Sarsia Innovation AS

Sarsia Innovation asThe ‘Bergen Model’ for commercialisation spans the process from identification of a

promising research project on to company growth and international expansion.

Brussels, 11 September 2006

Hans Hekland CEO ”

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How is it done at University of Bergen?

• Sarsia Innovation

– Who is behind and why?

– Track record

• The early-stage gap

– Commercialisation chain

– What's missing an why?

• The development of the Bergen model commercialisation

– Sarsia faces the early-stage gap

– The ideal model ?

– The different players and their interface

– Different shareholders for different phase and corporate government

– Synergies

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Sarsia Innovation as

Industrial Development Corporation of Norway

Institutional investors

Sarsia was established in 2001 on the initiative of :

Bergen High-technology

Centre

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Sarsia Innovation AS shall invest in research-based projects, and develop them into businesses of quality and size interesting for venture capital and industry investors.

Sarsia Innovation – track record

155 Commercialisation projects

23 Start-ups

3 Trade sales

5 VC stage financing rounds

1 IPO

Established ;Sarsia Life Science Fund (M€ 45)

Sarsia Seed Fund (M€ 45)

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University “spin-outs” faces the early-stage gap

new company growth stageseed stageproject

Technology Transfer Office Venture Capital

Business support and investment capital is provided by different commercialisation outfits all focusing at a specific stage of company development.

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Why gap?

The venture capitalist looks for ;

Superior returns

– Break through technologies

– Crisp value proposition

– Experienced Management

– Clear exit options

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Superior returns ?

IRR (Thomson Venture Economics 12 Oct.2004)

– European VC-fund:–Average 7,2%

–Upper half 13,8%

–Upper quarter 19,7%

– European Buy-out fond:–Average 12,2%

–Upper half 22,2%

–Upper quarter 30,2%

European early stage return; (EVCA 2003)

–10yrs = 1,3%

–5yrs = -11,8%

0

50

100

150

200

250

300

Seed Seed VC VC

Later stage; less risky, less work,quick exit

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University “spin-outs” often fails on

Business concept /value proposition

Lack of management resources (int. network)

Unclear funding needs and milestones

Unclear exit (few options)

Inventors unrealistic expectations of value.

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Sarsia Innovation faces the early-stage gap

new company growth stageseed stageproject

Sarsia Innovation Venture Capital

Capital Squeeze

Incubator

De-merger of VC investment

Out source Seed

investment

2005

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‘Bergen Model’ for commercialisation

new company growth stageseed stageproject

BTOSarsia Seed

FundSarsia Life

Science Fund

close cooperation

Sarsia Innovation as a facilitator for innovation

- independent decisions -A linkage point and facilitator in this process.

Investment decisions for the different phases are taken strictly independently.

Information flows freely to allow for smooth cooperation and company development.

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Sarsia Innovation as - a facilitator for innovation

Sarsia Innovation as - a regional innovation network coordinator, which shall support and develop the innovative environment in the region.

Sarsia Innovation shall actively support regional initiatives for:

Incubator participant

Capital

infrastructure

Incubator,

Administrativesupport

Network

Strategy development

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Specialized Network – Life Sciences

Different country strengths

• Norway

– Functional foods, diagnostics, med-tech, bio-marine

– Cancer registry, large cancer hospitals, access to clinical materials

• Sweden

– Pharma, diagnostics, med-tech

– Biotech innovation focus

– Life science private equity players

• Denmark

– Pharma and med-tech

– Several consolidating biotech clusters

• Finland

– Med tech, functional foods

– Innovation culture

– Strong sector growth

Helsinki-Turku

Blå grønn allianse

Medcoast Scandinavia

Medicon Valley

Stockholm-Uppsala

Bioteam south

Network partner

SLSF office

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BTO shall coordinate the commercialization process, manage the projects and IPR and assist in the development towards “Proof of Concept” on behalf of the researcher and the research institutions .

BTO is a non-profit company owned by The University of Bergen, Institute of Marine Research and Bergen University Hospital.

Further more : – Promote commercial utilization of research

– Assist in attracting funding for further research and development

5 -> 8 Advisors

Funded by Norwegian Research Council and the owners

TTO deal-flow

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Sarsia Seed Fund

Sector focusThe seed fund was established in 2006 with €45 million to invest in Norwegian early phase technology companies in the energy and biotechnology fields.

Fund structure30 to 40 seed companies between 2006 and 2013.Initially 0.5-1 MNOK and then up to 4 MNOK in progress-dependent instalments until divestment.

5 to 8 companies to become success stories.

InvestorsThe fund is backed by regional and national private investors, and the Norwegian government.

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Sarsia Life Science Fund as

Sector focusThe venture fund was established in 2006 with €45 million to invest in companies in the Nordic region. The fund has a pure life sciences/ biotechnology focus:

- Diagnostics- Medical technology - Nutraceuticals - (Pharmaceuticals):

Fund structure10 to 15 venture companies before 2010, further 4-6 years in which follow-up investment

In each company, we look to invest 8-40 MNOK in instalments

The fund is backed by private investors

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Capital, Shareholders and Management

Sarsia Life Science Fund as

Sarsia Seed Fund as

SarsiaVenture Management as

Sarsia Seed Management as

Sarsia Innovation as

Institutional investors

Private investors (75%)Public investors (25%)

Private / Public- partnership (50/50)

12%

Bergen Teknologi OverføringTTO

UiB IMR HB

projects

Public funding

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Seed Fund structure and network…

Industrial/academic

advisory board

Dedicated management

FUNDcapitalM€45

Fund BoardInvestment & exit decisions

Portfolio companies

Joint networkand deal-flow

Support

Joint back office

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How is it done at University of Bergen

• Sarsia Innovation

– Who is behind and why?

– Track record

• The early-stage gap

– Commercialisation chain

– What's missing an why?

• The development of the Bergen model commercialisation

– Sarsia faces the early-stage gap

– The ideal model ?

– The different players and their interface

– Different shareholders for different phase and corporate government

– Synergies