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Kusuri Medicine:
Surviving the Cliff
Demetri Greco
Colin Hussey
Cyrus Johannes
Nicholas Norris
Our Team
Colin Hussey Cyrus Johannes
Demetri Greco Nicholas Norris
Agenda
• Round 1 Overview
• Implementation Timeline
• The Merger
• The Launch Plan
• Potential Risks
• Financial Analysis
Nicholas Norris
Round 1
Overview
Kusuri Medicines
$21.4B Revenue
10th Globally in 2014
Active Pipeline
Facing the Patent Cliff
Nicholas Norris
Our Proposed Solution
Nicholas Norris
Acquire specialty
biologics manufacturer
Use Kusuri’s scale to
amplify the drug launch
Move into the specialty
biologics space
7/10
Biologics in the
top 10 overall
sellers (2014)
$6.6B
Average revenue
per year from
biologics (top 20)
$200B
Biologics market
size in 2014
9%
Predicted CAGR
Until 2024
Biologics
Market at
a glance
0
50
100
150
200
250
300
350
400
450
500
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Potential Growth of Market for Biologics
(in Billions of USD)
Nicholas Norris
Why Biologics?
Timeline
Nicholas Norris
Contingency agreement
FDA approves NDA
End 2015Mid 2015
Contingency paid
Early 2016
Launch of new IBD drug
Early 2016
SG&A downsize
due to synergy
Mid 2018
The Merger
The Deal
Nicholas Norris
$1.2B
$1.7B
Merger agreement reached
$1.2B cash payment
$100 per share
$500M contingent
$41.5 per share in a CVR
I
II
III
Personnel Integration Targets
Demetri Greco
Retention of key employees
Employee selection and downsizing
Compensation strategies
Creation of new policies
Information Systems Integration
Reduce Information System staff
Consolidate data centers
Establish efficient,
enterprise-wide
systems
Demetri Greco
Impacts on R&D
Demetri Greco
Industry decline in R&D
productivity rates
Acquire to replenish
current pipeline
Reallocate R&D expenses
The Launch
Plan
Insurance Company Relations
Colin Hussey
Negotiating
Rebates – 20%
Preferred
Status
Clinical
Benefits
6% Price Increase
Per Year
Pricing
Colin Hussey
Regular
Wholesale
$5,000
Per Package
Per Month
Volume-Based
Discounts
Insurance
Rebates
Marketing
Colin Hussey
Detailing to Professionals
Continuing Education
Multimedia Ad Campaign
Distribution
Colin Hussey
Specialty Distributor
2nd Largest Globally
Advanced Capabilities
Personalized Handling
Increased Costs
Potential Risks
Risk: Underperforming
Cyrus Johannes
Exaggerated Clinical
Benefits
New Uses
New Competitors
Emerging
Risk: Failing Clinical Trials
Cyrus Johannes
$1.1B Average Loss
BiomarkersBiomarkers
Companion Diagnostics
$12.543B
Varied
Uses
Serious
Infection
21%
Remission
Cyrus Johannes
Risk: Established Competitors
Risk: Status on Formularies
Cyrus Johannes
Patients try preferred before non-preferred
Cyrus Johannes
Risk: Limited Credibility
Efficacy Safety
Credibility
Risk: Employees Leaving
Cyrus Johannes
Financial
Analysis
Revenues
Colin Hussey
0
2
4
6
8
10
12
14
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
BillionsofUSD
Insulinog & Steady Glucose Other Products
Revenues
Colin Hussey
0
2
4
6
8
10
12
14
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
BillionsofUSD
Acquired Company Revenue IBD Biologic Oncology Biologic
Revenues
Colin Hussey
0
5
10
15
20
25
30
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
BillionsofUSD
Net Revenue without Acquisition Net Revenue with Acquisition
Expenses
Colin Hussey
0
0.5
1
1.5
2
2.5
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
BillionsofUSD
Kusuri's R&D Biologic's R&D
Expenses
Colin Hussey
0
2
4
6
8
10
12
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
BillionsofUSD
Selling General & Administrative
Expenses
Colin Hussey
0
2
4
6
8
10
12
14
16
18
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
BillionsofUSD
Costs of Products Sold
Net Income
Colin Hussey
-5
0
5
10
15
20
25
30
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
BillionsofUSD
Revenue Expenses Net Income
Net Present Value
Colin Hussey
$1.7B
Investment
R&D
returns
3.5%
NPV of $13B
S&P returns
11.67%
NPV of
$6.4B

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Editor's Notes

  1. https://www.ncbi.nlm.nih.gov/pubmed/17470824