Why Animal Health?: A $60bn industry with strong growth fundamentals
Animal Health is a growing industry, expected to reach $78bn by 2021 (CAGR of 5.4%). The industry has withstood recent economic downturns, is driven by high profit margins, has a more favourable R&D cycle compared to human health and long product life cycles.
Drivers in the companion animal sector include growing pet ownership (about 70% of US households have a pet), improving standards of care and the digitization of health.
The production animal sector is largely driven by increasing protein demand, safer antibiotic-free foods and digitization increasing productivity for the farmer.
Why Are We Needed?: There is no other dedicated, animal health group committed to creating new companies de novo from disruptive human technology
The animal health industry is changing. Innovations are needed to cope with the most pressing changes, such as the reduction of antibiotics in farm animals, and the “humanization” of companion
A Pfizer, Sanofi, Novartis, J&J all divested their respective Animal health Divisions. Those companies together spent $30.7bn on Human Pharma R&D in 2015
Source: Vetnosis, team analysis / Company Annual Reports / PWC Strategy Playbook, 2015 / Team Analysis
We understand that biotech, pharma, data and devices companies with disruptive human technologies and applications focus their efforts on the much larger human health sector. This means that many strong technologies never reach the animal health market.
We help these human health focused companies to establish an animal health NewCo and take care of the day to day running of NewCo, including staffing of the board and management team, business development, financing etc. This minimizes dilution of focus and resources, but allows value to be created on the animal side.
How we start up a new company: Every opportunity is different, but we follow a common process
We source opportunities, conduct initial diligence, then move to a more formal process of evaluation under a memorandum of understanding (MOU).
We assist with everything, from due-diligence and strategy, to implementation of seed funding. We help build a dedicated management team from our extensive network and advise the business through its evolution on further funding, business development, partnering and ultimately an exit.
In return, we seek a portion of the equity in each animal health NewCo created. This model allows the management of the human health “mother” company to continue to focus its efforts on the larger human opportunity and avoids dilution of time, resources or equity in the original company. It also aligns incentives as both parties benefit from successfully realizing value with the animal health NewCo.