Marco Boorsma describes Forbion Capital Partners’ investment strategy and gives his personal perspective on the future of the Biotech sector




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Video title: Marco Boorsma describes Forbion Capital Partners’ investment strategy and gives his personal perspective on the future of the Biotech sector
Released on: April 20, 2011. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, Fintan Walton talks to Marco Boorsma, Senior Analyst at Forbion
Types of investments
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at BIO-Europe in Milan, in spring 2011. On this show I have Marco Boorsma , who is a Principal at Forbion Capital Partners based in Holland, welcome to the show.
Marco Boorsma:
Thank you Fintan.
Fintan Walton:
Forbion Capital Partners came out of I understand ABN AMRO originally, tell us little bit about the history of Forbion Capital Partners and the types of investments your business does?
Marco Boorsma:
Yes, well first of all thank you for having me here. Yes as you said there rightfully Forbion spun out from ABN AMRO in back in 2006 it was actually the team that is now Forbion is pretty much was before at ABN AMRO doing the same type of investments as we do right now, so life science investments, biotechnology drug development and medical devices, I will get to that in a bit more detail later on. So the team got the opportunity to take the portfolio with a 200 million front in total into Forbion Capital Partners and just continue the business as it is as ABN AMRO but then as a standalone French capital with Coller Capital and ABN AMRO as the main shareholders at that time and that was then the secondary then defined for us to two other LPs.
Fintan Walton:
Okay, and since it was spun out of ABN AMRO has it raised new money as well for it's some for new funds?
Marco Boorsma:
Yes, so actually we've raised two other funds one is a add on Co-Invest Fund for Fund I this would take an higher part of increase our share in the companies we think are felt promising and successfull and of course the need of offer of cash so that is really dedicated to companies of our Fund I portfolio.
Fintan Walton:
Existing that stage, yes.
Marco Boorsma:
Exactly and then last year we closed well the third fund investing in new opportunities new companies about a hundred close to 140 million euro fund and of that we already did seven investments from those fund besides that we co-manage a smaller fund BioGeneration Ventures which is focused on Netherlands based spin out seed investments, so we help them or co-manage that fund building up the companies and you know may be get them ready for larger investments from Forbion for example.
Fintan Walton:
So it sounds like you like to follow companies, you like to get in at an early stage and then follow them all the way through, is that correct?
Marco Boorsma:
It's always a combination, when I am here at BIO-Europe we see a lot of companies young companies at this moment they may not be the ideal candidate for us to invest because we have a kind of you know a timeline horizon when we would like to see our money back, but still it may well be that next year when we have BIO-Europe in Amsterdam our home turf that a good moment to engage and to dig into the company much deeper. So it's really a combination of follow-on companies and investing companies that we now feel are ready for us to invest and that would be at hugely late preclinical stage, early clinical stage depending on indications again how translatable you would say the animal models are into the human setting.
Fintan Walton:
Okay, so if you look at the portfolio of companies that you have invested in, I mean I think there is quite a considerable number that you have on your portfolio is that correct?
Marco Boorsma:
Yes, I think we still have about 15 to 18 companies in for Fund 1 and as I said really we have seven companies in Fund II now still making well about 25 companies now.
Fintan Walton:
In totally all?
Marco Boorsma:
Yes.
Investment strategy
Fintan Walton:
So the types of companies that you have invested in and there some of those companies are based in Holland obviously you are investing in that local companies, but equally you've invested not just only in Europe but outside Europe as well, so what is your strategy there?
Marco Boorsma:
Yes, so geographically I think one third about we invest in North America, US, Canada and then two thirds go to European, so our main focus clearly is Europe, Netherland is home turf so we see pretty much all opportunities there, have quite some investments in the Netherlands, but the last couple of investments were in Germany, in UK Cellnovo in UK was the last one, in Germany, and in Scandinavia as well. So focus on Europe we like to see the companies in the Netherlands also to get with our BioGeneration Ventures colleagues, but certainly not restricted to only to the Benelux.
Fintan Walton:
Right, now like all funds you've got a limited period on which you can keep that fund going that puts pressure on you to exit from some of the investments that you do, you're a major shareholder as I understand a major investor one of the largest investors in BioVex that was recently acquired by Amgen [PharmaDeals ID = 38987], how often and what is the liquidity in terms of getting money back from your investments currently?
Marco Boorsma:
Yes that is a large variation I would say, yes some companies we were also investors in Borean Pharma a Danish company and in GlycArt for example the company was sold to Roche [PharmaDeals ID = 21128] and I think we were less than a year and invested for less than a year in that company. So that's nice a quick return of money, BioVex was a much longer process and probably also because of that therapeutic the drug they tried to develop which was not really the standard oncology drug let's say it's oncolytic virus so it needed really some more proof, some more patients, some more conferencing before a pharma decides to pick it up and you know of course it's become a tremendous success in the BioVex company and actually not only for the investors, not only for the founders for the people and for all, but certainly for the patients that are really benefiting from a treatment in the trials and hopefully of course once this on a markets lot of more patients will get much better by that treatment.
Co-investment with other VC's and corporate venture arms
Fintan Walton:
Okay, now the other, you obviously co-invest alongside other venture capital firms is there any specific role that you have or you tended to be a lead investor or a co-lead?
Marco Boorsma:
Yes generally leads and our co-leads it seldomly happens actually that we completely follow an investment it may happen of course and we you know we could still do that, but anyways we will do our own homework, our own due diligence make use of course what's on the table from syndicate partners already there but still have our own experts, our own people look at each opportunity and look at it in detail. Speaking about syndication that is getting more more difficult because of the amount of money in the markets lot of VC's have difficulties in raising money we have been very fortunate I would say that we were able to raise a significant amount over the last years so we can actively invest in companies and of course we tried to share with colleague VC's and yes now especially in Europe there is.
Fintan Walton:
A reduced number of VC's?
Marco Boorsma:
A reduced number of VC's.
Fintan Walton:
So, but obviously then the pharma venture arms are becoming an important part of the play?
Marco Boorsma:
Yes, exactly and it seems like every pharma is now.
Fintan Walton:
Put a venture arm?
Marco Boorsma:
Yes, is starting it's venture arm, which is fine it gives a kind of validation already for the company, because I am sure they gonna ask their former colleagues hey what do you think of that company and of the technology so that is of course a big help and now it's more and more common that even two or three and there sometimes even four corporate ventures in one company leading the whole deal.
Fintan Walton:
And does that help you, does that give you confidence in the investments that you make?
Marco Boorsma:
Well it's a one hand you know there is money and what the money you can take as usual and there you usually have good expertise so on that respect it's comforting. On the other hand of course you are also kind of have your company already attached to a sort of pharma and if you wanna sell your company later on the question is how well can you still get a competitive bit out of for your company later on.
Fintan Walton:
The corporate venture arms often say that you know they are very flexible about those sorts of things?
Marco Boorsma:
Yes and of course you can write down a lot of in contracts how you gonna deal with it, but in the end they are of course closer to the company than anyone else. So if they have two or three venture arms you know it's probably fine and of course also even venture arms like Novartis ventures I think is really independent from Novartis and they bring a lot of expertise as well. So it probably also depends a bit on the stage when it's strategically best to get those venture the corporate ventures in the company may be not at the seed financing or a Series A but may be the round before you gonna exit your company, but that depends on the company and the company strategy.
IPO market
Fintan Walton:
Coming to the IPO market which is another exit for companies like yours or firms like yours the year in exits have been you know in the past has been reasonably good for doing IPOs do you see that a market coming back at all, I mean there has been one or two IPOs Novartis was one of that?
Marco Boorsma:
Yes not sure how long it's gonna take before its back at the times of well five-years ago I think it's already a while back. There is some expectations that on the back of some IT, IPOs then will also be a window again for biotech. I think it's a way to see, but all you know prepare for it like a dual strategy if there is a window be prepared for IPO, but also just stay in the regular pharma M&A track as well.
Fintan Walton:
But in the end then aren't most venture firms, venture capital firms they actually prefer an acquisition?
Marco Boorsma:
Well you have your cash invested on the bank then within an IPO you never know when you can get out at a good price again, but still it's an important exit a mode of exit so certainly no something to forget only the opportunity needs to be there.
Fintan Walton:
But some of your investee companies must be marked out as ones they are never gonna be acquired and potentially only playable to you get out through an IPO, would that be true?
Marco Boorsma:
Not necessarily we are quite always when you start a new deal with another new pharma licensing deal with the pharma party always be aware okay how many deals can I do and still be able to go for a M&A exit for a M&A and not be pretty much locked into only the IPO round, so always keep that in mind I think before you gonna do multiple licensing deals, because otherwise you know you gonna sell all your (indiscernable) or we go to pharma companies and there is no any other choice than IPO.
Deal strategy
Fintan Walton:
One of the things that people talked about several years ago and that hasn't really ever happened in my view is the merger of more biotech companies together, are you seeing that? Have you seen that within your portfolio companies that there is one of the solutions to a problem is to merge one company with another?
Marco Boorsma:
Well yes, the cash rich sale, a cash rich company without assets merging that happens an example I think would be the Transave with Insmed [PharmaDeals ID = 39670]. Insmed is a listed company and Transave for the Phase III ready asset to bring further and that needed further cash to develop further and this is of course a great way to bring the two together and develop the product to the market which is a great potential.
Fintan Walton:
Or a company like Antisoma which is got little cashed would that be a potential vehicle to bring a portfolio company into?
Marco Boorsma:
If we would have something that really fits in that same strategy and there is cash still you could consider that, it's not something we would say immediately yes or no it's opportunity driven.
Fintan Walton:
It's life after the deal, because you've got to make sure that the price stays up and it doesn't it goes north rather than south?
Marco Boorsma:
And it's well it's listed so if you once you are listed also for a French capital company you the control is of course more difficult, because it's just public you are not on the like for private companies you are on the board and you can more easily steer and help the company than I think when it's listed.
Marco Boorsma's perspective on future of biotech sector
Fintan Walton:
So what's your view currently, I mean looking going forward for industry as somebody who is investing in our biotech sector what's your view, is it optimistic cautiously optimistic or do you think of negative?
Marco Boorsma:
Speaking from an investor like a selling company is well great example is for BioVex for good companies good accessories there is always a buyer I believe, I strongly believe that we sold PanGenetics the antibody to last year for (indiscernable) was also one of our portfolio company. So when the company is good the assets are good I am sure there is a buyer, for new companies raising money I am sure and you hear it here it's more and more difficult to get money and simply because there is not as much money in the market anymore. On the other hand of course you get corporate VC's now coming up and some VC's are able to close funds so it will continue, but it will be good actually to get some more money and well you could even say more competition even for VC's that you can easily syndicate again and you know and you have to come miles again in europe.
Fintan Walton:
And do you think that will happen, do you think that will happen?
Marco Boorsma:
I am a positive guy and I always look at the bright side, but it's gonna take years I am sure, it's gonna take a while.
Fintan Walton:
Thank you Marco, for giving us an insight into the world of venture capital. Thank you for coming on the show.
Marco Boorsma:
Thank you very much for your invite, it's great.
Fintan Walton
Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Marco Boorsma
Senior Analyst
Marco Boorsma , is Principal at Forbion and joined the team in 2007 as Analyst. Before joining Forbion Marco Boorsma was Business Development Director at DSM Pharmaceutical Products, responsible for out-licensing of biomanufacturing technology and securing and managing contract manufacturing projects. Prior to that Marco Boorsma was project manager and scientist responsible for process development and cGMP manufacturing of biopharmaceuticals. While at Cytos Biotechnology (Switzerland) Marco Boorsma developed several cell lines and processes for high-value biosimilar proteins. At Forbion Marco Boorsma is responsible for the investment process from scouting and analyzing new opportunities to the investment itself. He also provides market and trend analyses supporting Forbion 's business strategy. Marco Boorsma is Observer to the Board of Cardoz AB and Exosome Diagnostics. After obtaining a master's degree in molecular biology from the University of Groningen, he received his PhD in biotechnology from the ETH Institute for Technology in Zurich, Switzerland for his work on virus-based gene expression systems. Marco executed his work in the groups of Prof. James Bailey and Prof. Ari Helenius at the ETH, and at the Laboratory of Molecular Biology of the Medical Research Counsel in Cambridge, UK.
PharmaVentures
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialisation.
Forbion Capital Partners
Forbion Capital Partners invest in Life Sciences and Biomedical Technology companies developing world-class drugs and technologies, with a clear focus on product development. The Forbion team is specialized in the evaluation of late stage preclinical / early stage clinical development programs and focuses on companies that have innovative technologies and drug development programs with unique advantages over current treatments. Furthermore, Forbion invest in medical device companies with a focus on interventional cardiology and gastroenterology. The Forbion team began operating in 2000 as ABN AMRO Capital Life Sciences, the venture arm of ABN AMRO Bank NV. In December 2006 the group broadened its investor base, became independent, and changed its name to Forbion Capital Partners . Throughout this time the Forbion team made new investments and has successfully divested from a series of companies. Current assets under management exceed EUR 350M, split between three active funds and comprising some 24 promising portfolio companies. Forbion co-manages BioGeneration Ventures, an early stage-stage fund focused on academic spin-outs and seed investments in the Netherlands. Forbion Capital Partners has offices in Naarden, The Netherlands, and Munich, Germany.