Pullan’s Pieces
Business and Science for BD & others
#67, January 2012
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HAPPY NEW YEAR!
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Visions of a grand biotech future?
At the beginning of a New Year, it is fun to think of 3 stages of biotech.
o It was possible to raise big VC money on nothing but a story, and to grow a big company like Amgen from scratch,
o Blockbusters were more common despite our lesser scientific understanding, and
o Pharma companies were highly profitable, respected, and productive entities.
(This view of the past combines a lot of time and does have the rosiness of nostalgia!)
o It is hard to find start-up capital,
o Genomics has increased our scientific understanding but not our drug success rate,
o Regulatory and reimbursement hurdles can seem absurdly high,
o Pharma growth is neglible and R&D productivity low, and
o Blockbusters such as Lipitor are going generic.
o But what if structural biology and computational chemistry (like that done by client Zenobia Therapeutics) really cuts the cost and time of drug lead design?
o What if use of cells and morphology can really identify on- and off-target effects early (as indicated by the work of ACEA and others)?
o And if outsourcing really brings expertise and reduces the costly burden of infrastructure?
o If the tools of “personalized medicine” do lead to higher success in predicting who will benefit from the drugs?
We can imagine the extrapolation of trends already here adding up to make R&D faster and more reliable, and the drugs more effective.
It could be a very exciting future, whenever it gets here!
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New Teva CEO is former deal maker for BMS – what will change?
Jeremy Levin is becoming CEO of Teva upon leaving BMS where as Sr. VP of Strategy, Alliances and Transactions, he is credited with a “string of pearls” acquisition strategy. http://www.businessweek.com/news/2012-01-03/departure-of-bristol-s-deal-strategist-to-teva-leaves-a-hole.html
But Teva has also been an active deal maker, with my count showing them doing more deals (including the acquisition of Cephalon) and spending more money than BMS.
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BMS
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Teva |
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# M&A 2008-2011
|
5 |
6 |
|
$in M&A |
$3.4B |
$20.8B
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Acquired big growth products |
Yervoy from 2009 Medarex acquisition, Eliquis from 2001 Dupont acquisition
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Copaxone from the Weitmann Institute in 1987, now declining in sales |
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# Licensing deals 2010-2011
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8 |
17 |
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Sum of announced totals |
$1.5B |
$2.2B |
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|
|
|
It is early to know if all of these are good deals. The big near-term growth at BMS is likely to come from Eliquis, the factor Xa anti-coagulant that was part of the Dupont acquisition in 2001. But Yervoy, the anti-CTLA4 antibody for melanoma from the 2009 Medarex acquisition, is expected to also do big sales in the near term. The other big growth products for the near term primarily come from BMS research (Sprycel for CLL, Onglyza for diabetes, and Orencia for rheumatoid arthritis).
Meanwhile, Teva sales are heavily dependent on the aging Copaxone for MS, which came from the Weizmann Institute, accounting for a third to half of the profit.
Although Teva’s deal total is high, most of their licensing deals do not have announced values, despite many of them being at clinical stages.
I’d speculate that the nature of the deals may change a bit at Teva, with Levin showing a bigger push for “big-impact” innovative candidates such as Yervoy.
Barclay’s thinks Levin will bring continued acquisitions to Teva with a focus in oncology. http://www.globes.co.il/serveen/globes/docview.asp?did=1000712442
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A glass half-full and the need for optimism
Meanwhile, 58% of VCs predict fewer investments in biopharma and medical device businesses in 2012. CEOs are more optimistic. http://www.nvca.org/
This made me think about the expectations and the reality of biotechs.
None of this is new; the numbers may have fluctuated, but the odds are always stacked against a young startup. Biotech and biotech partnering require eternal optimism and passion. But the wins are big and important to the world. It is a great industry!
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Free Webinar on getting ready for partnering
I’m doing a webinar on the basics of getting ready for partnering (out-licensing). We will talk a bit on the pros and cons of partnering, valuation, negotiation prep and term sheets. The webinar is Jan 19th, 11:00am PDT/2:00pm EDT, hosted by ShareVault. Put it on your calendar and watch for more details!
www.sharevault.com/webinars.htm
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See you at the next meeting?
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Linda Pullan
4400 Paseo Santa Rosa, Newbury Park, CA 91320
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