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Biotech Turnaround Fund (BTF) B.V.

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Biotech Turnaround Fund (BTF) B.V.

Overview:

Biotechnology has difficulties living up to its potential commercially, because its business model is stretched:
excellent research results have a hard time proving themselves through development in a clinical setting;
clinical trials -including preparations, approvals and analyses- take (much) longer than envisioned;
increasingly burdensome regulatory procedures and pricing pressure on drugs decrease margins;
periodic financing needs make biotech companies vulnerable and disproportionately hard hit by the financial crisis (‘back against the wall');
Big Pharma's patent cliff and many internal programs failing, have made pharma companies very risk-averse;
more development- and even registration risk is put on biotech shoulders;
the ultra competitive nature of science and its patent positions have increased registration risk.

The promise of high quality basic science has difficulty translating into successful drugs within a commercially viable time frame. Intrinsic and strategic value in the biotech industry is often not reflected in market capitalization in both public and private equity markets. The value creation stage for biotech has become a moving target.

Big drug companies have continued to merge and chase perceived merits of gigantism, huddling around a limited number of therapeutic categories. These mergers continue to lead to capital destruction and much uncertainty (risk) for biotech.

It's hard enough for biotech to successfully transition from science into a product-oriented company. Moving into large Phase III clinical registration trials, let alone surfing through the tough registration process, may well prove a bridge too far for many biotech companies.

Late-stage focus has moved from an average holding period of three to five years, to six to eight years or even longer. There are no short cuts in biotech and no margins for error in a very dynamic and rapidly changing industry.

Executive Summary

Biotech Turnaround Fund (BTF) B.V. is a cross-over, turnaround venture capital operating company, which built a portfolio of six diversified biotechnology companies. These companies guided several drug candidates and medical products through advanced clinical trials.

BTF invested in both private and public biotech companies (cross-over) of North American and European origin. These companies were on the forefront of breakthrough research and several made a successful transition from research into drug development, and even product registration.

BTF targeted a few companies that steadily built on cutting edge research, focused on human drug development and with multiple products in their pipeline. With its management team and senior advisors highly committed, BTF managed its portfolio of companies increasingly hands-on. On several occasions, management team members have taken on executive responsibilities and continue to advise these portfolio companies as Board of Director members towards an orderly and fair winding down.

History:

Biotechnology Turnaround Fund (BTF) was founded in 2000 and raised EUR 75 million from Dutch institutional investors and family offices. Its term ends July 1, 2010, when its biotech investments have been sold or distributed to BTF shareholders.

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