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Biotech Mergers & Acquisitions: Strategies, Perspectives & Case Studies

Learn about partnering, mergers, and acquisitions in biotechnology with practical insights from Columbia University GSAS BIOT 4180. Explore the dynamics of small and large companies, successful deals like Roche-Genentech, and negotiation tactics.

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Biotech Mergers & Acquisitions: Strategies, Perspectives & Case Studies

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  1. Entrepreneurship in Biotechnology Columbia University Graduate School of Arts and Sciences BIOT 4180 Columbia University GSAS BIOT 4180

  2. Week 11 Partnering, Mergers and Acquisitions and Exits Columbia University GSAS BIOT 4180

  3. Small Company Perspective • Late clinical and regulatory experience • Risk mitigation • Orphan drug sales force: 15+ • Blockbuster drug sales force: 3000+ • Cost of sales person: $300,000- 400,000 • Minimal overlap in skill sets between development, regulatory and sales Columbia University GSAS BIOT 4180

  4. Large Company Perspective • Cash flow • Product(s) • Pipeline • Platform • Leverage existing assets (sales force eg) Columbia University GSAS BIOT 4180

  5. Good and Bad Deals • Roche acquiring Genentech • Herceptin, Avastin, Lucentis • Pfizer acquires Warner Lambert • Lipitor • Pfizer acquires Esperion • Nothing for 1.3B Columbia University GSAS BIOT 4180

  6. 2003: MedivationinlicensesDimebon • Sep 2006: Dimebon meets 5/5 endpoints at 6 months Columbia University GSAS BIOT 4180

  7. June 2007: Dimebon benefits last 12 months Columbia University GSAS BIOT 4180

  8. July 2008: Dimebon data published in Lancet • Sep 2008: Pfizer deal announced Columbia University GSAS BIOT 4180

  9. Deal variables • Upfront payment • Milestone payments • Royalties • Costs and profits • Manufacturing • Geography • Co-promotion • Options • Contingent variable rights / other indications Columbia University GSAS BIOT 4180

  10. Dimebon licensing deal • 225M upfront payment • 500M on approval • 60:40 costs and profit split Columbia University GSAS BIOT 4180

  11. Mar 2010 Dimebon fails pivotal trial Columbia University GSAS BIOT 4180

  12. Stock vs Cash • Stock as currency: implicit admission that the stock is over-valued • Cash: straight-forward DCF calculation w/o need to include a “stock price currency exchange”

  13. Columbia University GSAS BIOT 4180

  14. Columbia University GSAS BIOT 4180

  15. Negotiation • Dealing from strength • Multiple buyer dynamic • Never have no options • Walking away • Most programs / companies are bought, not sold

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