Download Health Venture Fund Investment August 2009

Quaker BioVentures Tobacco Fund
Update for the Tobacco Settlement Investment Board:
Health Venture Fund Investment
August 2009
Quaker BioVentures Tobacco Fund Portfolio
Confidential
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Quaker BioVentures Fund Updates
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QBV I Funds
– $280 million in capital of which QBV Tobacco Fund is $30.6M
– All funds are fully invested, committed, and reserved for follow-on investments
in 24 portfolio companies
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QBV Tobacco Fund
– Total fund of $30.6M has been fully invested, committed, and reserved in 18
portfolio companies
– Health Venture Fund is $20M of the total fund
– QBV Tobacco Fund has called 89% of the fund as of 7/31/2009
– 2 follow-on investments since last update to TSIB
– Total of $6.0M has been returned to the Endowment Fund (22% of called
capital)
Confidential
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Quaker BioVentures’ Impact on Pennsylvania
Number of Pennsylvania Companies:
18*
Number of PA Employees:
438**
Total Amount Invested and Committed by
Quaker BioVentures Tobacco Fund:
$21.3 million
Total Amount Invested and Committed
by Quaker BioVentures Funds (Non-Tobacco):
$114.5 million
Total Amount Invested by Other VC Firms:
$524.1 million
Total Quaker BioVentures Impact:
$659.9 million
Total Leverage: Total Non-Tobacco to Tobacco :
30 : 1
*Includes 2 exited investments in the TSIB Portfolio (Medmark and BioRexis) and 2 exited investments (Cellatope
and Protez) in the BioAdvance Ventures portfolio, of which TSIB is a limited partner
**Includes current employees of active investments as well as employees of exited investments at time of exit
Confidential
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Follow-on Investments Since Last Meeting
Company
Confidential
Co-Investors
Round
Total Quaker
Investment
TSIB Investment
SR One, Bay City
Convertible Bridge Note
$0.066M
$0.010M
Carlyle Group,
Hillman Company
Convertible Bridge Note
$0.150M
$0.025M
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Active Quaker Tobacco Fund Portfolio
Portfolio Company
Confidential
Company Description
Initial
Company
Investment
Stage
Date
TSIB
Investment
Health
Venture
Portion
Novel drug targeting system for insulin for
the improved treatment of diabetes
Phase II
Apr 2006
$0.13M
$0.09M
Targeting serotonin receptors to initiate
apoptosis to treat multiple myeloma,
psoriasis and asthma
Phase I
Mar 2005
$0.62M
$0.41M
Advanced virotherapy for killing tumors
Phase II
Nov 2004
$1.6M
$1.1M
Transcranial magnetic stimulation (TMS)
for the treatment of major depression
Revenue
Generating
Aug 2006
$1.4M
$0.93M
Topical application of gaseous nitric oxide
for dermatological conditions
Phase II
Mar 2006
$0.80M
$0.53M
Transdermal delivery of sumatriptan to
treat migraine
Phase III
Sep 2006
$0.5M
$0.33M
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Active Quaker Tobacco Fund Portfolio
Portfolio Company
Company Description
Health
Venture
Portion
Decision support tools and services that
assist physicians in treating cancer
patients
Revenue
Generating
Feb 2006
$2.6M
$1.73M
Sophisticated pharmaceutical marketing
database and analysis
Revenue
Generating
Apr 2005
$1.2M
$0.8M
Phase II
June 2006
$2.0M
$1.33M
Preclinical
June 2006
$0.54M
$0.36M
Phase II
Oct 2004
$2.1M
$1.4M
Developing new human tissues and organs
that are derived from a patient's own cells
Drugs that unblock the cell death or
apoptosis pathway, resulting in the death
of tumor cells
Ionotophoretic drug delivery for
dermatology
Confidential
Initial
Company
TSIB
Investment
Stage
Investment
Date
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Selected Highlights from the Quaker
Tobacco Fund Portfolio
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Diasome
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Discovery Laboratories
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–
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The company completed preliminary IND-enabling toxicology studies in rats, which indicated a clean compound with
potential for a broad therapeutic index.
The asthma compound demonstrated oral efficacy in a murine model and potent activity in a human lung slice model.
In the psoriasis trial, nine of the fifteen patients were treated.
Neotropix
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At the June 2nd FDA meeting, Discovery Laboratories learned that the FDA would now apply a newly-defined standard to
determine comparability of Surfaxin clinical to commercial drug product.
As a consequence of this decision, the agency declined to approve Surfaxin in the prevention of Respiratory Distress
Syndrome (RDS) in premature infants.
The company subsequently announced that it will focus on maximizing the value of its novel KL4 surfactant and
aerosolization platforms.
Quaker sold all of its shares in Discovery Laboratories in July 2009.
Immune Control
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At the end of the second quarter, 230 patients were enrolled in the Phase 2b study of oral HDV-insulin; 40 centers enrolled
patients.
The study’s Last Patient In (LPI) was enrolled on May 29, 2009; top line data are expected in October 2009.
Efforts continued with the Phase 2 Small Cell Lung Cancer trial. The trial protocol was completed and submitted to the
FDA.
The Cancer Therapy Evaluation Program (CTEP) agreed to fund a Phase 2 trial in Pediatrics. The protocol was submitted
to the FDA, and the trial was cleared to begin enrollment.
Neuronetics
–
–
Confidential
Commercialization efforts proceeded ahead of plan. Sales of both TMS systems and disposables exceeded forecast.
The company is raising a $30M Series D financing, of which the current investors will invest $15M and the new investor
will invest $15M.
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Selected Highlights from the Quaker
Tobacco Fund Portfolio
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Nitric Bio
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NuPathe
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Strong growth in assay sales continued and the company was on budget for net revenue recognized through 2Q 2009.
Both specs received and specs billed year to date exceeded plan.
Ongoing clinical trials continued to accrue patients.
TargetRx
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NuPathe’s Phase 3 trial of NP101 to treat acute migraine continued according to plan.
The company completed its preclinical trial with NP201 in monkeys at Rush Hospital in Chicago. The data demonstrated
that NP201 managed the primates’ Parkinsonian symptoms and that the implants delivered robust drug levels without
burst effects.
Precision Therapeutics
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A Phase 2 dose ranging study commenced enrollment in the Caribbean and Canada in patients with tinea pedis.
A commercial assessment of the tinea pedis opportunity was completed, including in-depth interviews with 10 podiatrists,
a reimbursement study, and secondary research on the podiatry specialty.
TargetRx ended the quarter 25% ahead of 2008 in terms of revenue bookings year-to-date and was on plan for 2009.
The cost saving measures instituted by the company earlier in the year continued to have a favorable impact. The
EBITDA loss was $790K less than budgeted.
Tengion
–
–
Confidential
The two serious adverse events were investigated thoroughly by the company, and a report was provided to the FDA; the
two patients recovered, and their bladders were functioning. The events appeared to be related to procedure, rather than
to the product per se.
Work was begun towards acceptance of an IND for the urine conduit in the fourth quarter.
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Selected Highlights from the Quaker
Tobacco Fund Portfolio
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TetraLogic
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Transport Pharmaceuticals
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The company developed a plan to expedite its IND filing with the FDA in order to begin human studies of its Smac mimetic
in Q4 2009.
Transport met with both strategic partners and venture capitalists in pursuit of a partnership for the cold sore product and a
financing of the company. Several strategic partners continued to conduct extensive due diligence on the company.
As part of continued cost saving measures, approximately 50% of the remaining employees were terminated.
YM Biosciences
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–
–
Confidential
YMI reported results from a randomized trial of nimotuzumab in patients with inoperable, locoregionally advanced Stage
III/IVa head and neck cancer. Data indicate that nimotuzumab compares favorably to results reported for cetuximab.
The company reported that its Japanese licensee for nimotuzumab, Daiichi-Sankyo Co., Ltd., commenced enrollment of a
Phase II trial evaluating nimotuzumab in combination with radiation therapy/cisplatin/vinorelbine in first-line curative intent
patients with Stage III non-small-cell lung cancer (NSCLC).
Quaker sold all of its shares in YM Biosciences in July 2009.
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Quaker BioVentures Summary
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Established as a leading life science VC firm
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Accelerating regional growth
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$3.86 in syndicate capital for every $1.00 invested by Quaker
and investing $30.00 in aggregate capital for every $1.00
invested by TSIB
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Portfolio well diversified by therapeutic area, stage of
development, and sector
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Quaker BioVentures Tobacco Fund, L.P. is fully invested,
committed, and reserved
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Final close in May 2008 of $420M for Quaker BioVentures, II,
of which the Endowment Fund is a $20M Limited Partner
Confidential
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