Conference Addresses Industry Disruption
Funding Available but Industry Sees Uptick in Non-Traditional Financing Methods
Nutter hosted Acceleration2016 on December 6. This year’s Acceleration conference focused on two key themes: exploring the challenges of truly disruptive companies in creating a strategic path to market in conditions of great technological, regulatory and business uncertainty, and discussing the rise of non-traditional funding sources to support a wide range of new venture creation and growth. This was the fifth Acceleration conference hosted by the firm.
Convening Life Sciences Leaders
Acceleration brings together thought leaders and industry shapers from biotechnology, pharmaceuticals, medical devices, diagnostics, health IT, and digital health to discuss how scientific innovation and disruptive models affect the business of starting and growing early stage life sciences ventures.
“The Massachusetts life sciences cluster is the strongest and most admired in the world for its collaborative efforts,” said Michelle Basil, partner in Nutter’s Life Sciences Practice Group. “Like the CEOs, investors and industry shapers in the room, Nutter is dedicated to supporting the introduction of new drugs, devices, diagnostics, and technologies that will be the future of human health and medicine.”
Keynote by Dr. Bernat Olle
Dr. Bernat Olle, CEO of Vedanta Biosciences, a company developing a class of drugs that work by modulating the human microbiome, with an initial emphasis in autoimmune and inflammatory diseases, delivered the keynote. Vedanta, which took in a combination of strategic and financial capital, was an excellent example of a cutting edge company striving to define a path in an uncertain environment. “In founding Vedanta, we looked for the convergence of new scientific insights, the emergence of new tools, specific and licensable IP, and lack of competition when identifying opportunities for new company formation,” he said.
Panel One: New Frontiers in Medtech/Biotech/Health IT: Creating Products in a Disruptive Environment
- Charles Carignan, CEO, BionX Medical Technologies
- Michael Greeley, General Partner, Flare Capital Partners
- Luba Greenwood, Global M&A and Business Development, Roche Diagnostics
- Moderated by Jeremy Halpern, Partner and Co-Chair, Emerging Companies, Nutter
Expanding off the Vedanta story, the first panel continued the conversation and provided insights around working in a disruptive and uncertain environment.
- Notwithstanding the potential for healthcare policy changes under the new administration, the U.S. healthcare system will continue to move toward a more value-based model, and the market demands of better access and lower cost healthcare solutions will affect budget setting and investment decisions among healthcare buyers.
- In the healthcare services space, we are seeing a lot of disruption around business model innovation and the underlying payment model.
- Customer behavioral change is needed for adoption of new disruptive technologies so gaining customer engagement early on is critical.
- Medical technology companies, in particular, need to demonstrate a reimbursement pathway, clinical utility and economic value in order to attract investors.
- The business of healthcare is undergoing what one panelist described as “the democratization of care,” as a result of which investors are becoming interested in innovations that can impact huge patient populations that have traditionally had less access to care.
Panel Two: Capital Raising Structures: Innovative Approaches and Investors
- Steven Fox, Vice President, Zaffre Investments
- Skip Irving, Vice President, Noveome, Inc./Board Member, The Michael J. Fox Foundation for Parkinson's Research
- Travis Wilson, Investment Partner, Gurnet Point Capital
- Moderated by Michelle Basil, Partner, Life Sciences, Nutter
The second Acceleration panel analyzed innovative approaches in capital raising including the rise of new entrants.
- We are seeing a consolidation in life sciences focused VCs, but there’s still a significant amount of money being raised.
- The larger VC funds are identifying their own areas where they want to invest and deploying “venture formation strategies,” starting companies themselves by sourcing science and leadership and assembling new entities.
- There will continue to be more “unholy alliances” where traditional VCs, private equity firms and strategic partners are coming together to maximize their syndicate and learn from each other.
- To stand out to VCs, companies need to communicate how their therapeutic, device or diagnostic is improving clinical outcomes and/or lowering the cost of healthcare.
- There is an appetite from VCs for solutions that change the care continuum and impact a whole suite of services with new efficiencies.
- Angel groups are increasingly sophisticated and are a very viable source of funding for some technologies. Given the smaller dollars usually deployed, they are a good fit for life sciences companies with clear paths and light capital requirements for product development. Financing biotechnology companies through angel funding is a challenge due to the funding requirements for clinical trials.
- Family offices and foundations often have additional flexibility in their investment thesis, as well as an impact approach that aligns well with the long term bets often being made in the life sciences.
Acceleration is an annual invite-only educational and networking event hosted by Nutter that welcomes founders, executives, and board members of early stage life sciences companies; angel investors; venture capital investors; corporate venture investors; private foundation investors; business development executives; and university/research technology licensing officers.
To see more photos of Acceleration2016, please visit the gallery.
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