Venture capital in Green Chemistry

Denis Lucquin

2011, March 25th

2

Deep Expertise

  Founded in 1972, independent partnership since 1997

  Paris-based with a European focus and a US connection

  €1.1b under management

  Last fund (Sofinnova Capital VI, €260m) closed in December 2009

  Team of nine investment professionals, a century of experience,

  Active investment style, typically lead or co-lead with Board seat

  Focus on the creation of World Leaders from Europe

  Focus on value: •  Early stage •  Attractive valuations •  Large ownership stakes

  Focus on key vertical markets: •  Therapeutics in Life

Sciences •  Wireless in Technology •  Energy and Green

Chemistry in Cleantech

  History of success: •  Actelion •  VistaPrint •  Nicox •  CoreValve •  Fovea ….

A Leading European Venture Capital firm dedicated to early stage, spin-offs and re-start investments in Technology, Life Sciences & Cleantech

A Long History A Clear Strategy

  Late stage assets for early stage startups

Focus on Value

  At the heart of Sofinnova’s DNA

  Taking risks at the lowest possible price, and largest possible stake

3

  Critical situations with tired investors at a time when their business could take off

SERIES A: seeding the best companies

SERIES A’: making the most of re-starts

SPIN-OFFS: extracting value from Corporates

4

Companies EV at exit Premoney first round

Role of Sofinnova

Corevalve (Apr 2009) $850m $5m Seed

Fovea (Oct 2009) $481m $300k Seed

Novexel (Mar 2010) $505m $15m Lead A round

Movetis ( Oct 2010) $556m €12m Lead A round

Preglem (Oct 2010) $463m €1m Seed

What we said in 1995

 Pharma industry : patent clift and R&D productivity decreasing

 Biotech : a paradigm shift in pharma R&D

 Remain focused

5

6

What we say today (2005/2010)

 Chemical industry : petroleum feedstock unstability and regulatory constraints

 Biotech (and green chemistry): a paradigm shift in chemical R&D

 Remain focused

“Green Chemistry” : at the crossroad of several industries

  Chemical industry : need to shift from petroleum feedstock

  Agro food industry : opportunity to go up the value chain

  Oil and Gas :

Strategic value for technologies

7

“Green Chemistry” : a 200B$ opportunity

Source: USDA, U.S. Biobased Products Market Potential and Projections Through 2025

8

2010 2025 Share Value(B$) Share Value(B$)

Commodity Chemicals 1-2 % 5-11 6-10 % 50-86

Specialty Chemicals 20-25% 87-110 45-50% 300-340

Fine Chemicals 20-25% 25-32 45-50% 88-98

Polymers 5-10% 15-30 45-50% 45-90

Total 5-7% 132-183 22-28% 483-614

Bio Based Chemical Markets

9

But be careful at hypes

and downs …… !

Expectations

Time

Technology

Trigger

Peak of

Inflated

Expectations

Trough of

Disillusionment

Slope of

Enlightenment Plateau of

Productivity

The Gartner Hype Cycle

Time

Technology

Trigger

Peak of

Inflated

Expectations

Trough of

Disillusionment

Slope of

Enlightenment

Plateau of

Productivity

Expectations

Solar Thin film

Fuel cells

LED Lighting

Grid storage

Batteries

CPV

Smart grid

Power efficiency

Onshore Wind

Solar new packaging

Wave energy

Offshore wind

Micro Inverters

Multicrisstaline PV

Solar thermal CdTe PV

Amorphous PV

A Gartner Hype Cycle in Cleantech…

Green Chemistries

H2

EV

12

And with still fundamental challenges ….

 Substitution play : will IP provide the same protection compared with red biotech ?

 COGS/margins matter : different skillness, necessity to push processes to their limit …..

 Open innovation culture ? Is the big industry ready to buy ….at a good price

13

Launching a seed fund ….

 €30m for10 to 12 investments

 Dedicated to green chemistry and industrial biotech

 Corporate investors

13

15

A true technology platform …..

16

And never forget …….

17

1 %

17, rue de Surène , 75008 PARIS +33 1 53 05 41 00 +33 1 53 05 41 29

info@sofinnova.fr / www.sofinnova.fr

CLIMBING TOGETHER

19