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Trends in life sciences licensing:

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Title: Trends in life sciences licensing:


1
  • Trends in life sciences licensing
  • what the alliances of 2006 tell us about 2007

LES Vancouver chapterMarch 29, 2007James
Hatton
2
Experienced Advisorson Collaborations
Development and License Agreement
Collaboration and License Agreement
Joint Development Agreement
Collaboration and License Agreement
Strategic Alliance and Exclusive Master
Agreement
Development Agreement
3
Trends in life sciences licensing
  • idiosyncratic look
  • focus on important and innovative collaborations
  • implications for deal points and structures for
    life sciences licensing in 2007

4
Sources of exceptional collaborations
  • Recombinant Capital's 2006 Breakthrough
    Alliance nominees
  • Scrip Awards 2006 Licensing Deal of the Year
    nominees andPartnership Alliance of the Year
  • Burrill Co.'s quarterly publications to Q1 2006

5
Breakthrough Alliance nominees
  • GSK Epix of 12/06 (not yet disclosed)
  • Janssen Vertex of 6/06
  • MedImmune Infinity of 8/06
  • Novartis HGS of 6/06
  • Takeda Affymax of 6/06

6
Scrip Awards nominees
  • Alnylam Novartis of 12/05
  • AtheroGenics IPR AstraZeneca of 12/05
  • HGS Novartis Collaboration Agreement of 6/06
  • Nastech PG of 1/ 06
  • NicOx Merck of 3/06
  • Protherics AstraZeneca of 12/05
  • Trubion Wyeth of 12/05

7
Definitive list of alliances of 2006
  • approximately 20 agreements
  • full text disclosed athttp//del.icio.us/JamesHat
    ton/interesting

8
Exceptional collaborations of 2006
9
Exceptional collaborations of 2006 contd.
10
http//del.icio.us/JamesHatton/interesting
11
Source of the full text
12
http//www.jameshatton.com/public/
13
Alliance trends background information
  • Total industry-wide alliances
  • Average upfront payments
  • Regional deals
  • information courtesy of James Watson,Burrill
    Company Merchant Banking

14
Total industry-wide alliances
15
Average upfront payments
16
Average total payments
17
Regional deals world-wide rights on the wane
18
Regional deals Asia and America on the rise
19
Alliance trends
  • empty pipelines increase biotech market power
  • biotechs seek to grow into mini-pharmas (through
    licensing)
  • biotechs seek higher returns by bearing more of
    the risk

20
Biotech market power
  • lots of little wins
  • e.g. equity at a premium
  • 40 Acadia Sepracor
  • 30 Protherics AstraZeneca
  • 25 Pharmacopoeia GSK Pharmion MethylGene
  • 20 Exelixis GlaxoSmithKline
  • 15 Orthologic Quintiles

21
Growth through licensing
  • retention of rights
  • regional deals
  • cost and profit sharing
  • co-promotion rights
  • right to lead development
  • quids

22
Regional deals
  • AVI Cook US EU
  • Myogen GSK WW ex US
  • Nuvelo Bayer WW ex US
  • Pharmion GPC EU c.
  • Pharmion MethylGene NA EU c.
  • Vertex Janssen EU c.

23
Cost sharing and some profit sharing
  • HGS Novartis 50 profit share in US
  • Intermune Roche 33
  • Infinity MedImmune 50 costs and profits
  • Pharmion GPC shared costs royalties 26-34
  • Pharmion MethylGene 40 royaltiesNA 13-21
    ROW 10-13
  • Vertex Janssen 50 royalties tiered average mid
    20's

24
Co-promotion rights in the US
  • BioCryst Roche
  • EPIX GlaxoSmithKline
  • Infinity MedImmune
  • Intermune Roche
  • NicOx Merck
  • Plexxikon Roche
  • Trubion Wyeth

25
Licensors right to lead development
  • EPIX GlaxoSmithKline EPIX develops to proof of
    concept
  • Infinity MedImmune Infinity develops to proof of
    concept
  • Plexxikon Roche Plexxikon develops to Phase I
  • Pozen AstraZeneca Pozen develops to NDA in US

26
Quids
  • a licensee offsets the cost of an alliance by
    offering a non-cash asset, such as trading one
    drug for the rights to another one. Quids often
    involve co-promotion alliances
  • AthroGenics AstraZeneca sales force
  • Myogen GSK US drug distribution
  • (Neurocrine Pfizer) detailing rights
  • (Abbott Cephalon) RFN
  • (Exilixis BMS) drug back

27
implications for life sciences licensing in 2007
  • expect to win more of the small stuff
  • profit sharing deals still the exception
  • consider option rightsPharmion MethylGene
  • how best to grow?retain regional rights
    co-promotion rights development rights quids

28
  • For an electronic copy of todays presentation
    and the full text of all background licenses,
    please contact
  • James Hatton Farris, Vaughan, Wills Murphy
    LLP jhatton_at_farris.com
  • or visit
  • www.jameshatton.com/public
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