Start Early, Stay Late
Experts from big Pharma and biotech dissect the road ahead for M&As, licensing, and partnerships.
Roundtable ParticipantsIgor Bilinsky, SVP, Corporate Development, Vical Pharmaceuticals
Mike Broxson, Head Global Licensing, Takeda Pharmaceuticals
Christophe Degois, VP, Business Development, Geron Corporation
Doug Fisher, Partner, InterWest Partners
Josh Grass, SVP, Business and Corporate Development, BioMarin
Curt Herberts, Senior Director, Corporate Development & Strategy, Sangamo Biosciences
Ravi Kiron, Entrepreneur in Residence, SRI International
Jason Levin, Chief Business Officer, Sorbent Therapeutics
Gail Maderis, President, BayBio
Kimberly Manhard, Co-Founder and SVP, Ardea Biosciences
Neel Patel, Director, Campbell Alliance
Jim Schaeffer, Executive Director, Business Development, Merck & Co.
Dr. Jay Tung, Chief Research Officer, Myelin Repair Foundation
Samuel Wu, Managing Director, MedImmune Ventures
— William Looney, Editor-in-Chief
PE : Campbell Alliance has conducted its Survey of Dealmaker Intentions for six years, one of the most volatile periods in memory. Three of Pharm Exec's top 20 sales leaders—Wyeth, Schering-Plough and Genentech—have disappeared, along with major realignments in the generics and mid-size biotech sectors. What has been distinctive about the past 12 months and how is this weighing on the current business calculations of pharma companies and the host of new partners emerging in this space?
Neel Patel, Campbell Alliance: Our annual survey, which was conducted early in the first quarter this year, is focused on director-level and above executives engaged in key corporate functions, including executive management and business development. There is a slight bias in the survey toward those who are engaged in out-licensing activities, mainly reflecting the fact that right now there are more companies selling assets than buying. Our geographic scope is primarily the US along with a strong sample from Europe. Companies are a mix of public and private, and range in sales from the billion dollar plus big Pharma players to some micro-cap biotechs with revenue below $5 million. In essence, our data is broadly representative of the dealmaking field, which bolsters our ability to accurately gauge forward-looking sentiment.
Christophe Degois, Geron: Might it also be due to the perception that there are fewer good deals at the later Phase III stage?
Patel: That has been the prevailing view in our Survey for the past two years. But there is a healthy contrarian view among some buyers that a few real gems are still out there waiting to be discovered. What is determinative is value. Most buyers believe that if an asset can provide real evidence of value, it deserves a premium price. It is emblematic of the "de-risking" sentiment that is driving valuations today in the life sciences.
PE: Which therapeutic areas are attracting the most interest among dealmakers this year?
What is interesting this year is the therapeutic category we call "Other." Interest is scaling up in this category, which includes mainly orphan drug assets for a growing list of rare diseases. "Other" also includes ophthalmology drugs, which is a favorite for the high pricing flexibility these give to investors. Overall, virtually every company we surveyed—from the biotech start-up to the big Pharma top 10—now includes orphan drugs as part of its business development and licensing strategy. Another intriguing finding is the continuing interest in cardiovascular and metabolic diseases, despite the intense competition and high costs of the large-scale outcomes trials now being required by registration authorities and payers.
Samuel Wu, MedImmune Ventures: Is the willingness to move earlier to license or acquire oncology assets due to the greater confidence that investors have in the underlying science?
Patel: Yes. Significant progress has been made over the past 10 years in understanding the biology behind tumor formation and metastasis. Diagnostic instruments have advanced considerably. As a result, treatments being developed are more targeted, resulting in a practical progression of survival rates for many individual cancers. Cancer itself is seen increasingly as a collection of rare diseases, which is advantageous to drug developers because it helps concentrate resources.