More Related Content Similar to Early asset development and commercialization: Partnering for success (20) Early asset development and commercialization: Partnering for success2. Ā© CELLO HEALTH 2
Introduce Cello Health
Discuss Early Asset Development
and Commercialization
Discuss Partnering Arrangements
3. Ā© CELLO HEALTH 3
INSIGHT
CONSULTING
COMMUNICATIONS
Cello Health services
the global
pharmaceutical,
biotechnology and
health sectors
World class
Market research
Strategic Consulting
Medical and scientific
knowledge
With over 400 professionals
world-wide, Cello Health brings
together three core capabilities of
market research, strategic consulting
and scientific communications.
4. Ā© CELLO HEALTH 4
There are almost
4,000 Pharma
and Biotech
companies
worldwide
1,198
1,313
1,503
1,576
1,621
1,633
1,769
1,965
2,084
2,207
2,387
2,705
2,745
2,984
3,286
3,687
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2001 2006 2011 2016
Numberofcompanies
Source: Pharmaprojects, January 2016
Ā»The US remains the largest pharmaceutical market, housing 48% of pharmaceutical companies worldwide
Total number of companies worldwide
with active pipelines 2001ā2016
48%
17%
12%
3%
5%
4%
4%
3%
3% 1%
Distribution of R&D companies by
HQ country / region in 2015 and 2016
48%
17%
12%
3%
5%
4%
4%
3%
3% 1%
USA Rest of Europe
Rest of Asia Pacific China
UK Canada
Japan Germany
France C and S America
48%
18%
9%
4%
5%
4%
3%
3%
3% 2%
2015
2016
57% have only
1 or 2 drugs in
their pipelines
5. Ā© CELLO HEALTH 5
Source: EY, BioCentury, Capital IQ and VentureSource
0
2
4
6
8
10
12
0.0
0.5
1.0
1.5
2.0
2.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Averagedealsize(US$m)
Totalamountraised(US$bn)
Total amount raised Average deal size
Which is driving
an increase in
venture funding
Source: Biotechnology Industry
Report 2015: Beyond Borders
Reaching New Heights by EY
US Venture Capital
0
3
6
9
12
15
18
0
1
2
3
4
5
6
7
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Averagedealsize(US$m)
Capitalraised(US$bn)
Total amount raised Average deal size
Source: EY, BioCentury, Capital IQ and VentureSource
EU Venture Capital
6. Ā© CELLO HEALTH 6
Source: Biotechnology Industry Report
2015: Beyond Borders Reaching New
Heights by EY
And has resulted
in some
companies
demonstrating or
creating very high
perceived value
Celator Parlays
Leukemia Drug
Data into $1.5B
Buyout From Jazz
Pharma
Xconomy New York
All it takes to become an acquisition
target in biotech is some promising
data. Take Ewing, NJ, and Vancouver-
based Celator Pharmaceuticals, which
Jazz Pharmaceuticals just agreed to
buy this morning for $1.5 billion
Companies that do not have marketed
products but have achieved market caps
over $1bn
There is a buzz
(and lots of
investment)
in these companies
7. Ā© CELLO HEALTH 7
Putting even
more pressure
on realizing value
Biotech Stock Mailbag:
Sarepta! Always More
Sarepta. And Gilead, Too
TheStreet's Adam Feuerstein answers reader
questions about biotech stocks.
8. Ā© CELLO HEALTH 8
How do you
realize the value
from the asset?
Understand the source of value
āŖ scientific
āŖ clinical
āŖ commercial
Manage value actively
Know your limitations
āŖ financially
āŖ operationally
9. Ā© CELLO HEALTH 9
The sources
of value
Scientific
difference
Patient /
clinical
need
Commercial
relevance
3
Variables
10. Ā© CELLO HEALTH 10
Clinical
Physician acceptance
Medical relevance
TPP (Target
Product Profile)
PDUFA (regulatory
success)
Scientific feasibility
Novel MOA
Value Source
Addresses unmet need
Patient acceptance
Payer policy
PatientCommercial
Revenue Potential
Growth potential
Anticipated market
access
Reimbursability
Competitive
differentiation
Market position
Value is derived
from all three
sources
11. Ā© CELLO HEALTH 11
Launch
And has to be
managed across
the early asset
development
process
āŖ Does this asset fit a gap
in our portfolio?
āŖ Can this asset be
developed for success?
āŖ What is the value
proposition?
āŖ What is the proof of
concept?
āŖ What is the market
opportunity?
āŖ What are the
commercial endpoints?
āŖ What are the clinical
endpoints?
āŖ Does the market
understand the value
proposition?
āŖ Have the clinical and
commercial endpoints
been met?
āŖ Epidemiology Models
āŖ High Level Forecast
āŖ Value Proposition
āŖ Target Product Profile
āŖ Epidemiology Models
āŖ High Level Forecast
āŖ Proof of Concept
āŖ Value proposition
āŖ Commercial Endpoints
āŖ Forecast and Valuation
āŖ Investment Strategy
āŖ Market Assessment
āŖ Payor Acceptance
āŖ Target Product Profile
āŖ Competitive Positioning
āŖ Forecast and Valuation
āŖ Launch Readiness
āŖ Go to Market Plan
āŖ Pricing Strategy
āŖ Unmet Need
āŖ Early Economic Models
āŖ Clinical Endpoints
āŖ Burden of Disease
āŖ Clinical Endpoints
āŖ Early Economic Models
āŖ Patient Need
āŖ Clinical/PRO Endpoints
āŖ Core Economic Model
āŖ KOL Engagement
āŖ Evidence Gap Analysis
āŖ Target Product Profile
āŖ Disease Awareness
āŖ HEOR Evidence
āŖ Stakeholder Mapping
āŖ Market Models
āŖ Patient Segmentation
Asset
Identification or
Acquisition
Phase I Phase IIA and IIB Phase III
Key value
questions
Commercial
Clinical
12. Ā© CELLO HEALTH 12
$200
$400
$600
$800
$1,000
Totalpotentialvalueofcompound(US$mn)
Define
weak TPP
Inadequate
Value
Proposition
Pick wrong
opportunity
Ineffectively
communicate
value and
endpoints
Select wrong
payer targets /
poor cost benefit
Late
market
preparation
Underfunded
Commercialization
We must make
earlier critical
decisions.
Poor decisions
can lead to
significant loss
in value
Full exploration of the future
landscape and patient environment
Strong clinical relevance
Deep foresight into customers needs
of the future
Compelling Value Proposition
Clinical and health outcomes align
and support commercial strategy
Discovery
Pre- clinical
development
Clinical development
Pre-
launch
13. Ā© CELLO HEALTH 13
For those that
canāt make it
alone, there are
options, either
beforeā¦
11.8
18.1
52.7
46.7
123
7.6
5.6
6.7
10.5
14.2
10.8
13
7.2
14.6
58.9
1.2
19.5
3.7
0.4
0.7
0.2
3.3
0.4
6.3
US$0 US$50 US$100 US$150 US$200 US$250
Q1 2016
Q4 2015
Q3 2015
Q2 2015
Q1 2015
Deal value (US$ bn)
Total closed deal value by industry sector (Q1 2015 ā Q1 2016, US$ bn)
Source: PWC Pharmaceutical and Life
Sciences Deals Insights Quarterly
Reports (2Q 2015 ā 1Q 2016)
13
32
24
24
19
10
13
14
11
11
11
20
15
8
11
2
7
11
3
2
3
3
2
4
0 10 20 30 40 50 60 70 80
Q1 2016
Q4 2015
Q3 2015
Q2 2015
Q1 2015
Number of deals
Total closed deal volume by industry sector (Q1 2015 ā Q1 2016, US$ bn)
123 14.2 58
US$0 US$50 US$100 US$150
Q1 2015
Deal value (USD (bn
Pharmaceuticals Biotechnology
Medical devices Diagnostics
Services
Thomson Reuters numbers may not
equal exact total due to rounding
14. Ā© CELLO HEALTH 14
0
10
20
30
40
50
60
0
15
30
45
60
75
Numberofdeals
Potentialvalue(US$bn)
Pharma-biotech Biotech-biotech
Pharma-biotech megadeals (>US$ 5bn) Biotech-biotech megadeals (>US$ 5bn)
Number of deals
Or after success
US M&As, 2007ā2014
2007 2008 2009 2010 2011 2012 2013 2014
Source: EY, Capital IQ, Medtrack and
company news
Chart excludes transactions where
deal terms are not publicly disclosed
15. Ā© CELLO HEALTH 15
Investment and timing
Assetvalue
Or you can always
find a partner
Option
out License out
Commercial
partner
Development
partner
Go
it alone
Low Med High
LowMedHigh
17. Ā© CELLO HEALTH 17
Options to
consider Each scenario will drive a unique set of strategies for growth
High InfluenceLow Influence
Option
Type Go it Alone
Development
Partner
Commercial
Partner
Sell
Out
Factor
Time to commercialization
Competitive dynamics
Revenue realization
Investment needed
Infrastructure development
Valuation
18. Ā© CELLO HEALTH 18
Agreement covers R&D funding of collaboration
as well as marketing rights
R&D Collaboration,
Marketing & LicensingTypes of
partnering
arrangements Marketing rights granted; agreement does not involve
significant further product R&D
Marketing & Licensing
Acquisition of shares included within dealEquity Investment
Two or more partners market product in the same territory
under separate or same brand names
Co-Marketing /
Co-Promotion
Joint ownership of a new entity by partnersJoint Venture
Companies acquire exclusive rights to a product. In a swap,
Company A gets rights to a product owned by Company B;
at the same time, B gets rights to a product from A
Product Acquisition /
Product Swap
One partner performs manufacturing for another or agrees
to supply a product to the other
Manufacturing / Supply
Contract manufacturing, distribution, sales
Contractual
Relationships
19. Ā© CELLO HEALTH 19
TOP
OPTIONS
Understand
partner market
Overall
ā Understand relative
attractiveness of
company
Company specific
analysis
ā Market, financial,
development,
commercial
Partner options
ā License, acquisition
Establish
screening
criteria for
partners
Establish absolute and
relative importance of
multiple financial,
regulatory, scientific
variables in evaluating
partner potential
Set decision
drivers
for partnering
On a company by
company basis evaluate
high potential partners
Partnering
evaluation
process
Sellerās perspective
20. Ā© CELLO HEALTH 20
Orphan drug
example
Buyerās perspective
The opportunity
for partnering
15*
Total drugs under
development
Phase I-III orphan
drugs under
development
Phase II orphan
drugs under
development
Possible fit
with portfolio
17556016,662
21. Ā© CELLO HEALTH 21
Screening criteria
for partners
Other reward factors Other risk factors
Strategic Fit
Capability fit
Business fit
Market attractiveness
Potential size
Ease of entry
Financial potential
Estimated payoffs and NPV
Partner Capability
Breadth of functions and
reach
Regulatory climate
Standards
Ease of approval
Ability to execute
Internal capabilities
External capabilities
Competition
Market saturation and
size of players
Failure rates
Failure rates of similar
ventures / Cost of failure
Reward
Factors
Risk
Factors
6 5 4 3 2 1
Hi
Hi
1 2 3 4 5 6
6 5 4 3 2 1
Hi
Hi
1 2 3 4 5 6
6 5 4 3 2 1
Hi
Hi
1 2 3 4 5 6
6 5 4 3 2 1
Hi
Hi
1 2 3 4 5 6
6 5 4 3 2 1
Hi
Hi
1 2 3 4 5 6
22. Ā© CELLO HEALTH 22
Market leadershipNot player
Established
leader
Financial strengthWeak AAA+
Distribution and deliveryNo capability Full capability
Competitive positioningMinor Major
Ability to penetrate multiple countriesOne country All targeted
Knowledge of marketNone Strong
Decision
drivers for
partnering
Based on
capabilities and
needs
23. Ā© CELLO HEALTH 23
Market leadershipMinor player
Established
leader
Financial strengthWeak AAA+
Distribution and deliveryNo capability Full capability
Competitive positioningMinor Major
Ability to penetrate multiple countriesOne country Global
Knowledge of marketNone Strong
Decision
drivers for
partnering
Evaluate the
candidates and
structures in depth