Business Development And Its Information Needs

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

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

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Our Background
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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

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Business Development What do they do?
Mergers Acquisitions
Deal Negotiation
Public Relations
Technical Writing
Financials
Market Analysis
Competitive Intelligence
Licensing Activity
Project Management
Competitive Landscape
Non-traditional activities
Traditional activities
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Case Study In-licensing
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In-licensing has been described as
Finding a needle in a haystack
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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
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Case Study In-licensing Finding Leads
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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

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Target Sweeps
Akt inhibitors
Sources Thomson Pharma, Company Websites, Newsfee
ds

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Case Study In-licensing Making the Case
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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

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 repor
ted at ASH 10/04 Dacogen MAA filing for MDS acce
pted by EMEA 9/04 Begins promotion of Kadian
to oncologists 9/04 Acquires WW marketing rig
hts for Dacogen from SuperGen 9/04 Acquires Zy
cos for 50 M in cash 9/04 Acquires Aesgen for
90 M in cash 7/04 Kadian marketing agreement
for oncology market with Alpharma
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MGI Pharma
Personnel
Financials
Income Statement (12/31/2004) Revenues
195.7 M COGS 60.0 M RD Expens
e 62.6 M SGA Expense 73.8 M Acq. RD Exp
ense 83.1 M Operating Income (84.7 M) Interes
t 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 Investmen
ts 75.4 M Property, Plant and Equipment 2.
7 M Intangible Assets 8.0 M Total Assets 43
6.3 M Liabilities Current Liabilities 58.8
M Long Term Debt 260.2 M Other Liabilities
2.8 M Total Liabilities 321.8 M Shareholders E
quity Net Shareholders Equity 114.5 M Total Li
abilities and SH Equity 436.3 M
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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
  

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Competitive Landscape Late Stage Breast Cancer
Targeted Therapies
Sources --Thomson Pharma --Clinicaltrials.gov, A
SCO abstracts, DataMonitor
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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 Ca
ncer 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
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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

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I Know How To Search For Information!
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Of Course, You Know Better
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Perception vs. Reality
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Does Information Flow Freely?
Demand
Supply
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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 Departme
nt webpage
Provide access to databases
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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

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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

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• JJ Owen
• AVEO Pharmaceuticals
• jjowen_at_aveopharma.com 617.299.5889
• Bob Bennett
• Merrimack Pharmaceuticals
• rbennett_at_merrimackharma.com 617.441.1008
• Thank you