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Option & Evaluation Agreements in Pharma and Biotech

Published by: CurrentPartnering

Published: Mar. 1, 2009 - 399 Pages


Table of Contents


Executive Summary


Chapter 1 - Introduction


Chapter 2 - Trends in option and evaluation dealmaking


2.1. Introduction

2.2. Difference between option and evaluation deals

2.2.1. Types of option agreement

2.3. Trends in option/evaluation deals since 2000

2.4. Co-promotion options

2.4.1. Attributes of co-promotion in multi-component deals

2.4.2. Reasons for including co-promotion options in a deal

2.4.3. Uptake of co-promotion rights

2.4.4. Co-promotion rights as bargaining chips

2.4.5. The future of co-promotion as part of multicomponent deals

2.5. Company acquisition options

2.5.1. Case study 1: Cephalon - Ception - January 2009

2.5.2. Case study 2: Endo - Indevus - January 2009

2.5.3. The future of option to acquire

Chapter 3 - Overview of option and evaluation deal structure


3.1. Introduction

3.2. Evaluation agreement structure

3.2.1. Example evaluation agreements

3.2.1.a. Case study 3: BioGenerix - Neose - January 2005

3.3. Option agreement structure

3.3.1. Example option agreements

3.3.1.a. Option to license

Case study 4: GlaxoSmithKline - Regulus Therapeutics - April 2008

3.3.1.b. Option to extend/expand applications/territories

Case study 5: Salix - Dr Falk - April 2007

3.3.1.c. Option to finance

Case study 6: Merck KgaA - Archemix - June 2007

3.3.1.d. Option to co-promote

Case study 7: Novartis - Anadys - June 2005

3.3.1.e. Option to manufacture/supply

Case study 8: NPS Allelix - Nycomed - July 2007

3.4. Option to acquire agreement structure

3.4.1. Example acquisition option clauses

3.4.1.a. Case study 9: MGI Pharma - AkaRx - October 2007

3.4.1.b. Case study 10: Abbott - Ibis Biosciences - Isis Pharmaceuticals - January 2008

Chapter 4 - Leading option and evaluation deals


4.1. Introduction

4.2. Top partnering deals incorporated an option clause by value

4.3. Bigpharma option deal activity

Chapter 5 - Bigpharma option and evaluation agreements


5.1. Introduction

5.2. How to use option/evaluation agreements

5.3. Company option and evaluation agreement listings

Abbott

Actavis

Alcon Labs

Allergan

Amgen

Astellas

AstraZeneca

Barr

Baxter International

Bayer

Biogen Idec

Boehringer Ingelheim

Bristol-Myers Squibb

Chugai

CSL

Daiichi Sankyo

Eisai

Eli Lilly

Forest Laboratories

Genentech

Genzyme

Gilead Sciences

GlaxoSmithKline

Johnson & Johnson

King

Lundbeck

Menarini

Merck & Co

Merck KGaA

Mitsubishi Tanabe

Mundipharma

Novartis

Novo Nordisk

Nycomed Pharma

Otsuka

Pfizer

Procter & Gamble

Ratiopharma

Roche

Sanofi-Aventis

Schering Plough

Servier

Shire

Solvay

Stada

Takeda

Teva

UCB

Watson

Wyeth

Chapter 6 - Option and evaluation agreement directory 2003-8


6.1. Introduction

6.2. Company A-Z

6.3. Deals by type

Acquisition

Co-development

Co-marketing

Co-promotion

Evaluation

Extension

Financing

Licensing

Marketing

Supply

6.4. Deals by stage

Discovery

Preclinic

Phase I

Phase II

Phase III

Regulatory

Marketed

Formulation

6.2. Deals by therapy

Cardiovascular

Central Nervous System

Dermatology

Gastrointestinal

Genitourinary

Hematology

Hormonal

Immunology

Infection

Inflammation

Metabolic

Musculoskeletal

Oncology

Ophthalmic

Respiratory

Delivery

Appendices


Appendix 1 - Option/evaluation references

Appendix 2 - Resources

Appendix 3 - Deal type definitions

Appendix 4 - Example M&A option contract document

Appendix 5 - Example option partnering contract document

About CurrentPartnering

TABLE OF FIGURES


Figure 1: Definition of option and evaluation

Figure 2: Types of option right

Figure 3: Trends in option/evaluation deal announcements, 2000-2008

Figure 4: Option/evaluation deals signed at each phase of development, 2000-2008

Figure 5: Example deals where co-promotion options have been actively exercised, since 2000

Figure 6: Recent ‘option to acquire’ deals

Figure 7: Components of the evaluation deal structure

Figure 8: Types of option in an agreement

Figure 9: Attributes of option terms:

Figure 10: Top 25 partnering deals incorporating an option/evaluation clause by value since 2000

Figure 11: Bigpharma - top 50 - option deals since 2003

Figure 12: Online partnering resources

Figure 13: Deal type definitions

Figure 14: Option for M&A agreement between Abbott Molecular - Isis Pharmaceuticals - Ibis Biosciences - January 2005

Figure 15: Option in partnering agreement between Array Biopharma - Celgene - September 2007

Abstract

The Option and Evaluation Agreements in Pharma and Biotech report provides comprehensive understanding and unprecedented access to the option and evaluation partnering agreements entered into by the worlds leading biopharma companies.

This report provides details of the latest option and evaluation agreements announced in the pharmaceutical and biotechnology sectors. Detailed and comprehensive, the report provides details of option and evaluation agreements from 2003 to end 2008.

The report provides a detailed understand and analysis of how and why companies enter option and evaluation deals. The majority of deals are option agreements whereby one party to the agreement obtains an option right from the other party.

Understanding the flexibility of a prospective partner’s negotiated deals terms provides critical insight into the negotiation process in terms of what you can expect to achieve during the negotiation of terms. Whilst many smaller companies will be seeking details of the payments clauses, the devil is in the detail in terms of how payments are triggered - contract documents provide this insight where press releases and databases do not.

This report contains over 400 links to online copies of actual option and evaluation contract documents as submitted to the Securities Exchange Commission by pharma/biotech companies and their partners.

Contract documents provide the answers to numerous questions about a prospective partner’s flexibility on a wide range of important issues, many of which will have a significant impact on each party’s ability to derive value from the deal.

The initial chapters of this report provide an orientation of option and evaluation dealmaking and business activities. Chapter 1 provides a brief introduction to the report, whilst chapter 2 provides an analysis of the trends in option and evaluation as well as a discussion on the merits of each type of deal.

Chapter 3 provides an overview of the structure of option and evaluation deals. The chapter includes numerous case studies to enable understanding of both option and evaluation deals where partnering or acquisition is the primary focus of the agreement.

Chapter 4 provides a review of the leading option and evaluation deals since 2000. Deals are listed by headline value and most active bigpharma. Where the deal has an agreement contract published at the SEC a link provides online access to the contract.

Chapter 5 provides a comprehensive listing of the top 50 bigpharma companies with a brief summary including option and evaluation frequency followed by a comprehensive listing of option and evaluation contract documents available in the public domain. Each deal title links via Weblink to an online version of the actual contract document, providing easy access to each contract document on demand.

Chapter 6 provides a comprehensive listing of all option and evaluation agreement contracts available in the public domain, respectively. The chapter is organized by A-Z company name, option/evaluation type, therapy area and stage of development at signing. Each deal title links via Weblink to an online version of the actual contract document, providing easy access to each contract document on demand.

Key benefits

Option and Evaluation Agreements in Pharma and Biotech provides the reader with the following key benefits:
  • In-depth understanding of option and evaluation deal trends since 2000
  • Analysis of the structure of option and evaluation agreements with numerous real life case studies
  • Comprehensive access to over 400 actual option and evaluation contracts entered into by the world’s biopharma companies
  • Detailed access to actual option and evaluation contracts enter into by the leading fifty bigpharma companies
  • Insight into the terms included in a option and evaluation agreement, together with real world clause examples
  • Understand the key deal terms companies have agreed in previous deals
  • Undertake due diligence to assess suitability of your proposed deal terms for partner companies


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