Investment Approach

GBS seeks to lead investments in life science companies which have, or can develop, the following attributes:

• a significant Australian presence with assets, employees or activities in Australia
• world-leading technology with comprehensive patent protection based on excellent science and with the potential for multiple applications
• an experienced management team, or an entrepreneur who will form the nucleus of the management team
• significant international market opportunities
• a business with a coherent commercialisation plan, rather than a stand-alone project
• potential for a high return on investment, and an identifiable exit mechanism, such as a public flotation or trade sale

Particular areas of interest include therapeutic or device opportunities from product focused companies at or near the clinic. We seek to understand the medical need, regulatory challenges and path to registration and reimbursement for new technologies. We are expert at balancing the clinical and regulatory advantages of Australia with major market engagement. GBS has a proven track record of syndicating investments with leading US venture firms when the financing or market opportunities warrant.

We are not afraid to roll up our sleeves, actively engaging with entrepreneurs and management to work through technical details, development plans, IP and regulatory strategies and chart a financing path to success.

GBS provides funding from the early stages of company initiation and technology proof of concept through to later stage investments in companies approaching the final stages of product approval or market launch. We specialize in incubating ideas—working with inventors to capture ideas and transform them into viable start-up ventures.

When considering companies developing new medicines, the opportunities we seek are ‘best in class’ or transforming therapies either in or close to the clinic, with a known mechanism of action and a defined path to registration. An understanding of how prescribers and payers view the chosen indication is critical, particularly in diseases where there are many approved or pipeline drugs.  Diligence sometimes leads us to suggest change in clinical indication. We seek to ensure that the financing strategy is aligned with key development and commercial risks, such as IND filing, phase I completion and phase II efficacy trials.

When evaluating medical device opportunities, we prefer technologies that have advanced beyond purely concept, have no insurmountable engineering challenges ahead and with data in animal models known to correlate with outcomes in man. Consideration must be given to the regulatory path (510K vs PMA), competing device and non-device approaches to the problem being solved, and whether there are existing reimbursement codes. We believe that Australia’s favourable regulatory environment and world class clinicians offer a cost effective means to establish clinical proof of concept with innovative devices.

Typically, GBS invests in a syndicate with other investors, with the expectation of further funding if the venture is successful.
GBS investee companies have consistently raised significant funds from international venture syndicates and NASDAQ and ASX capital markets to develop valuable biotech products. Examples include:

• Celladon: US$200 m+ during seed, venture, NASDAQ IPO and public market rounds.
• Peplin: AU$100 m+ during seed, venture, ASX IPO and PIPE rounds.
• Pharmaxis: AU$200 m+ during seed, Series A, ASX and NASDAQ IPO and public market rounds.
• Spinifex: US$8 0m+ during seed, AU Series A and B and US Series C rounds.

Venture capital investment takes time - anything from two to twelve months from first contact to the close of the first financing – and we commit to providing clear feedback to entrepreneurs as we evaluate each new opportunity

Typically, the investment process follows these stages:

First contact. Many of the investment proposals we receive are first introduced by academic or industry leaders, mutual contacts, service providers or through the GBS network. After a telephone discussion of the investment opportunity, we like to see a focused summary presentation which outlines the potential of the technology, the people involved, the market and business opportunity and the investment required.

Presentation and meetings. A formal presentation to introduce the company, team and investment opportunity is a key part of assessing if there is a ‘fit’ with GBS.  

Technical information package and review. The company should have a detailed technical package available for review with all relevant information regarding the technology and patents assembled in logical fashion, suitable for independent review.

Business review. GBS, with the support of its network, reviews the commercial opportunity and business model.

Investor syndicate. GBS typically seeks to syndicate the investment, bringing in other investors to spread finance risk, deepen the available pool of investment capital and add to the pool of expertise.

Term sheet. GBS or the investment syndicate will issue a term sheet for the company to sign. This will include valuation of the company, milestones and ownership of the company after the investment. Usually, following financing, the company is owned by investors and company founders, with share options for the management team and employees.

Detailed due diligence. GBS conducts a full review of accounts, patents, legal documents and personnel.

Investment decision. GBS or the investment syndicate make the decision to invest, perhaps with some adjustments to the terms that reflect issues raised during due diligence.

Documentation and approvals. Once the decision to invest is made and terms of the investment are finalised, the boards or investment committees of all investors in the syndicate must approve the investment and appropriate documentation must be developed and signed.

After investment, GBS Venture Partners takes an active role in assisting the management teams of portfolio companies. This usually involves holding a board seat and actively participating in the company's strategic, operational and financial planning. GBS acts as mentor to advise the senior executives of portfolio companies in:

• corporate strategy
• senior management recruitment
• board composition
• intellectual property strategy and protection
• financial planning and fundraising
• banking, legal, accounting and other professional relationships
• introductions to potential corporate partners
• third-party collaborations and negotiations
• merger and acquisition strategies and negotiations
• implementation of liquidity strategies