and immunology.”
AntibioTx CEO Rasmus Toft-Kehler
“Since the 1970’s only a few new antibiotic classes have been
introduced. Therefore we are proud to support AntibioTx’ clinical
development, which we hope will make a difference in fighting multi-
drug resistant bacteria.”
EIB Vice-President Alexander Stubb
13
Case Studies – Other equity-type operations
14
Photovoltaics
Germany
€ 20 million
11/09/2016
Fibreoptics
Spain
€ 10 million
21/10/2016
Software
The Netherlads
€ 7.5 million
09/11/2016
Biotechnology
Ireland
€ 20 million
01/12/2016
Software
Greece
€ 25 million
16/12/2016
Biotechnology
NL/DE
€ 25 million
16/12/2016
Ultracapacitors
Estonia
€ 15 million
10/02/2017
Grid stabilization
Italy
€ 30 million
11/04/2017
Database software
Finland
€ 30 million
12/04/2017
Dermathology
Germany
€ 20 million
19/05/2017
Molecular diagnostic
Spain
€ 20 million
01/06/2017
Software
Sweden
€ 8 million
21/06/2017
Medical Technology
Germany
€ 30 million
10/08/2017
Medical Technology
France
€ 20 million
07/07/2017
ICT
Finland
€ 15 million
12/07/2017
Medical Technology
Germany
€ 35 million
08/08/2017
ICT
Sweden
€ 30 million
04/08/2017
Medical Technology
Austria
€ 25 million
28/08/2017
Nutrition
France
€ 30 million
10/09/2017
Drug Discovery
Germany
€ 75 million
08/09/2017
4G deployment
France
€ 25 million
11/09/2017
Covered in
Phase I
Covered
in Phase II
London &
SEE
Catalonia,
ESP
Bavaria, DE
Poland
e.g. Agritech and
veterinary
products
Medicines Medical
devices
Digital
products
Companion
Diagnostics
Medical technologies Non-medical tech
Core Focus Limited Assessment Out of Scope
Scope of work Key findings
Three factors underpin the financing challenge:
1
2
3
Average investment size is too low
Investment periods are too short
Investment is limited to select therapeutic areas
• There is a lack of follow-on venture capital
investment (C-D) preventing SMEs from growing
• Limited investment forces companies to focus
on only one or two lead products at a time
• There is a mismatch between investment
periods and product development times
• There has been a recent emergence of
“Evergreen funds”, however they are few and
far between
• There is a “pack mentality” where the same
small group of investors co-invest in similar TAs
• Investment flows to therapeutic areas with better
“exit potential”
Estimated c. EUR 25-30bn funding gap within innovative life
science R&D in the 4 bio-clusters for 2017 - 2021
Horizontal Activity Example: Life Sciences
The report will make specific recommendations
to help to address the financing gap
15
Contact Details
Alessandro de Concini
Innovation Finance Advisory
Advisory Services Department
Phone: (+352) 4379 88442
eFax: (+352) 4379 58442
eMail: [email protected]
European Investment Bank
3, rue Jean Monnet
L-2180 Luxembourg
Shiva Dustdar
Head of Division
Innovation Finance Advisory
Advisory Services Department
Phone: (+352) 4379 87316
eFax: (+352) 4379 57316
eMail: [email protected]
European Investment Bank
3, rue Jean Monnet
L-2180 Luxembourg
Paulina Brzezicka
Innovation Finance Advisory
Advisory Services Department
Phone: (+352) 4379 82176
eFax: (+352) 4379 52176
eMail: [email protected]
European Investment Bank
3, rue Jean Monnet
L-2180 Luxembourg
16