Biopartnering Strategies: Maximizing returns from biotechnology deal-making

Table of Contents
Biopartnering Strategies
Executive Summary 8
Biopartnering trends 8
Licensing across the biotechnology lifecycle 9
The biopartnering process 10
Biopartnering for ‘pioneer’ companies 11
Biopartnering for ‘growth’ companies 12
Biopartnering for ‘consolidation’ companies 13

Chapter 1 Biopartnering trends 16
Summary 16
Introduction 17
A maturing biotechnology industry 18
A shift in biopartnering trends 21
Strategic implications 25

Chapter 2 Licensing across the biotechnology lifecycle 28
Summary 28
Introduction 29
The biotech company lifecycle 29
‘Pioneer’ companies 34
‘Growth’ companies 36
‘Consolidation’ companies 37
iv

Chapter 3 The biopartnering process 42
Summary 42
Introduction 43
Biopartnering complexity 43
The biopartnering process 45
Biopartnering strategy 47
Opportunity identification 49
Biotechnology out-licensors 49
Biopartnering in-licensors 53
Licensing evaluations 56
Deal-making and agreement 61
Post-deal management and analysis 65

Chapter 4 Biopartnering for ‘pioneer’ companies 70
Summary 70
Introduction 71
Biopartnering objectives 71
Case study: IDM Pharma 72
History 72
Financials 73
Key collaborations 75
Medarex 75
Sanofi-Aventis 75
Other key events 76
Jenner Biotherapies 76
Epimmune 76
Pharmexa 76
Recommendations 76

Chapter 5 Biopartnering for ‘growth’ companies 80
Summary 80
Introduction 81
Biopartnering objectives 81
v
Case study: Millennium Pharmaceuticals 82
History 82
Financials 83
Key collaborations 85
Sanofi-Aventis 85
Integrilin 86
Ortho Biotech 86
Other key events 87
Leukosite 87
COR Therapeutics 87
Velcade launch 87
Recommendations 88

Chapter 6 Biopartnering for ‘consolidation’ companies 90
Summary 90
Introduction 91
Biopartnering objectives 91
Case study: Biogen IDEC 92
History 92
Financials 93
Key collaborations 95
Schering AG 95
Elan 96
PDL BioPharma 96
Other key events 96
Biogen IDEC merger 96
Conforma Therapeutics 97
Fumapharm 97
Recommendations 97
Chapter 7 Appendix 100
Primary research survey 100
Index 103
vi

List of Figures
Figure 1.1: Number of biotechnology M&A deals by partner, 1996-2005 22
Figure 1.2: Biopartnering by in-licensing partner, 1996-2005 23
Figure 1.3: Biopartnering by stage of development, 1996-2005 24
Figure 2.4: Evolutionary growth stages for biotech companies 30
Figure 2.5: Biotech company growth drivers 31
Figure 2.6: Key biotech company growth phases 33
Figure 2.7: The biotechnology industry split by development phase 34
Figure 3.8: Expected change in number of biopartnering deals over next 12 months 44
Figure 3.9: Expected change in value of biopartnering deals over next 12 months 44
Figure 3.10: Expected change in number of potential partners chasing each biopartnering deal over
next 12 months 45
Figure 3.11: The biopartnering licensing process 46
Figure 3.12: Outside partners involved in identifying potential biopartnering opportunities 53
Figure 3.13: Outside partners involved in due diligence for potential biopartnering opportunities 60
Figure 3.14: Key information shared between partners during negotiations over biopartnering
agreements 61
Figure 3.15: Valuation techniques used to support negotiations over biopartnering agreements 62
Figure 3.16: Outside partners involved in the valuation and negotiation of biopartnering agreements
64
Figure 4.17: IDM Pharma’s revenues, 2005 73
Figure 4.18: IDM Pharma’s key financials, 2000-2005 74
Figure 5.19: Millennium Pharmaceuticals’ revenues, 2005 83
Figure 5.20: Millennium Pharmaceuticals’ key financials, 1994-2005 85
Figure 6.21: Biogen IDEC’s revenues, 2005 93
Figure 6.22: Biogen IDEC’s key financials, 1991-2005 95
Figure 7.23: Licensing trends survey respondents by company focus 100
Figure 7.24: Licensing trends survey respondents by functional responsibility 101
Figure 7.25: Licensing trends survey respondents by licensing responsibility 102

List of Tables
Table 1.1: The global biotechnology industry by region, 2005 18
Table 1.2: Growth in the global biotechnology industry, 2004-2005 19
Table 1.3: Biotechnology equity financing trends in North America and Europe, 2004-2005 19
Table 1.4: Biotechnology blockbusters, 2003-2005 20
Table 4.5: IDM Pharma’s clinical development pipeline, 2006 74
Table 5.6: Millennium Pharmaceuticals’ clinical development pipeline, 2006 84
Table 6.7: Biogen IDEC’s clinical development pipeline, 2006 94