Introduction to Bio Arbitrage


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Introduction to Bio Arbitrage

  1. 1. Introduction to BioArbitrage
  2. 2. Introduction to BioArbitrage What is BioArbitrage? Who is Harrison Hayes? Harrison Hayes and BioArbitrage The Tools Contact Information 2
  3. 3. What is Arbitrage? Arbitrage involves earning a risk-free profit without the outlay of capital. Arbitrage takes minimal investment for the guarantee of high return 3
  4. 4. BioArbitrage Defined  In BioArbitrage, an asset is identified where the owners undervalue the asset against the market value.  A BioArbitrage fund purchases the asset and then sells it on the open market for an immediate return. 4
  5. 5. How it Works Economics of BioArbitrage Sell Asset Here Market Value Buy Line Buy Asset Here 5
  6. 6. Introduction to BioArbitrage What is BioArbitrage? Who is Harrison Hayes? Harrison Hayes and BioArbitrage The Tools Contact Information 6
  7. 7. Harrison Hayes – Who Are We? Harrison Hayes is a strategic consulting firm to the life, chemical, and material science industries. Specific areas of expertise reside in our unique and proprietary research methodologies that support strategic and tactical decision making processes for our clients. 7
  8. 8. Harrison Hayes: Timeline 1998: 2001: 1991: Bill Smith re- Innovation practiceAddison Whitney acquires Addison spun-off from founded by Bill Whitney Addison Whitney Smith 1995: 2001: 2007: Addison Whitney Innovation comes to Addison Whitney sold to Interpublic light sold to Inventive Group Health; Harrison Hayes is born 8
  9. 9. Harrison Hayes: Bill SmithBill Smith BioFounder and Managing Director of Harrison Hayes, LLC, a strategic consulting firm withan emphasis on the creation of disruptive innovation products and platforms. Prior toHarrison Hayes, Bill was the Founder and CEO of Addison Whitney, which today, is thethird largest branding consultancy in the world. Bill sold Addison Whitney in 1995 toInterpublic Group (NYSE:IPG) and led their Healthcare Acquisition Team for three yearswhich was responsible for over $3 Billion in transactions. He re-acquired AddisonWhitney in 1998. Bill acted in a dual role with Addison Whitney (Chairman) andHarrison Hayes until 2007.EducationB.A., Berklee CollegeM.A., Colorado State University 9
  10. 10. Introduction to BioArbitrage What is BioArbitrage? Who is Harrison Hayes? Harrison Hayes and BioArbitrage The Tools Contact Information 10
  11. 11. Harrison Hayes and BioArbitrage -Initiation A General Partner will shape the investment charter with specific criteria and areas of investment interest. The General Partner has the Right of First Refusal to acquire the Funds portfolio of assets. In the event of non-acquisition, the General Partner maintains the opportunity of financial gain from the asset’s exit strategy. 11
  12. 12. Harrison Hayes and BioArbitrage -The Option There is typically a designated Managing Director of the Fund. The Managing Director and Owner of the identified asset will agree on appropriate acquisition value. The Managing Director will perform its PIPV proprietary analysis to determine that the acquisition price is less than market value. The Fund will exercise the option to purchase the asset within a time period of 12 to 18 months. 12
  13. 13. Harrison Hayes and BioArbitrage -The Auction The Managing Director will market the asset in a controlled auction. Managing Director and asset’s Owner will determine the appropriate strike price. The asset will be auctioned to buyers who are willing to pay more than the agreed strike price. The fund pays the owner the agreed Strike Price and retains the differential. 13
  14. 14. Harrison Hayes and BioArbitrage -Terms A General Partner will invest an previously agreed upon amount. Managing Director to receive a 2.5% Annual Management Fee. Managing Director to receive 20% of the “carry”. Fund will be for a term of seven (7) years. 14
  15. 15. Harrison Hayes and BioArbitrage -Why Invest? The Fund is a key piece in building an innovation pipeline. The Fund has the ability to deliver novel technologies and intellectual property unlike traditional methods. This Fund will provide exposure to global investments “off the grid”. Creates selective investments at reasonable valuations. 15
  16. 16. Introduction to BioArbitrage What is BioArbitrage? Who is Harrison Hayes? Harrison Hayes and BioArbitrage The Tools Contact Information 16
  17. 17. Tools for Success: Technology ScoutingTechnology Sourcing includes the identification of technology developments and thefacilitation of the sourcing of technology. Provisioning of Technology Intelligence to facilitate theIdentification, assessment and Technology Managementusage of information ontechnological developments Acquisition, development, storage, usage and selling of technological knowledge Technology Technology Intelligence ManagementScouts identify and assessnew technologies Scouts facilitate the sourcing of Technology technology Scouting Building and using a network of experts for competitive advantage 17
  18. 18. Tools for Success: Technology ScoutingTechnology Scouting Process consists of five Technology Intelligence steps plus the step ofTechnology Sourcing. Selection of Usage of Filtering, Definition information Evaluation information Collection analyzing, of search sources and and and of data interpreting areas methods to decision sourcing of of data employ making technology 18
  19. 19. Tools for Success: Technology ScoutingTechnology Sourcing supports the external sourcing of technology and the productspecification and development. Innovation Management Product Prototype Fuzzy-front-end specification and validation and Market Launch of Innovation development testing 19
  20. 20. Tools for Success: Technology ScoutingTechnology Sourcing supports the external sourcing of technology and the productspecification and development.Technology Management Storage, Internal External Technology generation and usage of Technology selling or Sourcing technological licensing knowledge 20
  21. 21. Tools for Success: Technology ScoutingFramework for Empirical Research: PLS –path analysis will be used to analyze the successfactors of technology scouting and how to organize it best. Management Factors Scouting Success Factors Areas Defined Process Functional interweavement Formalized connection to R&D Organizational Input for R&D projects Formulized connection to Characteristics Triggering of new R&D Marketing projects Methodological interweavement Stimulation of Triggering of new business field Innovation Boundary spanner capabilities Network Size Characteristics Help in assessment of Technological competence of the scouts technology Internal Network Facilitation of Contact to relevant sources Technology Incentive System Scouting Sourcing needs identified IT-Support Tools Management of Support in acquisition Balanced scout portfolio Scouting Network of technology Role Differentiation Successful acquisition of technology 21
  22. 22. Tools for Success: Technology ScoutingProject Planning: PLS-path analysis and in-depth case studies will be used to studyorganization and success factors of technology scouting. Model Quantitative Model Qualitative Writing of Interviews/Case Valuation Interviews Building Dissertation StudiesIn depth Modeling a Build on the Based on the The dissertationinterviews with framework for Hypothesis of qualitative data, will discuss10 multinational research on the framework – partial least- technologycompanies success factors 50 qualitative square path scouting as of a of technology Interviews are analysis is used method of scouting conducted. to validate the technology hypothesis intelligence and technology In depth case The case studies management studies will be conducted for are analyzed to six companies. gain knowledge of best practices 22
  23. 23. Tools for Success: Technology ScoutingMotivation and Research Question: Further research on Technology Scouting is needed toidentify success factors and to give recommendation on how to organize it.  Increase in technology complexity  Globalization of R&D Motivation  Shorter product life cycles  Increasing volatility of markets No sufficient research on ….  …success factors and Research Gap  …organization of technology scouting and  ...interaction with other function of the organization  What are the aims of Technology Scouting?  What are important success factors of Technology Research Scouting? Questions  How should Technology Scouting be interweaved within the company?  What organizational forms of Technology Scouting have proven to be effective? 23
  24. 24. Tools for Success: Transforium™ The Transforium™ database is proprietary and unique to Harrison Hayes. The Transforium™ contains over 3,000,000 in-licensing, out- licensing, and transactional opportunities. Transforium™ provides our clients with an additional resource of “off the grid” opportunities. 24
  25. 25. Tools for Success: PIPV™ Our Proprietary Intellectual Property Valuation (PIPV™) service utilizes a proven methodology specifically designed to:  Identify promising compounds.  Provide important market and competitive analysis.  Assess patents and their legal defensibility.  Estimate the likelihood that a specific compound will gain FDA approval.  Perform valuations on individual compounds or entire pipelines. 25
  26. 26. Tools for Success: PIPV™ -Commercial Analysis Harrison Hayes provides independent, third party research designed to maximize the value of identified intellectual property. Harrison Hayes can identify the compounds and targets with the greatest potential for commercial success. Our team members combine expertise from both the scientific and commercial realms of the life sciences industry. 26
  27. 27. Tools for Success: PIPV™ -Financial Analysis Properly valuing assets is paramount to the Fund’s success. Harrison Hayes possesses the valuation experience and domain expertise necessary to accurately assess the value of your products or technologies.  Identify market comparables  Perform quantitative analysis  Assist in development of pro forma financial statements  Calculate "burn rate" and other financial projections  Develop schedules and timelines for product development  Estimate likelihood of milestone success 27
  28. 28. Tools for Success: PIPV™ -Legal Analysis Harrison Hayes can evaluate the legal status of your identified intellectual property.  Investigate all relevant patent initiatives  Assess legal defensibility  Determine overall strength and scope of intellectual property rights 28
  29. 29. Tools for Success: PIPV™ -Feasibility Analysis Harrison Hayes will render an opinion on the feasibility of specific opportunities.  Assess experience and track record of management team  Evaluate development progress and timelines  Perform competitive and substitute analysis  Analyze potential exit strategies 29
  30. 30. BioArbitrage What is BioArbitrage? Who is Harrison Hayes? Harrison Hayes and BioArbitrage The Tools Contact Information 30
  31. 31. www.harrisonhayes.comPhone: 704.906.3402Email: 31