Capital Markets
TVM Life Science
is leading the way with an innovative investment model By: Dr. Luc Marengere
T
VM Capital Life Science (TVM) is one of a relatively small number of venture groups to have successfully raised a Fund anchored by a major strategic partner. TVM Life Science Ventures VII (TVM LSV VII) closed on March 5th, 2012 anchored by the Indianapolis-based pharmaceutical company Eli Lilly & Co (Lilly).
The successful closing of the TVM LSV VII represents a thoughtful alignment of strategies between TVM, a venture group driven by capital efficiencies, and Lilly, a pharmaceutical company looking to increase its access to differentiated innovations. Specific to the venture industry, this more direct relationship by pharmaceutical companies with venture groups is not an impedi-
ment to venture’s entrepreneurial roots and independence but rather it provides a number of elegant solutions to challenges that have negatively impacted the venture capital industry and driven too many investors to reduce or simply eliminate their allocations to the asset class. The challenges facing venture investors, especially in life sciences, too often included (and still include) a lack of capital efficiency with high fixed costs, a lack of focus, under-estimated timelines and total capital needs, and lastly, opacity on the identity of a buyer, timing and exit enabling drivers. TVM believes that an investment thesis focused on developing a single asset by a small team of experts with a proven ability to execute on a well-crafted development plan that incorporates thoughtful feedback from pharmaceutical therapeutic area and commercial experts (the same experts that make a recommendation to buy!) will not only improve capital efficiency but will increase the likelihood of success and build more value for all stakeholders. For TVM, the investment strategy of TVM LSV VII is a continuation of an investment strategy initiated in prior funds this time with a formal relationship with the Chorus group, a wellestablished and independent product development unit of Lilly. Chorus is recognized across the pharmaceutical industry for delivering innovative development strategies and has enjoyed tremendous success, over the last 12 years, initially solely developing assets provided by Lilly and, since March 2012, developing third-party assets supported by TVM LSV VII investments. We believe that working with Chorus adds a new dimension to our capacity to focus our capital, reduce development timelines and budgets, as well as providing transparency on exit. While it is important to note that TVM LSV VII will dedicate a sizable portion of its capital to the areas of medical technologies, dental, late-stage pharmaceuticals, imaging and other sectors of life science, TVM LSV VII will focus its investment activities on single pharmaceutical assets licensed or assigned to project-focused companies (PFCs). Specifically, TVM targets innovative pre-clinical and early clinical assets, whether small molecule entities or biologics, in a number of therapeutic areas including but not limited to metabolic diseases, especially type-2 diabetes and kidney diseases, oncology, CNS indications including pain, cardiovascular, men’s sexual health and inflammatory diseases. TVM LSV VII is specifically focused on investing in assets aimed at targets that April/May 2014 BIOTECHNOLOGY FOCUS 17
