Future Insight Conference, the big scientific flagship conference initiated at the occasion of Merck’s 350th anniversary in 2018.
Merck, as a leading science and technology company, operates across healthcare, life sciences and performance materials. From advancing gene editing technologies and discovering unique ways to treat the most challenging diseases to enabling the intelligence of devices – Merck has a strong focus and commitment to advancing science and technology. Scientific exploration and responsible entrepreneurship have been key to Merck’s technological and scientific advances, which is how Merck has thrived since it was founded in 1668. A key aspect of the company vision is curiosity, a strong focus on external innovation, and a strong wish to partner and join forces with the brightest academics and start-up companies. We have a number of different initiatives that work closely together to provide opportunities for small, innovative start-up companies and academics to join forces with Merck, to jointly advance human progress in medicine, life sciences or performance materials. In this white paper, we describe two of the key initiatives from Merck to engage with the brightest minds: the Curious Future Insight Conference and the M Ventures corporate venture fund. Both functions work closely together by continuously mapping the external innovation research and development (R&D) environment. In partnership with Nature Research, we established The Spinoff Prize to reward and celebrate the most innovative university entrepreneurs and their companies. The prize is a perfect testament to our mission to advance human progress and connect scientists all over the world.
Welcome to the world of M Ventures
M Ventures is the strategic, corporate venture capital arm of Merck KGaA, Darmstadt, Germany. Its mandate is to invest in innovative technologies and products that have the potential to significantly impact the company’s core business areas. Since its inception in 2009, M Ventures has established itself as a major corporate venture fund with a strong focus on strategic investments in the fields of biopharma, life science tools and technologies, semi-conductor and display technologies, and deep-tech and sustainability. With a strong focus on cutting-edge technologies, M Ventures invests in approximately 10 new companies per year. These investments range from early-stage deals in line with the original M Ventures mandate, but also include later stage investments.
Currently, M Ventures manages a €400 million evergreen fund, with nearly 50 active portfolio companies and is one of the most active corporate technology venture capital investors globally. The fund is widely regarded as an expert partner for investments and generates deals globally. It operates out of four locations with headquarters in Amsterdam (The Netherlands), and has offices in Darmstadt (Germany), Boston (United States) and Tel Aviv (Israel). The activities of the fund can be broadly split into four dimensions; direct (seed) investments in syndicated deals, company creation, spinoff programmes from Merck and supporting early-stage innovation through our incubator in Israel and seed fund in China.
Improved displays have revolutionized smart phones, among other applications.
Seed investments and company creation
The majority of the current M Ventures portfolio are either seed investments through syndicated deals, or investments into companies (co)created by M Ventures. Given the strategic mandate of the fund, the investments in start-ups are always in fields strategically relevant to Merck. With the focus on early/seed stage investing, M Ventures is able to support companies early on with capital and with insights to help them develop. The focus on young companies also enables a wider view on external innovation and allows that company to strike relationships with other key investors and entrepreneurs that could eventually lead to the adoption of their technologies by Merck. M Ventures has always worked on a mixed strategic and financial mandate. It makes investments in technologies and products that could be relevant to Merck over time, without rights or options for Merck, but with strong relationships based on value-added investor behaviour. At the same time, M Ventures believes strongly that the only way to successfully make strategic investments is by investing in companies that also generate a financial return. The latter forms the basis for our evergreen mandate, which allows M Ventures to maximize returns and generate economic value over a long period of time by continuing to invest capital. The deployment of ‘patient capital’ means that at M Ventures we can be focused on investing in true break-through innovation and early-stage game-changing technologies.
Spinoffs: An Important way to create value for non-strategic assets
In addition to investing in external innovation, M Ventures also plays a part in the creation of a number of very successful Merck spinoffs. In total, these spinoffs have raised more than €400 million in external financing – one was sold for US$1,100 million, and two companies raised money on public stock exchanges. Given the deep experience in company creation and assessing assets for investments, putting spinoff creation under the wings of a corporate venturing unit is a logical next step. As a result, Merck makes the most out of the expertise it has built up in funding companies and supporting management teams by creating businesses that are relevant and successful. For a number of deprioritized assets, the fund evaluates them as if they were external investment opportunities, with the same rigorous standards applied.
In most of the spinoff companies the M Ventures team has been responsible for drafting the business plan, hiring management teams and playing an interim executive role until the company is ready to stand alone. The difference from external investments is that for spinoffs, M Ventures might be the only initial investor for the first two to three years of financing before raising additional funding externally. In this model, M Ventures makes sure to build an independent team and organization that demonstrates it can operate and validate the technology external to Merck before syndicating a deal. Looking back, success stories including ObsEva, which floated on NASDAQ in early 2017, the sale of Prexton to Luendbeck, and the financings of Asceneuron, Calypso, Prexton Therapeutics and (most recently) iOnctura, all involved significant rounds of venture capital financing from top-tier investor syndicates.
The Curious2018 conference gathered some of the world’s top scientists alongside early career researchers.
BioIncubator and China seed fund
The M Ventures BioIncubator was established in 2012 and is located at the Interlabs facility in Yavne, the leading Merck healthcare R&D site in Israel. The purpose of the incubator is to invest in healthcare opportunities that are at seed-stage or academic research stage. The incubator’s mandate is to bridge the gap between university-stage assets and bring them to market through seed financing with other investors. The M Ventures BioIncubator is a stand-alone laboratory facility of 500 square metres and is equipped with state-of-the-art R&D equipment. The proximity to Merck R&D allows a unique level of support and interaction between scientists. This cross-fertilization has created a unique spirit of collaborations, where investors, start-ups and R&D professionals work together to realize their vision of a new therapeutic.
The RMB 100 million (€13 million) China Seed Fund was launched at the end of 2019 and is targeted at startups in China. It underlines Merck’s commitment to invest in the Chinese market and aims to strengthen its ties to the dynamic Chinese innovation ecosystem. Within the scope of the overall M Ventures mandate, the new seed fund is being established to foster relevant innovations from China and to engage with the startup scene in China following on from the country’s commitment to innovation. M Ventures intends to invest in Chinese seed-stage companies with individual investments of between €500,000 and €1 million. The seed investment is meant to help the startups reach the next value inflection point. The initiative targets early innovations generated within the Chinese innovation ecosystem with a connection to healthcare, life sciences, performance materials or new businesses. The seed investment will be managed by M Ventures and Merck China innovation hub jointly.
Virtual reality technology will play a bigger role in future healthcare.
Welcome to the world of future insight: Science for a better tomorrow
The Curious Future Insight Conference (curious2021) is one of the world’s most renowned gatherings on the future of science and technology. Some of the world’s best scientists and most accomplished entrepreneurs come together to present their work, to shape the future, to solve the challenges of today and to enable the dreams of a better tomorrow. With the slogan ‘Science for a better tomorrow’ the conference is covering a wide range of topics such as: healthcare, life sciences, synthetic biology, nutrition, material sciences, digitalization, energy, mobility, the secrets of the human brain as well as new ways of working together. The conference will feature more than 70 top speakers including around a dozen Nobel laureates and also comprises panel discussions organized in collaboration with Nature Research and AAAS/Science. At the Future Insight Virtual Event July 13th, 2020, the newly created Merck-Nature Spinoff Prize will be handed out for the first time as well as the Merck Future Insight Prize. Free access to this online event is globally available at curiousfutureinsight.com. The Merck Future Insight Prize recognizes and enables top scientists whose work is laying the required scientific and technological foundations to enable a realization of visionary dream products. The first concept, awarded in 2019, was composed with the help of an international scientific advisory board and invited submissions on the topic ‘pandemic protector’, The Merck Future Insight Prize will be given out annually for the next 35 years. In its next instalment the focus will be on the issue of multi-drug resistant bacteria. Future editions of the Future Insight Prize will cover the areas of nutrition (a dream product to help efforts to feed the growing world population) in 2021 and the area of energy (a dream product to reverse the effects of climate change) in 2022. The decision on which research team receives the prize is made by a distinguished jury of more than 70 highly renowned scientists including several Nobel laureates (futureinsightprize.merckgroup.com. For US and Canada: futureinsightprize.emdgroup.com). During the Curious – Future Insight Conference the World Science Declaration was launched as a global call to all nations, societies and organizations to devote more resources to the advancement of science and technology.
It can be signed by everybody supporting this cause online at make-science-not-war.org.
To advance the progress of science and technology in 2020, Merck is offering a series of research grants in the areas of drug discovery, bioreactor design for cultured meat, next-generation machine learning and pandemic preparedness (researchgrants.merckgroup.com. For US and Canada: researchgrants.emdgroup.com). In addition, a series of science competitions have been initiated in the areas of small molecule synthesis, lab digitalization, impact factor prediction and electronic chemicals. (researchchallenges.merckgroup.com For US and Canada: researchchallenges.emdgroup.com).
Young talent is a key factor in building a bright future. In 2020 Merck is conducting the 10th Anniversary Innovation Cup (innovationcup.merckgroup.com For US and Canada: innovationcup.emdgroup.com). At the Innovation Cup some of the world’s brightest students are invited to a one-week summer camp at Merck. The young talents form teams with company retirees to brainstorm and develop ideas for innovative new products in a cross-generational setting. The winning team is allocated the Merck Innovation Cup together with €20,000. Alumni stay connected, meet annually and are now starting to be a source for the emergence of new, highly innovative joint projects in this amazing community.
All of these described activities have one goal in common – making innovation happen and continuing a more than 350-year long success story of curiosity and innovation supported by Merck.