Sector: Biopharmaceutical Supply Chain
Investment Date: 2007
Description: Biomarker Discovery Services
Status: Acquired by a Financial Sponsor in 2012
Headquarters: Montréal, Quebec
Facing the need for cash in 2007 to fund its drug development business, Thallion was open to Great Point Partner’s overture to divest its biomarker services subsidiary. “Caprion was not directly related to Thallion’s core strategy,” Martin LeBlanc, co-founder and CEO of Caprion recalls. “We saw the divestiture as an opportunity to access the appropriate growth capital to execute our strategic vision of adding to our market share and leadership position in a rapidly advancing and large market for biomarkers. The newly recapitalized company became well positioned to execute on its mission – delivering differentiated, high value biomarker services to pharmaceutical and biotech companies. The return-on-investment for these services can exceed 3,000%.”
Pharmaceutical and biotechnology companies face continuing upward pressure on the cost of developing a new drug driven by more extensive FDA requirements for pre-clinical studies and clinical data regarding target and off-target drug effects prior to approval. There is a need for technology-enabled services, such as Caprion’s biomarker analytics, that can help develop safer, more efficacious drugs and better identify which patients will most likely respond to a drug. LeBlanc saw in Great Point a capital partner capable of completing a complicated cross-border divestiture, funding future growth, and leading the negotiation of tuck-in acquisitions. “We knew from the moment we met the professionals at Great Point that they had more industry knowledge and a longer term vision for building our business than the individuals at other private equity firms.”
How Great Point Partners Helped
We invested equity in Caprion in 2007 and helped arrange for a more flexible and larger debt facility. In 2008, Great Point Partners introduced Caprion to Covance, an international CRO, and helped to negotiate a minority investment as well as a strategic marketing and distribution alliance. In late 2009, Caprion acquired PPD’s proteomics-based biomarker services division. Great Point also introduced Caprion to new customers at the annual life sciences offsite held for the CEOs of the investments made by BMVF, the GPP public equity fund.
Caprion grew its biomarker services revenue over 70% per year from 2007 through 2011. In mid-2012, Great Point Partners and Caprion’s management team collectively decided to sell the business for a very healthy return for all shareholders. Caprion continues to be a cutting edge leader in the proteomics services industry serving customers around the world. Martin LeBlanc has continued his affiliation with Great Point Partners by serving as a member of our CEO Advisory Board, as a Board member of Softbox Systems, a GPP II portfolio company, and as a former Board member of Cytovance Biologics in GPP I.