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The 2010 Dealmakers’ Intentions Study ResultsThe 2010 Dealmakers’ Intentions Study Results
Presentation to BIO SuperPresentation to BIO Super‐‐SessionSession
May 2010May 2010May 2010May 2010
Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Dealmakers’ Intentions Survey for 2010Dealmakers’ Intentions Survey for 2010IntroductionIntroduction
Many deal database resources are available.Many deal database resources are available.
They are indispensable, but can only tell us what has already They are indispensable, but can only tell us what has already happened.happened.
The Dealmakers’ Intentions Survey is designed to be more The Dealmakers’ Intentions Survey is designed to be more forward looking.forward looking.
As each year closes, we ask what Dealmakers expect in the new As each year closes, we ask what Dealmakers expect in the new year.year.
Companies of all sizes are includedCompanies of all sizes are included——but we segment the but we segment the responses.responses.
‐‐22‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Dealmakers’ Intentions Survey for 2010Dealmakers’ Intentions Survey for 2010Why Is Dealmaking So Important Right Now?Why Is Dealmaking So Important Right Now?
In 2008 and 2009, with limited VC funding and a near disappearance of IPOs, the In 2008 and 2009, with limited VC funding and a near disappearance of IPOs, the primary means of realizing value for biotech companies has been through dealmaking.primary means of realizing value for biotech companies has been through dealmaking.
$3 500
$4,000 $4,000
VC FundingVC FundingFunding Through IPOsFunding Through IPOs
$2,000
$2,500
$3,000
$3,500
Fund
ing
(M)
$2,000$2,500$3,000$3,500
Fund
ing
(M)
$0
$500
$1,000
$1,500
Tota
l F
$0$500
$1,000$1,500
,
Tota
l F
Source: BioCentury. January 4, 2010
$01 2
Source: InVivo. February 2010
$01 22008 20092008 2009
‐‐33‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Dealmakers’ Intentions Survey for 2010Dealmakers’ Intentions Survey for 2010Why Should We Focus on the Largest Companies?Why Should We Focus on the Largest Companies?
Companies with revenue greater than $1 billion contribute approximately 70% of Companies with revenue greater than $1 billion contribute approximately 70% of meaningful licensing and acquisition deals.meaningful licensing and acquisition deals.
Big Pharma Share of Licensing DealsBig Pharma Share of Licensing Deals11 Big Pharma Share of AcquisitionsBig Pharma Share of Acquisitions22
60%60%
70%70%
80%80%
60%60%70%70%80%80%
30%30%
40%40%
50%50%
60%60%
hare of D
eals
hare of D
eals
30%30%40%40%50%50%60%60%
are of Deals
are of Deals
0%0%
10%10%
20%20%
1 2
ShSh
0%0%10%10%20%20%
1 2
ShSh20082008 2009200920082008 20092009
1Share of the pharmaceutical and biotech licensing deals with an up‐front payment greater than $15M where the in‐licensor was a company with revenue greater than $1B (62 deals in 2008 and 59 deals in 2009)
Sources: Windhover Strategic Transactions Database for identification of deals; Campbell Alliance analysis
Sources: Windhover Strategic Transactions Database for identification of deals; Campbell Alliance analysis
20082008 2009200920082008 20092009
‐‐44‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
p y g $ ( )2Share of the pharmaceutical and biotech acquisitions with value greater than $100M where the in‐licensor was a company with revenue greater than $1B (28 deals in 2008 and 31 deals in 2009)
Dealmakers’ Intentions Survey for 2010Dealmakers’ Intentions Survey for 2010Characteristics of RespondentsCharacteristics of Respondents
We received responses from senior decision makers representing a variety of company We received responses from senior decision makers representing a variety of company types.types.
R d tR d t TitlTitlR d tR d t TitlTitl CC TTCC TTRespondentRespondent TitlesTitles((n=156n=156))
RespondentRespondent TitlesTitles((n=156n=156))
Other 1%Other 1%
CompanyCompany TypesTypes(n=156n=156)
CompanyCompany TypesTypes(n=156n=156)
Other 1%Other 1%
SVP and Above
Director/Director/Sr. DirectorSr. Director DevelopmentDevelopment
F dF d
Commercialwith Rev > $1B
%
VP
SVP and Above42%31%31% FocusedFocused
45%45%26%
Commerciali h R $1B26% with Rev < $1B
28%
‐‐55‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Source: Campbell Alliance Dealmakers’ Intentions Survey 2010 Source: Campbell Alliance Dealmakers’ Intentions Survey 2010
Dealmakers’ Intentions Survey for 2010Dealmakers’ Intentions Survey for 2010Respondent Role in DealsRespondent Role in Deals
We received responses from both inWe received responses from both in‐‐ and outand out‐‐licensors who had been active deal licensors who had been active deal makers in makers in 2009.2009.
R d t R l i Li iR d t R l i Li i N b f D l C l t d i 2009N b f D l C l t d i 2009Respondent Role in Licensing(n=156)
Respondent Role in Licensing(n=156)
ExclusivelyExclusivelyInIn--License 8%License 8%
ExclusivelyExclusivelyOutOut--License 10%License 10%
Number of Deals Completed in 2009Up‐Front >$5M (All Respondents*)Number of Deals Completed in 2009Up‐Front >$5M (All Respondents*)
MostlyM tl
Completed One Deal 21
Completed Two Deals 10
MostlyIn-License
28%
MostlyOut-License
28%
Completed Three Deals 4
Completed Four Deals 3
Equally In- and Out-License
26%*The sum of deals completed by all respondents was 106; when only in‐licensors were included, the sum was 84.
Completed Five or More Deals 7
‐‐66‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Source: Campbell Alliance Dealmakers’ Intentions Survey 2010Source: Campbell Alliance Dealmakers’ Intentions Survey 2010
only in licensors were included, the sum was 84.
Dealmakers’ Intentions Survey for 2010Dealmakers’ Intentions Survey for 2010General Expectations for Deal ActivityGeneral Expectations for Deal Activity
Overall, the respondents with commercial operations expect levels of Phase III Overall, the respondents with commercial operations expect levels of Phase III dealmaking to remain steady. dealmaking to remain steady.
Expectations for Phase III DealsExpectations for Phase III Deals
60%60% InIn‐‐LicensorsLicensorsOutOut‐‐LicensorsLicensors
30%30%
40%40%
50%50%
Respon
dents
Respon
dents
OutOut LicensorsLicensors
10%10%
20%20%
30%30%
Share of R
Share of R
0%0%
Decrease over Decrease over last yearlast year
Remain the Remain the samesame
Increase over Increase over last yearlast year
‐‐77‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Source: Campbell Alliance Dealmakers’ Intentions Survey 2010
n=54 In‐Licensors, 52 Out‐Licensors
Dealmakers’ Intentions Survey for 2010Dealmakers’ Intentions Survey for 2010General Expectations for Deal ActivityGeneral Expectations for Deal Activity
These respondents were even more optimistic about Phase II deal making activity.These respondents were even more optimistic about Phase II deal making activity.
E t ti f Ph II D lE t ti f Ph II D lExpectations for Phase III DealsExpectations for Phase III Deals
60%60% InIn‐‐LicensorsLicensorsOutOut‐‐LicensorsLicensors
Expectations for Phase II DealsExpectations for Phase II Deals
60%60% InIn‐‐LicensorsLicensorsOutOut‐‐LicensorsLicensors
30%30%
40%40%
50%50%
Respon
dents
Respon
dents
OutOut LicensorsLicensors
30%30%
40%40%
50%50%
Respon
dents
Respon
dents
10%10%
20%20%
30%30%
Share of R
Share of R
10%10%
20%20%
30%30%
Share of R
Share of R
0%0%
Decrease over Decrease over last yearlast year
Remain the Remain the samesame
Increase over Increase over last yearlast year
0%0%
Decrease over Decrease over last yearlast year
Remain the Remain the samesame
Increase over Increase over last yearlast year
‐‐88‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Source: Campbell Alliance Dealmakers’ Intentions Survey 2010
n=54 In‐Licensors, 52 Out‐Licensors n=54 In‐Licensors, 52 Out‐Licensors
Expectations and IntentionsExpectations and IntentionsIntentions by Therapeutic AreaIntentions by Therapeutic Area
Dealmaking intentions are concentrated in a few therapeutic areas.Dealmaking intentions are concentrated in a few therapeutic areas.
Dealmakers’ IntentionsDealmakers’ Intentions(Share of respondents(Share of respondents rating their likelihood to complete a Phase II or IIIrating their likelihood to complete a Phase II or III
Dealmakers’ IntentionsDealmakers’ Intentions(Share of respondents(Share of respondents rating their likelihood to complete a Phase II or IIIrating their likelihood to complete a Phase II or III(Share of respondents (Share of respondents rating their likelihood to complete a Phase II or III rating their likelihood to complete a Phase II or III
deal in the therapeutic area as a 5 or greater on a scale of 7)deal in the therapeutic area as a 5 or greater on a scale of 7)(Share of respondents (Share of respondents rating their likelihood to complete a Phase II or III rating their likelihood to complete a Phase II or III
deal in the therapeutic area as a 5 or greater on a scale of 7)deal in the therapeutic area as a 5 or greater on a scale of 7)
Metabolics (4%)Metabolics (4%)Dermatology (3%)Dermatology (3%)
Women’s Health (3%)Women’s Health (3%)
Oncology (24%)Oncology (24%)
Cardiovascular (4%)Cardiovascular (4%)
Antivirals (4%)Antivirals (4%)Antibiotics (4%)Antibiotics (4%)
( )( )
CNS (excluding pain) (15%)CNS (excluding pain) (15%)
Vaccines (6%)Vaccines (6%)
Cardiovascular (4%)Cardiovascular (4%)
Pain (9%)Pain (9%)Immunology (12%)Immunology (12%)
Gastrointestinal (6%)Gastrointestinal (6%)
Respiratory (6%)Respiratory (6%)
‐‐99‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Source: Campbell Alliance Dealmakers’ Intentions Survey 2010. N=66 (only including respondents who work for companies with commercial operations [i.e., revenue above $0] and who described their role as exclusively in‐licensing, mostly in‐licensing, or equally in‐ and out‐ licensing)
Immunology (12%)Immunology (12%)
Expectations and IntentionsExpectations and IntentionsExpectations for Deal ValuesExpectations for Deal Values
Dealmakers expect deal values to go up in the areas of expressed interest.Dealmakers expect deal values to go up in the areas of expressed interest.
Dealmakers’ Intentions(Share of respondents anticipating at least a 10% increase in up front payments
Dealmakers’ Intentions(Share of respondents anticipating at least a 10% increase in up front payments(Share of respondents anticipating at least a 10% increase in up‐front payments
for Phase II deals in the selected therapeutic areas)(Share of respondents anticipating at least a 10% increase in up‐front payments
for Phase II deals in the selected therapeutic areas)
CNS (excluding Pain)CNS (excluding Pain)
OncologyOncology
MetabolicsMetabolics
VaccinesVaccines
AntiviralsAntivirals
PainPain
( g )( g )
Value represents the share of respondents who identified themselves as having a role of
AntibioticsAntibiotics
ImmunologyImmunology
DermatologyDermatology
RespiratoryRespiratory
Women's HealthWomen's Health identified themselves as having a role of “mostly” or “exclusively” in‐licensing and choosing either “increase by 10%‐20%” or
“increase by more than 20%” when asked for expectations on up‐front payments for Phase II
0%0% 5%5% 10%10% 15%15% 20%20% 25%25% 30%30% 35%35% 40%40%
GastrointestinalGastrointestinal
CardiovascularCardiovascular
AntibioticsAntibioticsassets in the identified therapeutic area.
‐‐1010‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Source: Campbell Alliance Dealmakers’ Intentions Survey 2010
n=~35 (varied by therapeutic area) individuals who described their role as mostly or exclusively in‐licensing
Expectations and IntentionsExpectations and IntentionsProduct AvailabilityProduct Availability
Supply is also high in the areas of expressed interest . . . Supply is also high in the areas of expressed interest . . .
Comparison of Areas Where 10 Top Companies Express Licensing Interest and Est. # of Products AvailableComparison of Areas Where 10 Top Companies Express Licensing Interest and Est. # of Products Available
Therapeutic AreaNumber of Companies Expressing
Licensing InterestEstimated Number of Phase II and III Products Available for Licensing
Oncology 10 ~500
CNS (Excluding Pain) 9 ~200CNS (Excluding Pain) 9 200
Immunology 9 ~235
Pain 7 ~75
Vaccines 3 ~85
Respiratory 7 ~110
Gastrointestinal 2 ~90
Metabolics 10 ~30
Antibiotics 3 ~70
Antivirals 7 ~110
Cardiovascular 9 ~50
Dermatology 1 ~30
W ’ H l h 1 85
‐‐1111‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Women’s Health 1 ~85
Companies Included: Johnson & Johnson, Pfizer, Bayer, GSK, Novartis, sanofi‐aventis, Roche, AstraZeneca, Merck, Abbott, BMS, and Eli LillyNote: Therapeutic area included if company expressed licensing interest in any disease state within the therapeutic areaSources: Company websites and partnering brochures
Expectations and IntentionsExpectations and IntentionsLicensing InventoryLicensing Inventory
. . . making the “inventory” of available assets greatest in some of the areas of highest . . . making the “inventory” of available assets greatest in some of the areas of highest demand.demand.
Hypothetical Licensing “Hypothetical Licensing “Inventory”*Inventory”*Hypothetical Licensing “Hypothetical Licensing “Inventory”*Inventory”*Hypothetical Licensing Hypothetical Licensing InventoryInventoryHypothetical Licensing Hypothetical Licensing InventoryInventory
1515
2020
2525
YearsYears
55
1010
1515
00
*Th i h i f i ll il bl Ph II d Ph III
Sources: Campbell Alliance Dealmakers’ Intentions Survey 2010; Adis; Pharmaprojects; Windhover Transaction Tracker; Campbell Analysis
‐‐1212‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
*The inventory measure represents the ratio of potentially available Phase II and Phase III assets divided by the number of deals completed in 2009 that had an up‐front value of more than $10M.
Expectations and IntentionsExpectations and IntentionsDeal TimingDeal Timing
So we looked at when our Dealmakers thought a deal should be done.So we looked at when our Dealmakers thought a deal should be done.
When InWhen In‐‐Licensors Say OutLicensors Say Out‐‐Licensors Should Do the DealLicensors Should Do the DealWhen InWhen In‐‐Licensors Say OutLicensors Say Out‐‐Licensors Should Do the DealLicensors Should Do the Deal
60%
70%
80%
20%
30%
40%
50%Share ofShare ofRespondentsRespondents
0%
10%
20%
‐‐1313‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Source: Campbell Alliance Dealmakers’ Intentions Survey 2010
Before End of Phase IIBefore End of Phase II Immediately Following Phase IIImmediately Following Phase II Following Phase IIIFollowing Phase III
n=42 to 69 depending on therapeutic area; only included respondents who indicated their role is exclusively or mostly in‐licensing or equally in‐ and out‐licensing.
Expectations and IntentionsExpectations and IntentionsDeal TimingDeal Timing
In three areas, we found a comparatively high share of inIn three areas, we found a comparatively high share of in‐‐licensors who see an licensors who see an opportunity to license prior to the completion of Phase II.opportunity to license prior to the completion of Phase II.
When InWhen In‐‐Licensors Say OutLicensors Say Out‐‐Licensors Should Do the DealLicensors Should Do the DealWhen InWhen In‐‐Licensors Say OutLicensors Say Out‐‐Licensors Should Do the DealLicensors Should Do the Deal
60%
70%
80%
20%
30%
40%
50%Share ofShare ofRespondentsRespondents
0%
10%
20%
‐‐1414‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Source: Campbell Alliance Dealmakers’ Intentions Survey 2010
Before Endof Phase IIBefore Endof Phase II Immediately Following Phase IIImmediately Following Phase II Following Phase IIIFollowing Phase III
n=42 to 69 depending on therapeutic area; only included respondents who indicated their role is exclusively or mostly in‐licensing or equally in‐ and out‐licensing.
Expectations and IntentionsExpectations and IntentionsHot AreasHot Areas
These biases separate what is truly “hot” from what is simply “in the neighborhood.”These biases separate what is truly “hot” from what is simply “in the neighborhood.”
Phase IIITherapeutic Area
Phase I Through Phase II Initiated
Phase II Completed
Phase III Completed
Through FiledMarketed
Share Completed on Phase II Data
Oncology 8 6 1 1 37%
Infectious Disease 4 1 20%Infectious Disease 4 1 20%
CNS(excluding pain)
1 3 2 3 56%
Gastrointestinal 1 2 66%
Cardiovascular 2 2 1 1 50%
Respiratory 1 1 50%
All Others 7 4 2 5 22%
Total 24 18 7 10 30%
‐‐1515‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Sources: Windhover Strategic Transactions Database for identification of deals; Campbell Alliance analysis
Total 24 18 7 10 30%
Expectations and IntentionsExpectations and IntentionsHot AreasHot Areas
The upThe up‐‐front payments for oncology therapies in new but increasingly well characterized front payments for oncology therapies in new but increasingly well characterized mechanisms reveal the value of products in “hot” areas.mechanisms reveal the value of products in “hot” areas.
Out‐Licensor In‐Licensor Up‐Front Payment
Merrimack Sanofi‐aventis $60M
Trubion Facet $30M
Plexxikon Roche $60M
Ambit Astellas $40MAmbit Astellas $40M
Seattle Genetics Millennium $60M
Exelixis Sanofi‐aventis $140M*
*Covered two products
Ardea Bayer $35M
‐‐1616‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Source: Windhover Strategic Transactions Database for identification of deals
Expectations and IntentionsExpectations and IntentionsWhat Does Proof of Concept Mean Now?What Does Proof of Concept Mean Now?
InIn‐‐Licensors have different “proof” needs for different types of products.Licensors have different “proof” needs for different types of products.
Today’s “Proof Demands”Today’s “Proof Demands”Today’s “Proof Demands”Today’s “Proof Demands”
Category 1
Specialist Product
New (well
Description
New (well characterized) mechanism
“Proof Demand”Traditional Phase II
Clinical POC
Examples from 2009 Dealmaking
AC220 (AmbitBiosciences)
MM121
‐‐1717‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
2009 Dealmaking MM121 (Merrimack)
Expectations and IntentionsExpectations and IntentionsWhat Does Proof of Concept Mean Now?What Does Proof of Concept Mean Now?
InIn‐‐Licensors have different “proof” needs for different types of products.Licensors have different “proof” needs for different types of products.
Today’s “Proof Demands”Today’s “Proof Demands”Today’s “Proof Demands”Today’s “Proof Demands”
Category 1 2
Specialist Product
New (well
Specialist Product
Established
Description
New (well characterized) mechanism
Established Mechanism
New Active Product
“Proof Demand”Traditional Phase II
Clinical POC
Potential to EnterMarket Early in
SSequence
Examples from 2009 Dealmaking
AC220 (AmbitBiosciences)
MM121
Amplixa (Targacept) Linaclotide
‐‐1818‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
2009 Dealmaking MM121 (Merrimack)
Linaclotide (Ironwood)
Expectations and IntentionsExpectations and IntentionsWhat Does Proof of Concept Mean Now?What Does Proof of Concept Mean Now?
InIn‐‐Licensors have different “proof” needs for different types of products.Licensors have different “proof” needs for different types of products.
Today’s “Proof Demands”Today’s “Proof Demands”Today’s “Proof Demands”Today’s “Proof Demands”
Category 1 2 3
Specialist Product
New (well
Specialist Product
Established
Specialist Product
Established
Description
New (well characterized) mechanism
Established Mechanism
New Active Product
Established Mechanism
Late Entrant or Established Active Product
“Proof Demand”Traditional Phase II
Clinical POC
Potential to EnterMarket Early in
S
ClinicalDifferentiation and
Potential for Sequence
Reimbursement
Examples from 2009 Dealmaking
AC220 (AmbitBiosciences)
MM121
Amplixa (Targacept) Linaclotide
Iloperidone (Vanda) DM1796
‐‐1919‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
2009 Dealmaking MM121 (Merrimack)
Linaclotide (Ironwood)
DM1796 (Depomed)
Expectations and IntentionsExpectations and IntentionsWhat Does Proof of Concept Mean Now?What Does Proof of Concept Mean Now?
InIn‐‐Licensors have different “proof” needs for different types of products.Licensors have different “proof” needs for different types of products.
Today’s “Proof Demands”Today’s “Proof Demands”Today’s “Proof Demands”Today’s “Proof Demands”
Category 1 2 3 4
Specialist Product
New (well
Specialist Product
Established
Specialist Product
Established
Any Product in Primary Care
Description
New (well characterized) mechanism
Established Mechanism
New Active Product
Established Mechanism
Late Entrant or Established Active Product
y
“Proof Demand”Traditional Phase II
Clinical POC
Potential to EnterMarket Early in
S
ClinicalDifferentiation and
Potential for
Differentiation and Potential for
R i b tSequenceReimbursement
Reimbursement
Examples from 2009 Dealmaking
AC220 (AmbitBiosciences)
MM121
Amplixa (Targacept) Linaclotide
Iloperidone (Vanda) DM1796
Intermezzo (Transcept) Voltaren Gel
‐‐2020‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
2009 Dealmaking MM121 (Merrimack)
Linaclotide (Ironwood)
DM1796 (Depomed)
Voltaren Gel (Novartis)
Business Model ImplicationsBusiness Model ImplicationsThe Biotech Business Model MapThe Biotech Business Model Map
These “proof demands” are forcing new behaviors by biotech leaders.These “proof demands” are forcing new behaviors by biotech leaders.
First TA Commercial ModelsFirst Product Technology Modelsgy
ConceptConceptRefinerRefiner
First Application First Application DeveloperDeveloper
Post POC DeveloperPost POC Developer
Post POC DeveloperPost POC Developer(Patron Model)(Patron Model)
Post POC DeveloperPost POC Developer(Independent Model)(Independent Model)
First Region First Region CommercializerCommercializer
First Region First Region CommercializerCommercializer
(Outsource Model)(Outsource Model)
First Region First Region CommercializerCommercializer(FIPCO Model)(FIPCO Model)
MultiMulti‐‐Region Region CommercializerCommercializer
MultiMulti‐‐Region Region CommercializerCommercializer
(Outsource Model)(Outsource Model)
MultiMulti‐‐Region Region CommercializerCommercializer(FIPCO Model)(FIPCO Model)
Post POC DeveloperPost POC Developer(Polypartner Model)(Polypartner Model)
(Patron Model)(Patron Model) CommercializerCommercializer(Co(Co‐‐Pro Model)Pro Model)
(Outsource Model)(Outsource Model)
License to Prove and
CommercializerCommercializer(Co(Co‐‐Pro Model)Pro Model)
( )( )
First Region Commercializer
Multi‐Region CommercializerPipeline Builder
P t POCP t POC
Improve
OCOC
Multi‐TA Commercial Models
(Multi‐TA, FIPCO Model)
(Multi‐TA, FIPCO Model)Pipeline Builder
(Acquisition Model)
p(Expansion Model)
Technology and Pipeline Expansion Models
*FIPCO Fully integrated pharmaceutical company
Post POC Post POC CommercializerCommercializer
(Multi TA, Multi(Multi TA, Multi‐‐Region Region Model)Model)
Post POC Post POC CommercializerCommercializer
(Focused TA, Multi(Focused TA, Multi‐‐Region Model)Region Model)
Post POC Post POC CommercializerCommercializer
(Multi TA, Single(Multi TA, Single‐‐Region Region Model)Model)
Post POC Post POC CommercializerCommercializer
(Focused TA, Single (Focused TA, Single Region Model)Region Model)
Technology and Pipeline xpansion Models
‐‐2121‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
*FIPCO—Fully integrated pharmaceutical company
Commercial Only ModelsModel)Model)Model)Model)
Business Model ImplicationsBusiness Model ImplicationsExpectations of Tried and True Business Model PathwaysExpectations of Tried and True Business Model Pathways
Some companies had a plan to pursue the “tried and true” pathway of developing a Some companies had a plan to pursue the “tried and true” pathway of developing a first product through Phase II proof of concept . . .first product through Phase II proof of concept . . .
Biotechnology Business Model PathwaysBiotechnology Business Model Pathways
ConceptConceptRefinerRefiner
First Application First Application DeveloperDeveloper
‐‐2222‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Business Model ImplicationsBusiness Model ImplicationsExpectations of Tried and True Business Model PathwaysExpectations of Tried and True Business Model Pathways
. . . finding a partner . . .. . . finding a partner . . .
Biotechnology Business Model PathwaysBiotechnology Business Model Pathways
ConceptConceptRefinerRefiner
First Application First Application DeveloperDeveloper
Post POC DeveloperPost POC Developer(Patron Model)(Patron Model)
‐‐2323‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Business Model ImplicationsBusiness Model ImplicationsExpectations of Tried and True Business Model PathwaysExpectations of Tried and True Business Model Pathways
. . . and returning to their core capability to build out additional products in a pipeline.. . . and returning to their core capability to build out additional products in a pipeline.
Biotechnology Business Model PathwaysBiotechnology Business Model Pathways
ConceptConceptRefinerRefiner
First Application First Application DeveloperDeveloper
Post POC DeveloperPost POC Developer(Patron Model)(Patron Model)
Pipeline Builderp(Expansion Model)
‐‐2424‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Business Model ImplicationsBusiness Model ImplicationsNew Business Model Pathways for Some CategoriesNew Business Model Pathways for Some Categories
Instead, some firmsInstead, some firms——particularly those in Category 3particularly those in Category 3——are finding that they must are finding that they must adopt an independent postadopt an independent post‐‐POC development model.POC development model.
Biotechnology Business Model PathwaysBiotechnology Business Model Pathways
ConceptConceptRefinerRefiner
First Application First Application DeveloperDeveloper
Post POC Developer(Patron Model)
Post POC DeveloperPost POC Developer(Independent Model)(Independent Model)
‐‐2525‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Business Model ImplicationsBusiness Model ImplicationsNew Business Model Pathways for Some CategoriesNew Business Model Pathways for Some Categories
A few are even finding that they need to prepare for independent commercialization.A few are even finding that they need to prepare for independent commercialization.
Biotechnology Business Model PathwaysBiotechnology Business Model Pathways
ConceptConceptRefinerRefiner
First Application First Application DeveloperDeveloper
Post POC Developer(Patron Model)
Post POC DeveloperPost POC Developer(Independent Model)(Independent Model)
First Region First Region CommercializerCommercializer(FIPCO Model)(FIPCO Model)
‐‐2626‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Licensing OperationsLicensing OperationsThe Pipeline Challenge for InThe Pipeline Challenge for In‐‐LicensorsLicensors
InIn‐‐Licensors have their own challenges. Primary among these is keeping a full pipeline Licensors have their own challenges. Primary among these is keeping a full pipeline of opportunities.of opportunities.
Attrition in the Licensing PipelineAttrition in the Licensing PipelineAttrition in the Licensing PipelineAttrition in the Licensing PipelineAttrition in the Licensing PipelineAttrition in the Licensing PipelineAttrition in the Licensing PipelineAttrition in the Licensing Pipeline
Opportunities ReviewedNumber of Opportunities Reviewed( i b i )
Ten Programs Move to CDA
pp
Number of Programs Moving to CDA (varies by company size)
(varies by company size)
21%
49%
Share of Programs Moving from CDA to Binding Terms
Share of Binding Terms Going to Cl d T ti
OneClosedDeal
Closed Transactions
Closed Transaction
‐‐2727‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
Source: Campbell Alliance Dealmakers’ Intentions Survey 2010. Only includes responses from individuals with in‐licensing responsibilities within companies with commercial operations.
Licensing OperationsLicensing OperationsThe Pipeline Challenge for InThe Pipeline Challenge for In‐‐LicensorsLicensors
A large share of the burden for filling the top of the funnel falls on Business A large share of the burden for filling the top of the funnel falls on Business Development leaders.Development leaders.
In‐Licensors First Contact for Opportunities(N=36)
In‐Licensors First Contact for Opportunities(N=36)
4%4% 1%BoardBoard OtherOther
10%
4%4% 4%4%MarketingMarketing
R&DR&D
19%BusinessBusiness
DevelopmentDevelopmentE tiE ti
62%19%ExecutiveExecutive
LeadershipLeadership
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Licensing OperationsLicensing OperationsThe Pipeline Challenge for InThe Pipeline Challenge for In‐‐LicensorsLicensors
Opportunities must be identified from a variety of sourcesOpportunities must be identified from a variety of sources——but industry partnering but industry partnering meetings have taken a leading role.meetings have taken a leading role.
In‐Licensors Source for Opportunities(N=31)
In‐Licensors Source for Opportunities(N=31)
OtherOther
Partnering MeetingPartnering Meeting(proactive)(proactive)Scientific LiteratureScientific Literature
26%8%
11%
Scientific MeetingsScientific Meetings 11%
Partnering MeetingPartnering Meeting(reactive)(reactive)
Unsolicited ReceiptUnsolicited Receiptof Nonof Non Confidential MaterialsConfidential Materials
19%
26%
‐‐2929‐‐Copyright © Copyright © 2010 Campbell Alliance Group, Inc. 2010 Campbell Alliance Group, Inc. All Rights ReservedAll Rights Reserved..
( )( )of Nonof Non‐‐Confidential MaterialsConfidential Materials