This proposed $75 million private equity partnership (the “Partnership”) intends to build a diversified investment portfolio by commercializing university-developed IP related to medical devices, diagnostics and related technologies. The Partnership intends to accomplish this by forming operating teams that will create a series of startup companies around the IP, which will be actively managed and developed into successful businesses. The Partnership estimates that it will create approximately 12 to 18 startup companies with initial investments ranging from approximately $0.5 to $1.5 million and additional follow-on investments of potentially $3 million to $5 million per company. Between years five and ten, the Partnership intends to monetize this portfolio of startup companies through IPOs, private sales of the companies, or asset sales of the underlying technology.
U.S. universities are the largest performers of basic research in the United States, conducting approximately $68 billion of annual research and development each year. However, that $68 billion yields only about 600 new startup companies per year. A great deal of promising university research consistently fails to be developed and commercialized and only a small portion of new IP with commercial applications result in the formation of new companies.
There are two key reasons for the lack of university based startups: (i) a shortage of seed capital, due to the fact that venture capital funds have generally exited from this early-stage market segment, and (ii) the relative absence of applicable business skill sets at universities. In response, a $75 million private equity partnership (“Partnership”) to solve this problem and take advantage of this opportunity by filling the funding gap for early stage capital and by providing the business skills and management that university-based startup companies need to succeed.
The Partnership is being organized by a medtech-specific investment team with significant U.S. university medtech commercialization, company-building and Wall Street experience. A group of professionals has been assembled with the diversified skill sets necessary to execute the business plan to commercialize early-stage, university-based IP in the medical device, diagnostic and related technologies space. The Principals have:
• Long-standing relationships with U.S. universities. In 2012, the principals’ Innovation Cluster schools expended over $13 billion in Science and Engineering R&D and were awarded over 1,000 patents.
• Invested over $50 million in translational research grants to U.S. universities in over 250 separate IP assets, all in the medical device arena. This capital resulted in an additional $1 billion of follow-on capital from angels, venture capital firms, institutional investors, and strategic investors and generated a success rate of over 27%;
• Responsibility for all operational aspects of commercializing a large portfolio of early stage medical device technologies by overseeing a $20 million endowment that will be used to de-risk and commercialize future medical device technologies, included in this is all program management aspects of a portfolio of over 40 early medical device technologies on behalf of one of the University Cluster schools.
• Successfully started, managed, and sold multiple medical device companies;
• Been responsible for sourcing investment opportunities as part of IBM’s Venture Capital Group, which resulted in over $1.5 billion of acquisitions;
• Served on various boards and panels in medical device industry including:
o The Executive Committee for the PPDC, which is a joint program between Children’s Hospital of Philadelphia, Drexel University and the University of Pennsylvania that supports practical medical device projects benefitting children.
o As program manager for the Drexel University – Hebrew University joint translational research program to tackle unmet needs in healthcare.
o The Biomedical Engineering – Medical Devices Panel for Small Business Technology Transfer (STTR) program, a program to stimulate technological innovation in the private sector.
The Partnership also has an Advisory Board of 13 professionals with extensive business, financial, legal, and entrepreneurial expertise including experience in the health care and medical device sectors with impressive technical, medical device, and patent expertise.
The Partnership offers an investor the opportunity to make impact investments through the commercialization of potentially breakthrough medical device IP, with the hope of improving patient care and well being, while at the same time generating high investor returns.
The Partnership has more detailed offering material available. The Principals are also available to meet or a have call to discuss the Partnership in greater detail.
International IP Enterprises
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