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Business Development And Its Information Needs

Business Development And Its Information Needs. JJ Owen, AVEO Pharmaceuticals Bob Bennett, Merrimack Pharmaceuticals March 2007. Agenda. Introduction – Our Background Business Development Who and What do they do? Case Study: In-licensing Outputs and Sources

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Business Development And Its Information Needs

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  1. Business Development And Its Information Needs JJ Owen, AVEO PharmaceuticalsBob Bennett, Merrimack PharmaceuticalsMarch 2007

  2. Agenda • Introduction – Our Background • Business Development • Who and What do they do? • Case Study: In-licensing • Outputs and Sources • Creating Value: Beyond the Sources

  3. Our Background

  4. Who is Business Development? • Small organization • Mostly MBA trained (some with science backgrounds) • Typically marketing or finance backgrounds • Prior background - consultants • Intimately aware of several data sources • Unaware of a large majority • Time crunched deadlines is the norm • Attention span of a gnat • Job focus & data source needs constantly changing

  5. Business Development – What do they do? Mergers & Acquisitions Deal Negotiation PublicRelations Technical Writing Financials Market Analysis CompetitiveIntelligence Licensing Activity Project Management Competitive Landscape Non-traditional activities Traditional activities

  6. Case Study – In-licensing

  7. In-licensing has been described as… …Finding a needle in a haystack

  8. In-licensing: Process Flow • Finding Leads • Conferences • Connections • Secondary Sources • Primary Sources • Target Sweeps Making the Case • Company Profiles • Key Personnel • Pipeline snapshot • Financials • Deals • Competitor Pipelines • Clinical Trial Data • Commercial Profile • Market Data Tracking database Pursue Opportunity

  9. Case Study – In-licensing Finding Leads

  10. Finding Leads • Attend conferences • AACR, ASCO, CHI, SRI, EORTC, many, many others • Connections • Who do you know? • Secondary Sources • Thomson Pharma, BioCentury, BioWorld, NewsFeeds, WWW • Primary Sources • Investors, SAB, BOD, Consultants

  11. Target Sweeps Akt inhibitors Sources Thomson Pharma, Company Websites, Newsfeeds

  12. Case Study – In-licensing Making the Case

  13. Company Profiles - MGI Pharma Overview Pipeline • Headquarters: Bloomington, MN, Lexington, MA (MGI Biologics) • Therapeutic Focus: Entities (small molecule or Biologics) for cancer treatment and supportive care • Technology: BIOTOPE (targeted plasmid system) and GENCAP (DNA protection) • Strategy: Acquisition of clinical stage development compounds • Investors: Publicly traded on NASDAQ (MOGN) • Cash Position: $205.5M • Market Cap: $1.65 B ($1.65 B Enterprise Value) • Employees: 282 • --Aloxi (licensed NA rights from Helsinn SA) • --Salagen (retains NA marketing rights) • --Hexalen (retains WW rights) • --Dacogen (Decitabine) (acquired WW rights from SuperGen) • Small molecule, DNA methyltransferase inhibitor • P3 mono, MDS, 170 pts: RR 17% vs. 0% for supportive care • P2 mono, Gleevec ref. CML, 27 pts: 17 hema. response • --Irofulven (retains WW rights) • Small molecule acylfulvene, breaks DNA strands • P2 mono, rel/ref Ovarian, 55 pts: 1 CR, 9 PR • P3 mono, ref Pancreatic: OS inferior to 5-FU • P2 with ERCC3 gene deficient pts underway • P2 mono, liver, 48 pts: 2 PR, 18 SD • --Saforis (retains WW rights), Phase III, mucositis • --ZYC101a (acquired in purchase of ZYCOS ) • Antibody, completed Phase II, 161 pts, RR 43% vs. 27%, drug was well tolerated • --ZYC300 (acquired in purchase of ZYCOS) • Antibody, completed Phase I/II, 17 pts, ASCO 2003, drug was well tolerated and biologically active • --MG98 (licensed NA rights from Methylgene) • Antisense oligonucleotide, inhibits DNA methyltransferase-1 • P2 RCC, IFN combo: Initiated 10/04 Sources --Thomson Pharma, Recap, Company website, Yahoo Finance, SEC Recent News 4/05: MGI PHARMA Reports First Quarter Results 1/05: Dacogen NDA filing for MDS accepted by FDA 12/04: Dacogen P3 trial results in MDS reported at ASH 10/04: Dacogen MAA filing for MDS accepted by EMEA 9/04: Begins promotion of Kadian to oncologists 9/04: Acquires WW marketing rights for Dacogen from SuperGen 9/04: Acquires Zycos for $50 M in cash 9/04: Acquires Aesgen for $90 M in cash 7/04: Kadian marketing agreement for oncology market with Alpharma

  14. MGI Pharma Personnel Financials Income Statement (12/31/2004) Revenues $195.7 M COGS 60.0 M R&D Expense 62.6 M SG&A Expense 73.8 M Acq. R&D Expense 83.1 M Operating Income (84.7 M) Interest Income 5.3 M Interest Expense (6.0 M) EBT (85.4 M) Balance Sheet (12/31/04) Assets: Cash and Equivalents 205.5 M Accounts Receivable 122.3 M Inventories 8.4 M Other Current Assets 5.8 M LT Investments 75.4 M Property, Plant and Equipment 2.7 M Intangible Assets 8.0 M Total Assets 436.3 M Liabilities: Current Liabilities 58.8 M Long Term Debt 260.2 M Other Liabilities 2.8 M Total Liabilities 321.8 M Shareholders Equity: Net Shareholders Equity 114.5 M Total Liabilities and SH Equity 436.3 M

  15. MGI Pharma Deals • 9/04: Acquires privately held Zycos for $50 M in cash • Acquires expertise in immunology and development of biologics • See Pipeline for clinical data • 9/04: Acquires privately held Aesgen for $32 M in cash • Pays $32 M upfront, milestones of $33 M for approval and $25 M if annual sales exceed $50 M plus royalty of 5% • Acquires Saforis, a P3 compound for oral mucositis • 9/04: Licenses WW rights to Dacogen from SuperGen • P3 completed in MDS with an NDA expected 4Q04 • Possible expansion into AML, CLL and solid tumor • Pays $40 M equity investment, up to $45 M in milestones, at least $15 M in development costs and royalty from 20-30% • 7/04: Kadian marketing agreement with Alpharma • Kadian is a sustained release morphine marketed for pain relief • 3 yr agreement for MGI to market Kadian to oncologists • Undisclosed profit sharing agreement • 4/01: Licenses NA commercialization rights for Aloxi from Helsinn • Aloxi is a P3 product for chemotherapy induced nausea and vomiting • Pays $11 M upfront, undisclosed milestones and royalties • Helsinn funds development and responsible for manufacturing • 4/03: Collaboration expanded to include post-operative nausea and vomiting indication and an oral formulation • Pays $22.5 M upfront and up to $25 M in milestones • 1/01: US marketing rights for Mylocel from Barr Labs • Mylocel (hydroxyurea) marketed for melanoma, CML and ovarian cancer • Barr receives undisclosed royalties

  16. Competitive Landscape: Late Stage Breast Cancer Targeted Therapies Sources --Thomson Pharma --Clinicaltrials.gov, ASCO abstracts, DataMonitor

  17. Market Analysis: Breast Cancer Epidemiology and Current Treatment Paradigm, 2004 Incidence Prevalence Mortality 1 yr survival 5 yr survival 412,894 2,714,400 121,197 97.5% 86.5% Current Treatment Paradigm Sources --DataMonitor, WWW, GloboCan, American Cancer society, NCI Late Stage Early Stage • Options dependent on status • Chemotherapy • -Paclitaxel and Docetaxel • Hormonal Therapy • -Tamoxifen or Arimidex • Targeted Therapy • -Herceptin (Her2+ only, 25% of patients) Surgery *depends on hormone receptor and menopausal status

  18. Business Development Sources • Extremely limited resources, always looking for the best “bang for your buck” • Choice of source is critical when one has money • Public sources, public sources, public sources • Current Gaps • Sales projections • Analyst reports • Clinical trial data • Deal details

  19. Articulating the value of information and analysis

  20. I Know How To Search For Information!

  21. Of Course, You Know Better

  22. Perception vs. Reality

  23. Does Information Flow Freely? Demand Supply

  24. How Is Information & Analysis Delivered In Your Organization? Newsletters Literature Alerts Conference Reports Interactions with individuals Membership on project teams On-line requests Journal subscriptions Department webpage Provide access to databases

  25. Value Is Created In Each Step Of The Process Access Greater breadth of information sources Timeliness Rapid access to information through knowledge, effective searching, and alerts Subject Knowledge Cut through the noise, recognize critical info, provide analysis, deliver exec summaries Delivery Multitude of delivery mechanisms Reduce time to customer

  26. How Would An Information Professional Assist Bus Dev? • Added Knowledge Sources, limitations, and effective use • Focused Data Quality, accuracy, completeness, analysis • Efficient Use Of Time Division of labor • Assist In Budgeting Able to forecast information needs as company matures

  27. JJ Owen: AVEO Pharmaceuticals jjowen@aveopharma.com617.299.5889 Bob Bennett: Merrimack Pharmaceuticals rbennett@merrimackharma.com617.441.1008 Thank you

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