PharmaTelevision - Novartis Venture Funds: How the Funding Model Works

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Video title: Novartis Venture Funds: How the Funding Model Works

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In this episode of PharmaTelevision News Review, Fintan Walton talks with Anja König, Managing Director at Novartis Venture Funds. Filmed at Bio-Europe Spring 2010 in Barcelona, Spain, they discuss:

• The history and structure of the funds

• The Novartis Option Fund

• MPM Capital's involvement in the funds

• Working on a syndicated basis

• The level at which Novartis Venture Funds tends to invest

• When the fund typically liquidates its assets

• Recent success

• Working with other venture funds

• Advantages to pharma companies working alongside investors as an investment model

• Biotech's struggle during the fincancial crisis

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The history and structure of the funds.

Fintan Walton:

Hello and welcome to PharmaTelevision News Review here in Barcelona at BioEurope. On this show I have Anja Konig, who is Managing Director at Novartis Venture Fund based in Basel, Switzerland. Welcome to the show.

Anja Konig:

Thanks very much.

Fintan Walton:

Anja Konig, the first thing we should do is to help the audience or remind the audience how Novartis Venture Fund has structured it's various funds because you have a number of financial instruments basically by which you invest into biotech, could you describe those various funds first of all?

Anja Konig:

Alright, well may be it helps if I go a little bit into the history of the funds, essentially the Novartis Venture Fund started up at the merger of Ciba-Geigy and Sandoz, now 13-years ago and at that point Novartis Venture Fund as a company set aside a 100 million Francs in order to fund start-ups and spin out that came out of resources and staff that were essentially obsolete after the merger and the idea was that with the 100 million Swiss Francs that would be at essential what happened is that the fund made early investments that were very successful and it was structured as an ever green fund so the fund got to reinvest the returns and subsequently this private equity fund grew to what's currently about $550 million on the management out of their own returns. So this is the core and the nucleus of what the Novartis Venture Fund was and even is today. This fund is structured like I said as an ever green fund it is driven primarily, it's actually driven purely by financial return. So it's a financial vehicle that reports up into corporate finance.

Fintan Walton:

Within Novartis Venture Fund ?

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Anja Konig

Managing Director

Anja Konig is a Managing Director at the Novartis Venture Fund in the Basel office. She is active in Switzerland and Europe and also manages a $20m fund in Korea. Anja Konig serves on the board of directors for Nabriva, Heptares, Covagen, Diagnoplex, and Bicycle Therapeutics. Before her appointment to the Novartis Venture Fund she held the position of assistant to the Chairman and CEO of Novartis. Prior to joining NovartisAnja Konig was an Associate Partner at McKinsey and Company in New York City, a global consultancy, where she was a leader in McKinsey's North American Pharmaceutical Practice and a knowledge expert on pharmaceutical research and drug discovery. Dr. Anja Konig has experience working in the US, Europe and Emerging Markets. Anja Konig is a scientist by training and holds a PhD in physics from Cornell University.

Novartis Venture Funds

Novartis Venture Fund (NVF) currently manages more than USD 650M across all their funds and have expanded the investment teams in their two locations Switzerland and USA. In 2008 their portfolio increased by seven new investments and now comprises over 50 companies, making the Novartis Venture Fund one of the world's largest corporate biotech venture funds. Including the commitment of the investors, about USD 2B is currently invested in total into Novartis Venture Fund portfolio companies. The demonstrated significant liquidity events over the past decade continued this year and they are confident in their purpose and their ability to provide value beyond their investment dollars. Their primary focus will remain on the development of novel therapeutics and platforms. They balance the therapeutics focus with investments in medical devices, diagnostics or drug delivery systems. In their investments they look for unmet need and clinical impact, novel proprietary science and understanding of mechanism, management and board experience and capital efficiency in the program.