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Optimizing Genomics Asset Management for High ROI - Evaluating Strategies to Support the Bio/Pharma Value ChainPublished by: Datamonitor Published: Oct. 5, 2004 - 90 Pages Table of ContentsTABLE OF CONTENTS EXECUTIVE SUMMARY 8 Scope and structure 8 Facta non verba: stock devaluation of innovative players is unavoidable when based on speculation 9 Well diversified and specialized asset portfolios can enhance value 9 Blending options-based asset valuation and unfolding asset complexity with multifactorial structural modeling offers an alternative methodology for genomics valuation 10 CHAPTER 1 THE EVOLUTION OF GENOMICS BUSINESS STRATEGIES 11 Introduction 11 A rising pipeline productivity crisis 11 Transforming the 20th Century’s medicine to 21st Century Biomedicine 12 The evolution of the genomics-oriented sector 13 The genomics value matrix: evolving towards prosperity 13 Two evolution waves: from speculation to depression, realization and diversification 14 The early wave: from speculation to realization 17 Key factors that formed the early evolution wave 19 The early wave of alliance strategies 24 MLNM case study: Genomics assets used to boost integration 27 Bayer case study: Genomics assets not enough to boost growth 31 The early wave of M&A strategies 34 Merck case study: the acquisition of Rosetta 35 The new wave of genomics: investing in diversification 37 Supporting supply chain integration with diversification 38 Adding value through vertical integration - assessing recent deal value 40 Accessing the best opportunities: key recommendations for success in accessing genomics 42 Survival strategies for the horizontal genomics innovators 48 Exit strategies for failed horizontal genomics innovators 59 CHAPTER 2 THE EVOLUTION OF GENOMICS PORTFOLIO VALUATION 63 A novel view on the genomics business valuation landscape 63 What forces the need for exploring new asset valuation methods? 65 Evolving new genomics asset valuation methodologies 68 Revealing the role of complexity in genomics business valuation 73 Introducing a novel structural model to unfold genomics asset complexity 73 Adding more depth to the proposed structural model 77 Evolving the comlex dynamic asset structures 80 Evolving hybrid models: real options plus structural equation 84 CHAPTER 3 APPENDIX 89 Key Strategy team members 89 LIST OF FIGURES Figure 1: Datamonitor’s approach to analyzing the genomics sector 8 Figure 2: NDAs and NMEs approved by the FDA (1996 - 2003) 11 Figure 3: Datamonitor’s Genomics perceived value matrix 13 Figure 4: The evolution of the Genomics’ index share value, January 1999- July 2004 15 Figure 5: The evolution of the Genomics business models according to asset and investment growth 16 Figure 6: The early wave of the Genomics market evolution 17 Figure 7: The key elements of the Genomics business model evolution 19 Figure 8: R&D investment trends of the US publicly traded Genomics sector, 1993-1999 20 Figure 9: Geographic distribution of Genomics firms 21 Figure 10: Genomics patent filing volume trends, 2002 22 Figure 11: Key trends from the early wave of genomics alliances 26 Figure 12: Development of Millennium’s strategic alliances during the early wave of alliances 28 Figure 13: Bayer’s genomics and genomics-related agreements 31 Figure 14: In 2010, Bayer is forecast to derive 71.8% of sales from mature drugs 33 Figure 15: Datamonitor’s Genomics’ Index for the new wave of innovation, 2002-04 37 Figure 16: The new wave of genomics assets and their contribution to the biopharma supply chain 38 Figure 17: Adding value through vertical integration: analysis of 12 recent genomics alliances by value 41 Figure 18: Key trends extracted from the new wave of alliances 44 Figure 19: Key trends extracted from the new wave of genomics M&A deals 50 Figure 20: Key extracted trends from the new wave of chemogenomics alliances 54 Figure 21: Key extracted trends from the new wave of pharmacogen-omics/enetics alliances 58 Figure 22: How realization and integration moves closer to capitalization 59 Figure 23: Nuvelo’s (merger of Hyseq and Variagenics) historical share prices 1999-2004 61 Figure 24: A generalized view on the genomics business landscape 64 Figure 25: Schematic representation of the main biotech asset valuation methods according to their ability to extract critical asset information for high ROI and the size of risk tolerability that they can undertake 70 Figure 26: Real options decision making in genomics value chain 72 Figure 27: Datamonitor’s multidimensional approach in revealing the key elements that govern the valuation of each genomic asset. 73 Figure 28: Increasing depth in the asset valuation model using a number of sub-elements to support the basic ten-elements structural model of Datamonitor Genomics Success Index 77 Figure 29: Applying variation in genomics assets evolution to achieve high ROI 81 Figure 30: Applying variation in genomics assets evolution to achieve high ROI 83 Figure 31: The dynamics of biotech innovation: from a tendency towards high-ROI asset clusters within the biotech business model to the formation of biotech company clusters 84 Figure 32: Evolving the “fittest” assets or identify your competitor’s advantages 85 Figure 33: Datamonitor’s Genomics Success Index linked to real option methodology 86 Figure 34: Evaluation of each stage of the option decision process during a genomics-driven drug development project 87 AbstractIntroductionThe need to overcome the pharma industry's pipeline productivity crisis is forcing the genomics innovators and their partners to reshape their portfolio management. New asset allocation strategies and valuation methodologies are needed to support the evolution to a new business model emphasizing investment in technological diversification. Scope Insight into the dynamics of the genomics sector, as it diversifies to meet the challenge of the evolving bio/pharma supply chain Survival strategies for potential postgenomics drug developers and successful exit strategies for failed genomics businesses Novel portfolio management and option based asset valuation to support postgenomics drug developers, genomics licensees and innovators Highlights The early wave of the genomics revolution witnessed a spectacular stock value decline. This was caused by the lack of transparency between the industry's innovating, investing and licensing arms, and by a high degree of speculation related to unrealistic market generation targets and lack of understanding of the technological complexities. The new wave of innovation is focusing on gene functionalities, population genomics, chemo- and pharmacogenomics. Drug developers should continue integrating well-defined genomics assets into their supply chains, work to maximize successful target validation and optimize alliance networks to ensure asset co-evolution and diversification. Conventional discount flow-based asset valuation cannot describe the complexity of each genomics asset. Therefore, blending quantitative real option based and qualitative multifactorial asset analysis models can offer flexible long-term asset allocation and a number of capital growth opportunities hidden in genomics assets. Reasons to Purchase Understand the dynamics behind the early genomics devaluation, and develop winning business survival and successful postgenomics exit strategies Gain insight into how the new wave of genomics diversification helps the bio/pharma supply chain to recover from its current productivity crisis Improve genomics project valuation by combining novel multidimensional asset analysis for less supply chain complexity, with real option based methods Get Full Details About This Report >> |
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