Dealmaking and Financing: Buying in Innovation

Published by: Decision Resources

Published: Mar. 6, 2008 - 48 Pages

Table of Contents

Executive Summary

Strategic Considerations

Stakeholder Implications

Introduction

Industry Pressures Continue to Mount

Increasing Regulatory Oversight and Delay

Increasing Development Costs and Productivity Problems

Patent Expiry and Generics Competition

Expected Disruption from Biogenerics

Externalization: Accessing Innovation and Fostering Drug Discovery

New R&D Model

Using Corporate Venturing to Access Innovation

Innovation Incubators to Foster Drug Discovery

Value-Building Opportunities

Acquiring Innovation, 2000-2007

Product Deals

Recent Inlicensing Activity, 2005-2007

Leading Companies in Late-Stage Product Inlicensing, 2005-2007

Big Pharma’s Inlicensed Product Deals

GlaxoSmithKline Inlicensed Products Across Several Disease Indications

AstraZeneca Accelerates Its Biologics Strategy

Novartis Employs Very Creative Deal Structures

Pfi zer Restructures and Emphasizes External Opportunities

Merck & Co. Looks to Small Company Acquisitions

Johnson & Johnson Shares Know-How with Smaller Companies

Schering-Plough in a Major Turnaround But Still Does Business

Sanofi -Aventis, a Leading Pipeline for the Future

Eli Lilly and Company’s Recent Acquisition and New Inlicensing Activity

15 Recent Trends Infl uencing Pharma’s Dealmaking Landscape

Spectrum Expert Commentaries:

Corporate Venturing: A Cure for Pharma’s Innovation Ills?

Capturing Additional Value in Drug Discovery and Development

Experts Featured:

Graeme R. Martin, Ph.D., president and chief executive offi cer, Takeda Research Investment, Inc.

Jeff Morhet, chairman and chief executive offi cer, InNexus Biotechnology, Inc.

Tables:

1. Patent Expiries in Major Markets of the 10 Top-Selling 2006 Blockbusters

2. Impending Patent Expiries for Select Biologics

3. Select GlaxoSmithKline Inlicensed Late-Stage Product Deals, 2007

4. Select AstraZeneca Inlicensed Late-Stage Product Deals, 2007

5. Select Novartis Inlicensed Late-Stage Product Deals, 2006-2007

6. Select Pfi zer Inlicensed Late-Stage Product Deals, 2005-2007

7. Select Merck & Co. Inlicensed Late-Stage Product Deals, 2006-2007

8. Select Johnson & Johnson Inlicensed Late-Stage Product Deals, 2005-2007

9. Select Schering-Plough Inlicensed Late-Stage Product Deals, 2006-2007

10. Select Sanofi -Aventis Inlicensed Late-Stage Product Deals, 2006-2007

11. Select Eli Lilly and Company Inlicensed Late-Stage Product Deals, 2007

Figures:

1. Acquiring Innovation

2. Trends in Original NDAs, BLAs, and NMEs Submitted to the FDA, 2002-2006

3. Number of Products Involved in Deals, 2000-2007

4. Product Dealmaking Activities Between Companies, 2000-2007

5. Phase of Development of 831 Inlicensed Products, 2005-2007

6. Categories of Inlicensed Products in Late-Stage Deals, 2005-2007

7. Companies That Lead in Late-Stage Product Inlicensing, 2005-2007

Expert A: Licenses and Options Executed by Start-Up, Small, and Large Companies: Exclusive vs. Nonexclusive, 2006

Abstract

• The near-term outlook for the pharmaceutical industry is not encouraging. What is pharma’s new externalized R&D business model, and why is it important?
• Patent expiries and disruption from biogenerics are two of the biggest concerns looming in the industry right now. What are companies doing to improve the outlook for their productivity and performance? What are the most efficient strategies for building value now? How do these strategies make drug development more successful?
• Pharma is currently in an innovation deficit. What vehicles are in play for accessing innovation, and what trends are developing?
• Strategic opportunities such as licensing and partner deals among big pharma, biotech, and specialty pharmaceutical companies are driving pipeline development. What are the latest dealmaking strategies? What are some of the big alliance deals already in motion?

• Expert commentaries: analysis of corporate venturing and value-added drug development by two industry experts.
• Mounting industry pressures: increasing regulatory oversight; rising development costs and productivity problems; looming patent expiries; generics competition; and disruption from biogenerics.
• Externalization trends in business practices: a new R&D model; corporate venturing and innovation incubators to gain access to early-stage innovation.
• Value-building opportunities: harnessing external innovation to improve a product’s characteristics; chemical modifi cation as a value-building opportunity.
• Acquiring innovation: a look at 4,030 products involved in product deals from 2000-2007; fortifying pipelines via deal structures for product acquisition, inlicensing, outlicensing, and joint ventures; late-stage product inlicensing trends, 2005-2007.
• Big pharma’s inlicensed product deals: pharmaceutical companies tap new resources by inlicensing late-stage products; inlicensed product portfolios of nine major pharmaceutical companies; strategies used by different companies.
• Recent dealmaking activities:an analysis of 15 trends influencing the drug licensing landscape.

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