Commercialising Nanotechnology Paul Atherton 2006 Nanotechnology not a

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Commercialising Nanotechnology © Paul Atherton 2006

Commercialising Nanotechnology © Paul Atherton 2006

Nanotechnology • not a useful description of technology – many different nanotechnologies • not

Nanotechnology • not a useful description of technology – many different nanotechnologies • not a useful description of markets or applications • principal use is for Funding agencies – UK, US, EU and VC – Beware re-labelling of existing activities © Paul Atherton 2006

Types of Nanotechnology • Top down - Engineering Nanotechnology – miniaturisation of macroscopic devices

Types of Nanotechnology • Top down - Engineering Nanotechnology – miniaturisation of macroscopic devices – Micro Systems Technology (MST) – ink jet printers, disk drive heads, air bag sensors, Pentium chips – Tools: wafer steppers, SPM, SEM, Nanomanipulators • Bottom Up – Molecular Nanotechnology – atom by atom, molecule by molecule • Drexler’s Molecular machines – – Chemistry – nanoparticles, fullerenes Physics – quantum dots Biology – was always nanotechnology Quantum effects become important at the nanoscale • Top Down is probably nearer market than Bottom Up © Paul Atherton 2006

Engineering Nanotech Commercialisation • MST – Micro Systems Technology – Pressure sensors - tyres,

Engineering Nanotech Commercialisation • MST – Micro Systems Technology – Pressure sensors - tyres, manifolds • Sensonor(Infineon), Colibrys, Bosch – Accelerometers – air bags, inertial guidance • BAE Systems, Analog Devices – Microfluidics/DNA Microarrays – Lab on a chip • Genomics, drug discovery, diagnostics • Affymetrix, Applied Gene Technology $500 M – Optical Switches • Texas Instruments – Digital Light Projector >$900 M • Markets that really exist! – Bosch make >100 M devices per year © Paul Atherton 2006

Nano Tools • Microscopes – SPM – Veeco, Nano. Ink, Infinitesima – SEM –

Nano Tools • Microscopes – SPM – Veeco, Nano. Ink, Infinitesima – SEM – FEI, JEOL, Hitachi etc • • Steppers – ASML, Canon, Nikon Coatings – EVG, Unaxis DRIE – STS, Suss Microtech Nano Manipulators – Zyvex, Klocke, © Paul Atherton 2006

Nanotech Commercialisation • >500 companies globally • 1/3 in Nanoparticles • >55 companies in

Nanotech Commercialisation • >500 companies globally • 1/3 in Nanoparticles • >55 companies in Carbon Nanotubes – Of which >20 in large scale production © Paul Atherton 2006

Nanotech Commercialisation Activity • Fullerenes – Carbon buckyballs – Carbon nanotubes • Single wall

Nanotech Commercialisation Activity • Fullerenes – Carbon buckyballs – Carbon nanotubes • Single wall • Multi wall • Nanoparticles – 5 nm Ti. O 2, Al. Ni, metal shells, caged atoms © Paul Atherton 2006

Fullerenes Carbon Buckyballs and Nanotubes • • • Physical Strength Electrical conductivity Thermal conductivity

Fullerenes Carbon Buckyballs and Nanotubes • • • Physical Strength Electrical conductivity Thermal conductivity Scaffolds - bio-pharma Caged atoms – quantum effects Nanowires © Paul Atherton 2006

Fullerenes – Start ups 1 Volume production • Nanoledge – (France) – Large scale

Fullerenes – Start ups 1 Volume production • Nanoledge – (France) – Large scale production (4 ounce per day) tennis racquets, fibers. • Mitsui CNRI (Akashima, Tokyo) – (new nanotube plant– 120 tons per year at 10% present cost) • Frontier Carbon (Kitakyusyu City) – Mitsubishi – large scale M/F 400 kg per year – 1500 tons by 2007 © Paul Atherton 2006

Fullerenes Start Ups 2 ‘Functionalised’ • Carbon Nanotechnologies – Richard Smalley ($15 M -

Fullerenes Start Ups 2 ‘Functionalised’ • Carbon Nanotechnologies – Richard Smalley ($15 M - angels) – Single walled and functionalised tubes • Nantero (>$20 M – DFJ and others) – NRAM™, a high-density nonvolatile random access memory chip • Molecular Nanosystems – Stanford ($2 M – band of angels) – Nanotube sensors • C Sixty – ($4 M – CNI-angels) – Protease inhibitor – anti HIV – Dec 2004 – merged with CNI © Paul Atherton 2006

Fullerenes Commercialisation • Very broad applications • Entry of large manufacturing companies – Already

Fullerenes Commercialisation • Very broad applications • Entry of large manufacturing companies – Already second movers appearing • Price dropping rapidly • Clear specialisations developing – – market focus Co-development deals No IPOs yet…… NEC and Samsung © Paul Atherton 2006

Nanoparticles • • Catalysts Functional materials and coatings Ceramics Drug Delivery © Paul Atherton

Nanoparticles • • Catalysts Functional materials and coatings Ceramics Drug Delivery © Paul Atherton 2006

Nanoparticles • Nano. Phase Technologies (Nasdaq) • Ntera ($30 M) – was Li-ion batteries

Nanoparticles • Nano. Phase Technologies (Nasdaq) • Ntera ($30 M) – was Li-ion batteries – now nanochromic displays • Nanogram ($6. 7 M) – nanomaterials • Aveka (buy out from 3 M) – particle processing • Oxonica ($4 M) sunscreens, bio tags, catalysts. – Floated on Aim 2005 • Quantum Dot Corp ($37 M) – bio-assays – Acquired by Invitrogen oct 2005 • Nanosphere ($10 million) – Gold nanoparticle DNA probes for bio-threat detection ( anthrax) • Qinetiq nanomaterials • Nanomagnetics – was data storage – now water purification - Apaclara © Paul Atherton 2006

Nanoparticles • Capacity and cost • Scale up issues • Production technology – Plasma

Nanoparticles • Capacity and cost • Scale up issues • Production technology – Plasma vs precipitation • New start ups vs existing players : • Degussa, Cabot Corp, Johnson Matthey • BASF, Altana © Paul Atherton 2006

Nanophase Nanosys and Oxonica • Nanophase – first Nanotech IPO – Over valued •

Nanophase Nanosys and Oxonica • Nanophase – first Nanotech IPO – Over valued • Nanosys – the hyped Nanotech IPO – Over sold • Oxonica – an unexpected IPO – Over diluted © Paul Atherton 2006

Nano. Phase Technologies • • Patents licensed from Argonne – 1990 Zinc oxide nanoparticles

Nano. Phase Technologies • • Patents licensed from Argonne – 1990 Zinc oxide nanoparticles – sunscreens Catalysts Floated on Nasdaq – 1998 Early Nanotech IPO Rode technology wave Look at recent history…… © Paul Atherton 2006

Nanophase • 1998 Over hyped IPO – paid compensation of $4. 8 M (Jan

Nanophase • 1998 Over hyped IPO – paid compensation of $4. 8 M (Jan 2002) • Nov 2001 Layoffs – insufficient demand • Growth, but quite volatile – Customer delays – major customer - sunscreen • 03 Q 1 revenues $1. 66 M 03 Q 2 $1. 3 M • Losing about $1. 3 M per quarter © Paul Atherton 2006

Nano. Phase update • 25/03/2004 • Altana Chemie AG – acquires 7% for $10

Nano. Phase update • 25/03/2004 • Altana Chemie AG – acquires 7% for $10 M – – Speciality chemicals business 2 year lock up 8 year strategic agreement c. f. BASF investment in Oxonica…. • $1. 7 M Revenues for quarter ended Sept 30 2005 • Net loss for quarter - $1. 53 M • Q 1 2006 – Revenue rises to $2 M – net loss $1. 5 M © Paul Atherton 2006

Market Cap $120 M © Paul Atherton 2006

Market Cap $120 M © Paul Atherton 2006

Nanosys • Charles Lieber, Hongkun Park – Harvard Chemistry Nanowires • Paul Alivisatos –

Nanosys • Charles Lieber, Hongkun Park – Harvard Chemistry Nanowires • Paul Alivisatos – – UC Berkeley – nanocrystals, quantum dots • Larry Bock – biotech serial entrepreneur Fundraising : • Oct 2001 - $M 1. 65 • Feb 2002 - $M 15. 5 • June 2003 - $M 39 © Paul Atherton 2006

Nanosys • Bio-sensors – functionalised inorganic semiconductor nanowires – 1 D electron flow highly

Nanosys • Bio-sensors – functionalised inorganic semiconductor nanowires – 1 D electron flow highly sensitive and selective • Photovoltaics – nanocrystals in host matrix – Solar cells as roof tiles (Matsushita contract) • Macroelectronics – flexible low cost substrate • Nanostructured surfaces – Hydrophobic and anti-microbial surfaces © Paul Atherton 2006

Nanosys • Land Grab IP strategy – > 120 patents owned or licensed •

Nanosys • Land Grab IP strategy – > 120 patents owned or licensed • Licensed portfolios from world class scientists and institutions – – – – Lawrence Berkeley - Alivisatos, Mc. Euen UC Berkeley - Yang Harvard – Lieber, Park MIT - Bawendi Columbia - Brus UCLA - Heath Yussum, Hebrew Univ of Jerusalem – Banin Chicago – Guyot-Sionnest • The Scientific Advisory Board • Annual Revenues ~$3 M © Paul Atherton 2006

Nanosys – the IPO • April 23, 2004 – Nanosys Inc. , a Palo

Nanosys – the IPO • April 23, 2004 – Nanosys Inc. , a Palo Alto-based developer of inorganic semiconductor nanocrystals, filed for an initial public offering Thursday, according to its SEC registration statement. Merrill Lynch, Lehman Brothers, CIBC World Markets and Needham & Co. are underwriting the offering. The company is seeking to raise up to $115 million on the Nasdaq market and has applied for the symbol “NNSY. ” © Paul Atherton 2006

NANOSYS WITHDRAWS IPO Aug. 4, 2004 – Nanosys Inc. has announced the withdrawal of

NANOSYS WITHDRAWS IPO Aug. 4, 2004 – Nanosys Inc. has announced the withdrawal of its IPO. The Palo Alto, Calif. -based nanotech startup was expected to go public this week or early next week. • "Based on adverse market conditions, " the company said in a news release, "Nanosys has determined that it is not advisable at this time to proceed with the proposed offering. " • The company had proposed selling 6. 25 -million shares of stock and estimated the price between $15 and $17 per share. © Paul Atherton 2006

 • Press reports leading up to the expected week of the IPO lambasted

• Press reports leading up to the expected week of the IPO lambasted Nanosys for having only $3 million in revenues in 2003. It was also pointed out that one of the few hard metrics available to value the firm - a price-to-revenue ratio over 120 - suggested it was a speculative investment, and that if it performed poorly, it would undermine the ability of other nanotechnology firms to access the public markets. © Paul Atherton 2006

Nanosys Raises $40 Million in a Private Equity Financing • Palo Alto , CA

Nanosys Raises $40 Million in a Private Equity Financing • Palo Alto , CA - (November 9, 2005). Nanosys, Inc. , a privately • held company focused on developing nanotechnology-enabled products, today announced that the company has raised approximately $40 Million in a private equity financing. This financing was led by El Dorado Ventures and includes new investors Masters Capital, Medtronic, Inc. , Wasatch Advisors, and others. In addition, there was strong participation from existing investors including Alexandria Equities, ARCH Venture Partners, CDIB Bio. Science Ventures, CW Group, Harris & Harris Group, Inc. , In-Q-Tel, Intel Capital, H. B. Fuller Company, Lux Capital, Polaris Venture Partners, Prospect Venture Partners, UOB Hermes Asia Technology Fund, and Venrock Associates. Nanosys will use this funding for the ongoing development and manufacturing scale-up of products that incorporate its proprietary, inorganic nanostructures with integrated functionality for multiple industries. Current product development programs include chemical analysis chips for pharmaceutical drug research, fuel cells for portable electronics, nanostructures for displays and phased array antennas, non-volatile memory for electronic devices, and solid state lighting products. © Paul Atherton 2006

Oxonica • Oxford University spin out – Pete Dobson, • Inorganic Nanoparticles – Fuel

Oxonica • Oxford University spin out – Pete Dobson, • Inorganic Nanoparticles – Fuel additives (sunscreens (Soltan), bio-tags • • 1999 – angel round 2002 - £ 4 M investment (BASF and others) 2004 - £ 4. 2 M investment 2005 – AIM flotation – raised £ 7. 1 M at market cap of £ 35 M – Float price of 95. 8 p per share © Paul Atherton 2006

Oxonica Market Capitalisation £ 60 M © Paul Atherton 2006

Oxonica Market Capitalisation £ 60 M © Paul Atherton 2006

Oxonica • Panmure Gordon 12 May 2006 – Initiates coverage – Analyst issues BUY

Oxonica • Panmure Gordon 12 May 2006 – Initiates coverage – Analyst issues BUY recommendation – Price target £ 2. 00 © Paul Atherton 2006

Observations • Few ‘pure play’ publicly quoted nanotech companies. • ‘Profound’ nanotech companies have

Observations • Few ‘pure play’ publicly quoted nanotech companies. • ‘Profound’ nanotech companies have still to reach the market • Valuations can be very high!!! • Revenues are very low!! • Big companies working hard on nanotech © Paul Atherton 2006

 • L’Oreal - >200 patents on nanoparticles © Paul Atherton 2006

• L’Oreal - >200 patents on nanoparticles © Paul Atherton 2006

© Paul Atherton 2006

© Paul Atherton 2006

How will nanotech be commercialised ? • Nanotechnology is mainly about processes • Licensing

How will nanotech be commercialised ? • Nanotechnology is mainly about processes • Licensing of process technology to large companies • University spin outs – product based • Transfer of trained people • Long slow steady quiet process • Technology commercialisation is a slow process – nanotech is pretty slow • Only start ups call themselves nanotech companies © Paul Atherton 2006

Investment Areas • Materials and Manufacturing – Lighter stronger smarter materials, catalysts – Smart

Investment Areas • Materials and Manufacturing – Lighter stronger smarter materials, catalysts – Smart packaging, fuel cells and batteries • Electronics and IT – Solar cells, semiconductors and storage, displays, RFIDS – Printable electronics (ink jet techniques) – Smart dust and ambient intelligence • Healthcare – Regenerative medicine • Artificial bone and skin – Drug Discovery – Diagnostics – point of care – Embedded devices (implants, monitors, pumps, pacemakers, cochlear implants) – Personalised medicine © Paul Atherton 2006

Thank You © Paul Atherton 2006

Thank You © Paul Atherton 2006