Impact of M&A Activity onR&D Productivity & Innovation	           Daniel L. Mooradian, Ph.D.	             Chief Scientific ...
Objectives	•  Mechanics of Deal making	•  Discuss trends in Medical Device M&A	•  Explore the Challenges facing R&D	•  Sha...
Introduction	•  Mergers & Acquisitions are a necessary and  beneficial part of the corporate “life-cycle”	•  Small companie...
Source: www.fiercemedicaldevices.com	                                         Copyright © 2012 Daniel L. Mooradian. All Rig...
Medical Device M&A Trends	 •  Strong M&A activity in the Medical Device   and Biotech sector through Q2 of 2012	 •  Modest...
Medical Device M&A Trends	•  Significant capital on the side-lines – even   VCs claim to be eager to invest!	•  Trend in la...
The M&A Process                         	 R&D INVOLVEMENT	                       LOW	                        LOW-MEDIUM	  ...
Copyright © 2012 Daniel L. Mooradian. All Rights reserved
Copyright © 2012 Daniel L. Mooradian. All Rights reserved
M&A Challenges	•  Mandatory adoption of cumbersome  processes can strain resources	•  Reorganization - loss of key managem...
Pipeline Value/Technology	  •  Often an attractive   sweetener during due    diligence.	  •  The acquired may believe that...
Strategies to improve   R&D integration	           Copyright © 2012 Daniel L. Mooradian. All Rights reserved
Integration Team	•  Make sure you are represented on the  Integration team	•  Engage your functional counter-part	•  Reali...
Process Knowledge	•  What is your new Innovations Process?	•  What is your new company’s Budget  Process?	•  Who are the k...
The Deal Model 	•  Make sure you understand what  constraints have been placed on your  current and future budgets as part...
Next Years Budget	•  You new organization is already working  on next years budget!	•  You are already at a disadvantage	•...
Protect Resources	  •  The deal-model will set limits on unit    expenditures post-acquisition	  •  If your needs are not ...
Protect Resources	 •  Critical R&D employees who are not   protected by CIC agreements must be   identified and protected v...
Preserve Corporate Culture	    •  The post-acquisition period is one in which      culture can play a critical role in gui...
Communicate!	                Staff	   New	Management	                       Peers	      No news is NOT good news!         ...
Thank you!	      Copyright © 2012 Daniel L. Mooradian. All Rights reserved
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The Impact of Mergers and Acquisitions on R&D Innovation and Productivity - Dr Daniel L. Mooradian, Innova Medical Design, LLC

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Dr Daniel L. Mooradian, Innova Medical Design, LLC - Speaker at the marcus evans Medical Device Manufacturing Summit Fall 2012, held in Colorado Springs, delivered his presentation entitled The Impact of Mergers and Acquisitions on R&D Innovation and Productivity

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The Impact of Mergers and Acquisitions on R&D Innovation and Productivity - Dr Daniel L. Mooradian, Innova Medical Design, LLC

  1. 1. Impact of M&A Activity onR&D Productivity & Innovation Daniel L. Mooradian, Ph.D. Chief Scientific Officer Innova Medical Design LLC Marcus Evans Medical Device Summit 2012 Colorado Springs, CO
  2. 2. Objectives •  Mechanics of Deal making •  Discuss trends in Medical Device M&A •  Explore the Challenges facing R&D •  Share my experiences (R&D centric) as a “survivor” and student of the subject •  Invite you to share your experiences! Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  3. 3. Introduction •  Mergers & Acquisitions are a necessary and beneficial part of the corporate “life-cycle” •  Small companies - often the preferred strategy to create investor value •  Mid-/Large-Companies - a path to growth via optimization of new or existing sales channels Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  4. 4. Source: www.fiercemedicaldevices.com Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  5. 5. Medical Device M&A Trends •  Strong M&A activity in the Medical Device and Biotech sector through Q2 of 2012 •  Modest activity Q3-Q4 2012 based on uncertainty regarding the election outcome, healthcare reform, etc. •  Marketplace seems poised for resurgence in 2013 Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  6. 6. Medical Device M&A Trends •  Significant capital on the side-lines – even VCs claim to be eager to invest! •  Trend in large companies away from organic R&D •  Trend in start-ups toward strategic partnership vs. traditional VC route for start-ups Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  7. 7. The M&A Process R&D INVOLVEMENT LOW LOW-MEDIUM HIGH xeon-international.com/services/corporate-finance/ma/the-ma-process Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  8. 8. Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  9. 9. Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  10. 10. M&A Challenges •  Mandatory adoption of cumbersome processes can strain resources •  Reorganization - loss of key management, changes in reporting can impact morale •  Shift in priorities by OPS, Quality, M&S can reduce availability to support product development leading to delay Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  11. 11. Pipeline Value/Technology •  Often an attractive sweetener during due diligence. •  The acquired may believe that they will have a new source of support for innovation •  Not the Norm. Cost of acquisition (which comes at the expense of existing businesses) makes it difficult to double down before the value of the acquisition itself has been confirmed! Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  12. 12. Strategies to improve R&D integration Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  13. 13. Integration Team •  Make sure you are represented on the Integration team •  Engage your functional counter-part •  Realize that everyone involved has a “day job” •  Seek opportunities for your Senior staff to participate in key integration activities •  Make integration a priority Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  14. 14. Process Knowledge •  What is your new Innovations Process? •  What is your new company’s Budget Process? •  Who are the key decision-makers? •  Are you adequately represented? Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  15. 15. The Deal Model •  Make sure you understand what constraints have been placed on your current and future budgets as part of the acquirers deal model •  If growth in R&D is not built into the deal model then it will be very difficult to grow post-acquisition. Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  16. 16. Next Years Budget •  You new organization is already working on next years budget! •  You are already at a disadvantage •  Learn how budget decisions are made…… •  And who makes them! Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  17. 17. Protect Resources •  The deal-model will set limits on unit expenditures post-acquisition •  If your needs are not reflected in the deal- model then you are at a disadvantage •  Pressure on OPS/Manufacturing/Quality (and Clinical) will put existing and future R&D resources at risk •  You must fight for position or risk decline Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  18. 18. Protect Resources •  Critical R&D employees who are not protected by CIC agreements must be identified and protected via retention agreements if possible •  Protect against flight •  Promote engagement •  Reduce uncertainty and anxiety Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  19. 19. Preserve Corporate Culture •  The post-acquisition period is one in which culture can play a critical role in guiding behavior in the face of uncertainty •  Too little emphasis is placed on the integration/assimilation of culture in mergers & acquisitions •  Repeat your core values often to yourself and others. Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  20. 20. Communicate! Staff New Management Peers No news is NOT good news! Copyright © 2012 Daniel L. Mooradian. All Rights reserved
  21. 21. Thank you! Copyright © 2012 Daniel L. Mooradian. All Rights reserved

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