Venture Philanthropy Deal-Making: How and Why Foundations Fund Biopharma A FasterCures Webinar March 12, 2015
Margaret Anderson
Executive Director, FasterCures MODERATOR
FasterCures is an “action tank” driven by a singular goal – to save lives by speeding up and improving the medical research system. A center of the Milken Institute, we are a nonprofit and nonpartisan organization that works with all the sectors of the medical research and development ecosystem.
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Purpose • Real-time sharing of ideas, best practices, trends, and lessons learned • Amplifies meaningful solutions, productive tools, and encourages action needed to spur medical progress
2015 topics • R&D policy • Science of patient input • Venture philanthropy
Nearly 600 registrants from: Law Other 9% 2% Government 3% Finance 3% Academia 10%
Healthcare/ Science 24%
Nonprofit 49%
The Research Acceleration and Innovation Network
train.fastercures.org
Examples of venture philanthropy resources • • •
The Importance of an Interruption License Everything You Ever Wanted to Know About Venture Philanthropy Transactions but Were Afraid to Ask Everything You Ever Wanted to Know about Royalties and Their Monetization but Were Afraid to Ask
What is venture philanthropy?
Venture philanthropy in the news
Speakers
Kenneth Schaner Partner, Schaner & Lubitz, PLLC
Louis DeGenarro President and CEO, Leukemia & Lymphoma Society
Anthony Coyle Senior VP and Chief Scientific Officer, Centers for Therapeutic Innovation, Pfizer Inc.
Margaret Anderson Executive Director, FasterCures MODERATOR
Kenneth Schaner
Partner, Schaner & Lubitz, PLLC
Venture Philanthropy Structure By Kenneth I. Schaner, Esq. Schaner & Lubitz, PLLC www.schanerlaw.com
What is Venture Philanthropy? • • • • • •
Prior to late 1990s, applied to the academic community Cystic Fibrosis Foundation – Aurora Biosciences Common Elements of Venture Philanthropy Return on Investment structures Tax implications Accounting rules and fundraising ratios
History of Venture Philanthropy • Prior to late 1990s, academic grants • 1998 Cystic Fibrosis Foundation investment for $3M – Aurora Biosciences • 2002 supplemental award – royalties based on Net Sales • In 2002, Aurora Biosciences merges with Vertex • Continuing supplemental investments • 2013 and 2014 royalty monetization
Other Charities • • • •
Other charities are engaging in venture philanthropy Transaction sizes range anywhere from $200K to $150M Co-funding High risk of failure
Deal Structure • • • • •
Award is consistent with charitable purpose Definition of “Field” Royalty Cap Disposition Transactions Interruption License
Conclusion If you have further questions, please contact me at: Kenneth I. Schaner, Esq. Schaner & Lubitz, PLLC
[email protected] 240.482.2848
Louis DeGennaro
President and CEO, Leukemia & Lymphoma Society
Anthony Coyle
Senior Vice President and Chief Scientific Officer, Centers for Therapeutic Innovation, Pfizer Inc.
Landscape Is Evolving from a Disparate Group of Individual Players…
Healthcare Systems
Venture Capital
Payers
Academic Centers
Biotech & Pharma Healthcare Technology
Patient Groups
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…To a Holistic Ecosystem Fueled by Collaboration Healthcare Technology Patient Groups
Healthcare Systems
Academic Centers
Payers
Venture Capital
Biotech & Pharma
Q&A
Kenneth Schaner Partner, Schaner & Lubitz, PLLC
Louis DeGenarro President and CEO, Leukemia & Lymphoma Society
Anthony Coyle Senior VP and Chief Scientific Officer, Centers for Therapeutic Innovation, Pfizer Inc.
Margaret Anderson Executive Director, FasterCures MODERATOR
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