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Biotechnology in Europe and Elsewhere – an Overview. Simon Smith Partner, Blake Lapthorn Linnell 16 May 2006. European Biotechnology. Employed approximately 73,600 people (82,400 including Switzerland) Had 420 new drugs in clinical development or awaiting approval - PowerPoint PPT Presentation
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Biotechnology in Europe and Elsewhere – an Overview
Simon SmithPartner, Blake Lapthorn Linnell
16 May 2006
European Biotechnology
Employed approximately 73,600 people (82,400 including Switzerland)
Had 420 new drugs in clinical development or awaiting approval
Generated €16.3 billion of revenue Raised €1.3 billion of equity investment in 2003 Formed 100 new companies
European Biotechnology
As in previous years, the UK was the single biggest contributor to this picture. In 2003 the UK sector:
Comprised 455 companies Employed approximately 22,400 people Had 224 new drugs in clinical development or
awaiting approval – half the European total
European Biotechnology
The industry in the UK: Generated £3.6billion of revenue - a 19%
increase over the 2001-2002 period Raised £392 million of equity investment Formed 36 new companies
Korean Biotechnology
Grew from $1.4 billion in 2002 to $1.95 billion in 2004, an average YoY increase of 22.5%
The medical sector accounts for about 60% of Korea’s biotechnology industry
Approximately 600 companies Employ approximately 12,138 people, 54.4%
of who are in R&D, and 45.6% in production
Australian Biotechnology
Approximately 370 biotechnology companies and 600 medical device companies
54 biotechnology firms listed on the ASX Approximately 6000 people employed Market capitalisation of Australian
biotechnology firms listed on the Australian Stock Exchange (ASX) is A$7.132 billion (US$5.439 billion)
Indian Biotechnology
265 firms registered in India, over 75% of which were incorporated in the last five years
The top five companies were homegrown; Indian firms account for 62% of the biopharma sector and 52% of the industry as a whole
Aiming to grow the industry to $5 billion in revenues generated by 1 million employees by 2009
Early stage pharma and biotech alliances
Pharma Biotech
Innovative drugs
New technologies
Capital resources
Clinical development
Regulatory assistance
Manufacturing
Sales & Marketing
Early stage pharma and biotech alliances
Pharma Biotech
Innovative drugs
New technologies
Capital resources
Clinical development
Regulatory assistance
Manufacturing
Sales & Marketing
Combining pharma-biotech expertise
Pharma
Access to technology
Access to products
Biotech/Drug Delivery Company
Discovery/development resources
Commercialisation resources
Combined innovation/value Validation of scientific approach
Leverage time to market
Ability to bring projects forward that could not exist without partnership
Creation of new IP/technology/products
Challenges and Opportunities
Challenges Declining success rates
in new drug development Rising cost of drug
development and commercialisation
Increasing pressure on return
Increasing price sensitivity and growing reimbursement pressures
Greater regulatory scrutiny
Opportunities Rising disease incidence
globally High unmet, medical needs eg
Alzheimer’s, oncology etc.. New technologies for research
and development Expanding success, income
and insurance coverage in key emerging pharma markets
Greater patient engagement in health care decisions
The Market for Early Stage Research Deals
0
200
400
600
800
1000
1200
No. of Drugs
Preclinica
l Phase
I Phase II
Pre-registration
Launched
Recent Novartis early stage deals
Licence Headline value Rights acquired
Arakis & Vectura
April 2005
$15m each upfront. Up to $172.5m each in milestones plus royalties
AD237 which is in Phase II trials as a potential chronic obstructive pulmonary disease treatment
Avanir Pharmaceuticals
April 2005
$2.5m upfront and eligibility for up to $2.5, research funding per year for 4 years plus milestones and royalties with total value of up to $200m
Develop orally active small molecule therapeutics targeting macrophage migration inhibitory factor to treat inflammatory diseases
Hybridon (now called Idera Pharmaceuticals)
May 2005
$4m licence fee upfront and up to $132m based upon achievement of milestones, plus royalties
Develop and commercialise immunomodulatory oligonucleotides that are toll-like receptor 9 agonists
Recent Novartis early stage deals
Licence Headline value Rights acquired
Anadys Pharmaceuticals
June 2005
$20m upfront. Up to $550m in milestones
Agreement covers development, manufacture and commercialisation of ANA975 and additional TLR7 oral drugs
Arrow Therapeutics
June 2005
$25m upfront. Up to $232m, in milestones
Development and commercial sale of A6044 which is a small molecule oral benzodiazepine in Phase II trials for the treatment of respiratory syncytial virus infection
Astex Therapeutics
December 2005
Upfront and deferred equity payments of $25m with up to $520m in fees and equity payments, option payments and milestones
Focuses on 2 experimental onocology drugs of the cell cycle inhibitor family, one in pre-clinical and one in Phase I development
But Bear in Mind Collaboration Can Be a Stepping Stone…
Acquiror Target Headline value Deal
Novartis Alnylam
Pharmaceuticals
Initial payments of approx $56.8m
Develop RNAi therapeutics for pandemic influenza. Collective payments could be over $700m, not including royalties
Pfizer Vicuron $1.9bn Gain access to pipeline of anti-infectives for both hospital-based and community-acquired infections
GSK Covixa $300m Partner for vaccine adjuvants and the development of the oncology product Bezzar for the treatment of non-Hodgkin’s lymphoma
AstraZeneca CAT £75m for 20% stake 5 year discovery initiation phase for a minimum of 25 discovery programmes
Merck licensing strategy results in high value alliances
Licensed products or patents
44% of total sales
2005 Revenues : $22 billion
In addition, through the partnership with Schering-Plough, Merck shares in the profits of ZETIA and VYTORIN sales: $2.4 billion in 2005
Over $9.5 billion, or 44% of Merck’s sales, are attributed to alliance products and patents
Key products: Fosamx Cozaar/Hyzaar Nexium Varivax Recombivax HB
Partnerships - of increasing importance to Merck
# of alliances formed
10
22 23
38
4750
44
0
10
20
30
40
50
60
1999 2000 2001 2002 2003 2004 2005
