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Biotech M&A and Licensing Strategies - Co-development Agreements are Poised to Increase in the Future to Counter Drying Pipelines

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Biotech M&A and Licensing Strategies - Co-development Agreements are Poised to Increase in the Future to Counter Drying Pipelines Summary GBI Research's pharmaceutical research, “Biotech M&A and Licensing Strategies - Co-development Agreements are Poised to Increase in the Future to Counter Drying Pipelines”, provides insights into the global biotech M&A and licensing strategies. The report provides an in-depth analysis of the major M&A trends in the biotech industry along with the major drivers leading to an increased M&A activity in the current biotech industry. The report also delves into the M&A scenario in RNA therapeutics, monoclonal antibodies, biomarkers, biosimilars and global vaccines market. In addition, the report also analyzes the top 10 biotech companies with respect to the licensing agreement activities. The report is built using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis by GBI Research’s team of industry experts. GBI Research analysis revealed that acquisitions, as an M&A strategy, dominate the biotech industry with a total of 72% of the M&A deals involving acquisitions. Acquisition strategy was adopted by biotech companies to have high speed access to resources, avoid barriers of entry and expand their portfolio of products and to improve their asset valuation. On the other hand, co-development deals dominates the licensing strategies landscape as compared to licensing agreements and are expected to increase at a higher rate in future. Co-development deals in the biotech industry witnessed a drastic increase in 2010 from 2009. There were 241 co-development activities that occurred in the year 2009 compared to 216 that occurred between January 2010 and August 2010. RNA therapeutics pipeline is the most promising with more than 89% of the licensing deals occurred for discovery and preclinical stage of development. The trend indicates that the future of RNA therapeutic re

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									    Biotech M&A and Licensing Strategies - Co-development
   Agreements are Poised to Increase in the Future to Counter
                       Drying Pipelines
 Reference Code: GBIHC056MR                                                                                            Publication Date: April 2011


                                      GBI Research finds that co-development deals will increase at a higher rate while acquisition
Acquisition dominated as              strategy will be followed by most of the companies in the biotechnology industry. There were 45
a strategy in the                     M&A (Mergers & Acquisitions) deals and 241 co-development activities that occurred in the year
biopharmaceutical                     2009. The co-development activities in the industry were much higher than other forms of strategic
industry accounting for               consolidation.
72% of the M&A deals
                                      Acquisition was the Predominant Strategy that Companies Followed in the Year 2009 and
                                      2010

                                       Biotech M&A and Licensing Strategies, Global, M&A Deals in Biotech by Type (%),
                                       2009 and 2010




                                                                                                                         Acquisition
                                                                                                                           72%
                                                                Merger
                                                                 3%

                                                       Private Equity
                                                            8%




                                                                       Asset
                                                                    Transaction
                                                                       17%

                                       Source: GBI Research’s Internal Database, Company Websites, Annual Reports




                                      Acquisitions contributed to 71.7% of global M&A deals while mergers contributed to only 2.8%.
                                      Asset transaction contributed to and private equity was the second most adopted strategy by the
                                      companies. It accounted for 17% and 8.5% of the overall M&A deals in 2009 and 2010. Acquisition
                                      strategy was adopted by biotech companies to have high speed access to resources, avoid barriers
                                      of entry and expand their portfolio of products and to improve their asset valuation.




Biotech M&A and Licensing Strategies - Co-development                                                               GBIHC056MR / Published APR 2011
Agreements are Poised to Increase in the Future to Counter
Drying Pipelines                                                                                                                              Page 1
                                                                              © GBI Research. This is a licensed product and is not to be photocopied
                                      The Future of RNA Therapeutic R&D Pipeline Is Optimistic With More than Half of the
                                      Licensing Deals Took Place for Molecules, Which Are either In the Discovery or
                                      Development Stage
                                      Out of the total 48 licensing deals studied between 2008 and 2009, 73% took place for molecules in
                                      the discovery and development stages; and 17% took place for molecules in the preclinical stage.
                                      4% of the deals related to when the molecules were in either Phase II or Phase III clinical studies.
                                      The trend indicates that significantly more than half of the licensing deals took place for either
                                      discovery or development stage molecules indicating that the future of RNA therapeutic research
                                      and development will be prosperous for at least the next five years. Only 2% of the deals were
                                      signed between companies, when the RNA molecules were in Phase I clinical development.
                                      The Global Vaccines Market Has Been Highly Active In the M&A Landscape with Numerous
                                      Licensing and Co-Development Alliances
                                      Approximately 81% of the deals in the global vaccines market comprised licensing and alliance
                                      deals, which reflects the strong need to partner for development of new vaccines.
                                      Since, the global vaccines market is already highly consolidated there were fewer acquisition and
                                      mergers than alliances. However, one of the biggest deals in the vaccines industry was the
                                      acquisition of Wyeth by Pfizer for $68 billion in 2009.

                                       Biotech M&A and Licensing Strategies, Vaccines Market, Global, M&A Landscape by Deal
                                       Type (%), 2009

                                                                        Acquisition
                                                                           8%


                                                        Mergers
                                                         11%




                                                                                                                Licensing & Alliances
                                                                                                                        81%


                                       Source: GBI Research’s Internal Database, Company Websites, Annual Reports




                                      Licensing and alliances accounted for the largest share of the global M&A and licensing deals
                                      landscape. There were 30 licensing deals and alliances in the global vaccines industry in 2009. The
                                      high number of licensing deals made is characteristic of the vaccines industry where technology
                                      and development platforms are highly fragmented. The development of a vaccine requires the
                                      licensing of various technologies, platforms and adjuvants to avoid legal problems in the future.
                                      This requires significant investment and thus makes the vaccines industry a largely unattractive
                                      segment for companies that do not have sufficient funds.




Biotech M&A and Licensing Strategies - Co-development                                                               GBIHC056MR / Published APR 2011
Agreements are Poised to Increase in the Future to Counter
Drying Pipelines                                                                                                                              Page 2
                                                                              © GBI Research. This is a licensed product and is not to be photocopied
                                      1         Table of Contents
                                      1   Table of Contents ........................................................................................................................ 3
                                          1.1    List of Tables..................................................................................................................... 6
                                          1.2    List of Figures ................................................................................................................... 7
                                      2   Biotech M&A and Licensing Strategies – Introduction ................................................................. 9
                                          2.1    GBI Research Report Guidance ..................................................................................... 10
                                      3   M&A Trends in the Biotech Industry .......................................................................................... 11
                                          3.1    Top 10 Biotech Mergers & Acquisitions .......................................................................... 11
                                             3.1.1    Segmentation of M&A Deals by Deal Value: Small Biotech Firms were the Easy
                                                      Targets for Acquisitions ........................................................................................... 11
                                          3.2    Shift in Trend from ‘Big pharma’ to ‘Big Bio-Pharmaceutical Companies ........................ 11
                                          3.3    Trends towards Diversification Leads to the Integration of Pharmaceuticals and Medical
                                                 Device’s Segment of the Healthcare Industry ................................................................. 11
                                             3.3.1    Conclusion ............................................................................................................... 11
                                          3.4    Biotech M&A Market Drivers ........................................................................................... 12
                                             3.4.1    Huge Investments in Biotech R&D Resulting in Strong Product Pipeline ................ 12
                                             3.4.2    Higher Approval Rates for Biotech Products have Contributed to the Growth of the
                                                      Biotechnology Industry ............................................................................................ 12
                                             3.4.3    High Unmet Needs in Life Threatening Diseases are Driving the Biotechnology
                                                      Market and M&A Activities ....................................................................................... 12
                                             3.4.4    Patent Expiries of Pharmaceutical Blockbusters: Pharmaceutical Companies are
                                                      Focusing on Biologics Due to Their Lack of Patent Expiry in Recent Years ............ 13
                                             3.4.5    Strong Growth in the Market for Cancer and Autoimmune Diseases ...................... 14
                                             3.4.6    Lack of Patent Expiry Ensures a Continuous Stream of Revenue ........................... 14
                                             3.4.7    Increasing Interest of Big Pharma Companies in the Biotech Industry .................... 14
                                          3.5    Key Takeaway ................................................................................................................ 14
                                      4   M&A Scenario in the Global Landscape .................................................................................... 15
                                          4.1    M&A Activities in the Biotech Industry ............................................................................. 15
                                          4.2    Licensing Agreements in the Biotech Industry ................................................................ 26
                                          4.3    Co-development Activities in the Biotech Industry .......................................................... 30
                                      5   M&A Scenario in RNA Therapeutics .......................................................................................... 35
                                          5.1    Big Pharmaceutical Companies Relentlessly Attempting to Unlock RNA Therapy
                                                 Potential .......................................................................................................................... 36
                                          5.2    Influx of Huge Venture Capitalist Funding into Small and Medium Biotech Companies
                                                 Venturing into RNA Therapeutics Development.............................................................. 36
                                             5.2.1    Dicerna Pharmaceuticals ......................................................................................... 36
                                             5.2.2    Cequent Pharmaceuticals ....................................................................................... 36
                                             5.2.3    Prosensa ................................................................................................................. 36
                                             5.2.4    Cylene Pharmaceuticals .......................................................................................... 37
                                          5.3    High Value Collaborations involving RNA Therapies ...................................................... 37
                                             5.3.1    ISIS Pharmaceuticals .............................................................................................. 37
                                             5.3.2    Alnylam .................................................................................................................... 37
                                             5.3.3    Silence Therapeutics and AstraZeneca ................................................................... 37
                                             5.3.4    Santaris Pharma and Wyeth Pharmaceuticals ........................................................ 37
                                          5.4    Large Pharmaceutical and Biotechnology Companies are Vying for Major Acquisitions in
                                                 the RNA Therapeutics Market ......................................................................................... 38
                                             5.4.1    Thermo Fisher Scientific and Open Biosystems ...................................................... 38
                                             5.4.2    Roche and Mirus Bio ............................................................................................... 38
                                          5.5    R&D Licensing Agreements ............................................................................................ 39
                                             5.5.1    Deals by Phase ....................................................................................................... 39
                                             5.5.2    Deals by Geography ................................................................................................ 40
                                             5.5.3    Deals by Licensing Type ......................................................................................... 41
                                             5.5.4    Deals by Value ($) ................................................................................................... 42
                                             5.5.5    Discovery/Development ........................................................................................... 43
                                             5.5.6    Preclinical ................................................................................................................ 48


Biotech M&A and Licensing Strategies - Co-development                                                                                 GBIHC056MR / Published APR 2011
Agreements are Poised to Increase in the Future to Counter
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                                                                                        © GBI Research. This is a licensed product and is not to be photocopied
                                           5.5.7   Phase I .................................................................................................................... 49
                                           5.5.8   Phase II ................................................................................................................... 49
                                           5.5.9   Phase III .................................................................................................................. 50
                                      6 M&A Scenario in Monoclonal Antibodies ................................................................................... 51
                                        6.1    Overview ......................................................................................................................... 51
                                           6.1.1   Emergent BioSolutions Acquires Avanir Pharmaceuticals ....................................... 52
                                           6.1.2   MacroGenics Acquires Raven Biotechnologies ....................................................... 52
                                           6.1.3   Thermo Fisher acquires Affinity BioReagents.......................................................... 52
                                        6.2    R&D Licensing Agreements ............................................................................................ 53
                                           6.2.1   Deals by Phase ....................................................................................................... 53
                                           6.2.2   Deals by Geography ................................................................................................ 54
                                           6.2.3   Deals by Licensing Type ......................................................................................... 54
                                           6.2.4   Deals by Value ($) ................................................................................................... 55
                                           6.2.5   Preclinical ................................................................................................................ 56
                                           6.2.6   Phase I .................................................................................................................... 57
                                           6.2.7   Phase II ................................................................................................................... 58
                                           6.2.8   Phase III .................................................................................................................. 59
                                           6.2.9   Approved ................................................................................................................. 59
                                      7 M&A Scenario in Biomarkers ..................................................................................................... 60
                                        7.1    Mergers and Acquisitions ................................................................................................ 60
                                           7.1.1   Thermo Fisher Scientific Inc Merges with B.R.A.H.M.S. AG ................................... 60
                                           7.1.2   Clinical Data Inc to Acquire Avlon Pharmaceuticals ................................................ 60
                                           7.1.3   OSI Pharmaceuticals and AVEO Enter Collaborative Alliance ................................ 60
                                           7.1.4   PEP Products Inc. and Interleukin Genetics Inc. Enter Collaborative Alliance ........ 61
                                           7.1.5   Pfizer Canada signs Alliance Deal with the Centre of Excellence for the Prevention
                                                   of Organ Failure (Proof) ........................................................................................... 61
                                           7.1.6   Millipore Corporation Acquires Guava Technologies ............................................... 61
                                           7.1.7   SuperGen Inc. Acquires Montigen Pharmaceuticals, Inc. ........................................ 61
                                           7.1.8   National Institute of Allergy and Infectious Diseases (NIAID) Enters Collaborative
                                                   Alliance with Caprion Proteomics Inc. ..................................................................... 61
                                           7.1.9   Entelos Inc Acquires Iconix Biosciences ................................................................. 61
                                           7.1.10 Vermillion Inc Acquires Ciphergen Biosystems ....................................................... 61
                                           7.1.11 Collaborative Alliance with CBMS-MITS JPMO ....................................................... 62
                                        7.2    Mergers and Acquisition Analysis by Deal Type ............................................................. 62
                                        7.3    Mergers and Acquisition by Year of Consolidations ........................................................ 63
                                        7.4    Mergers and Acquisitions by Geography ........................................................................ 64
                                        7.5    Mergers and Acquisitions by Deal value ......................................................................... 65
                                        7.6    Partnership Deals ........................................................................................................... 66
                                           7.6.1   Partnership Deals by Year ....................................................................................... 66
                                           7.6.2   Partnership Deals by Indication ............................................................................... 67
                                           7.6.3   Partnership Deals by Deal Type .............................................................................. 68
                                           7.6.4   Partnership Deals by Geography............................................................................. 69
                                           7.6.5   Partnership Deals by Companies ............................................................................ 70
                                        7.7    M&A Landscape.............................................................................................................. 71
                                           7.7.1   M&A Deals by Value................................................................................................ 71
                                           7.7.2   M&A Deals by Geography ....................................................................................... 72
                                           7.7.3   M&A Deals by Companies ....................................................................................... 73
                                           7.7.4   Top Five M&A Deals by Value ................................................................................. 74
                                        7.8    Key Takeaway ................................................................................................................ 76
                                      8 M&A Scenario in Biosimilars...................................................................................................... 77
                                        8.1    Mergers & Acquisitions ................................................................................................... 77
                                           8.1.1   Merck Acquires Insmed’s Follow-On Biologics for $130m ....................................... 77
                                           8.1.2   Teva and Lonza Joint Venture Targets Biosimilars ................................................. 77
                                           8.1.3   GTC Enters a Follow-On-Biologic Founder Development Collaboration with
                                                   AgResearch ............................................................................................................. 77


Biotech M&A and Licensing Strategies - Co-development                                                                               GBIHC056MR / Published APR 2011
Agreements are Poised to Increase in the Future to Counter
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                                                                                       © GBI Research. This is a licensed product and is not to be photocopied
                                         8.2    Licensing Deals............................................................................................................... 78
                                            8.2.1   Innogene Seals Deal with CIMAB to Market Biosimilars ......................................... 78
                                            8.2.2   Abraxis Licenses Rights to Biosimilar from Indian Firm Biocon ............................... 78
                                      9 M&A Scenario in the Global Vaccines Market ........................................................................... 79
                                         9.1    Mergers and Acquisitions ................................................................................................ 79
                                            9.1.1   Pfizer Acquires Wyeth for $68 billion ....................................................................... 82
                                            9.1.2   BioSante Pharmaceuticals Acquires Cell Gensys ................................................... 82
                                            9.1.3   Johnson & Johnson Acquires 18% Stake in Crucell ................................................ 82
                                         9.2    Licensing Agreements .................................................................................................... 83
                                            9.2.1   Discovery Phase...................................................................................................... 87
                                            9.2.2   Phase I .................................................................................................................... 88
                                            9.2.3   Phase II ................................................................................................................... 89
                                            9.2.4   Phase III .................................................................................................................. 90
                                            9.2.5   Filed for Approval and Approved ............................................................................. 91
                                      10 Licensing Agreements of Top 10 Biotech Companies ............................................................... 93
                                         10.1 Amgen Inc ....................................................................................................................... 93
                                            10.1.1 Company Overview ................................................................................................. 93
                                            10.1.2 Licensing Agreements ............................................................................................. 93
                                         10.2 Genentech (Roche)......................................................................................................... 94
                                            10.2.1 Company Overview ................................................................................................. 94
                                            10.2.2 Licensing Agreements ............................................................................................. 94
                                         10.3 Gilead Sciences .............................................................................................................. 95
                                            10.3.1 Company Overview ................................................................................................. 95
                                            10.3.2 Licensing Agreements ............................................................................................. 95
                                         10.4 UCB Pharma ................................................................................................................... 96
                                            10.4.1 Company Overview ................................................................................................. 96
                                            10.4.2 Licensing Agreements ............................................................................................. 96
                                         10.5 Genzyme Corporation ..................................................................................................... 96
                                            10.5.1 Company Overview ................................................................................................. 96
                                            10.5.2 Licensing Agreements ............................................................................................. 97
                                         10.6 Biogen Idec ..................................................................................................................... 98
                                            10.6.1 Company Overview ................................................................................................. 98
                                            10.6.2 Licensing Agreements ............................................................................................. 98
                                         10.7 CSL Limited .................................................................................................................... 99
                                            10.7.1 Company Overview ................................................................................................. 99
                                            10.7.2 Licensing Agreements ............................................................................................. 99
                                         10.8 Celgene Corporation ....................................................................................................... 99
                                            10.8.1 Company Overview ................................................................................................. 99
                                            10.8.2 Licensing Agreements ............................................................................................. 99
                                         10.9 Cephalon....................................................................................................................... 100
                                            10.9.1 Company Overview ............................................................................................... 100
                                            10.9.2 Licensing Agreements ........................................................................................... 100
                                         10.10 Actelion Pharmaceuticals Ltd ........................................................................................ 101
                                            10.10.1 Company Overview ............................................................................................... 101
                                            10.10.2 Licensing Agreements ........................................................................................... 101
                                      11 Biotech M&A and Licensing Strategies – Appendix ................................................................ 102
                                         11.1 Marketed Definitions ..................................................................................................... 102
                                         11.2 Abbreviations ................................................................................................................ 102
                                         11.3 Research Methodology ................................................................................................. 103
                                            11.3.1 Coverage ............................................................................................................... 103
                                            11.3.2 Secondary Research ............................................................................................. 104
                                            11.3.3 Primary Research .................................................................................................. 104
                                            11.3.4 Expert Panel Validation ......................................................................................... 104
                                         11.4 Contact Us .................................................................................................................... 104
                                         11.5 Disclaimer ..................................................................................................................... 105

Biotech M&A and Licensing Strategies - Co-development                                                                              GBIHC056MR / Published APR 2011
Agreements are Poised to Increase in the Future to Counter
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                                                                                       © GBI Research. This is a licensed product and is not to be photocopied
                                         11.6     Sources ......................................................................................................................... 105


                                      1.1     List of Tables
                                      Table 1:    Biotech M&A and Licensing Strategies, Value of Drugs Going Off-Patent by Therapeutic
                                                  Area, Global, ($m), 2009–2014 ...................................................................................... 13
                                      Table 2:    Biotech M&A and Licensing Strategies, Global, Top M&A Deals, $m, 2009 .................. 22
                                      Table 3:    Biotech M&A and Licensing Strategies, Global, Top M&A Deals, $m, 2010 .................. 24
                                      Table 4:    Biotech M&A and Licensing Strategies, Global, Top Licensing Agreements, $m, 2009. 34
                                      Table 5:    Biotech M&A and Licensing Strategies, Global, Top Licensing Agreements, $m, 2010. 34
                                      Table 6:    Biotech M&A and Licensing Strategies, Global, Key M&A Activities in RNA Therapies,
                                                  2008-2009 ...................................................................................................................... 35
                                      Table 7:    Biotech M&A and Licensing Strategies, Global RNA Therapeutics,
                                                  Discovery/Development Stage Drugs Licensing Agreements, 2008-2009 ..................... 43
                                      Table 8:    Biotech M&A and Licensing Strategies, Global RNA Therapeutics, Preclinical Drugs
                                                  Licensing Agreements, 2008-2009................................................................................. 48
                                      Table 9:    Biotech M&A and Licensing Strategies, Global RNA Therapeutics, Phase II Drugs
                                                  Licensing Agreements, 2008-2009................................................................................. 49
                                      Table 10:   Biotech M&A and Licensing Strategies, Global RNA Therapeutics, Phase III Drugs
                                                  Licensing Agreements, 2008-2009................................................................................. 50
                                      Table 11:   Biotech M&A and Licensing Strategies, Global Monoclonal Antibodies Market, Major
                                                  M&A Deals Between 2008-2009 .................................................................................... 51
                                      Table 12:   Biotech M&A and Licensing Strategies, Global Monoclonal Antibodies Market, Licensing
                                                  Agreements for Drugs in the Preclinical Stage, 2008-2009............................................ 56
                                      Table 13:   Biotech M&A and Licensing Strategies, Global Monoclonal Antibodies Market, Licensing
                                                  Agreements for Drugs in Phase I, 2008-2009 ................................................................ 57
                                      Table 14:   Biotech M&A and Licensing Strategies, Global Monoclonal Antibodies Market, Licensing
                                                  Agreements for Drugs in Phase II, 2008-09 ................................................................... 58
                                      Table 15:   Biotech M&A and Licensing Strategies, Global Monoclonal Antibodies Market, Licensing
                                                  Agreements for Drugs in Phase III, 2008-2009 .............................................................. 59
                                      Table 16:   Biotech M&A and Licensing Strategies, Global Monoclonal Antibodies Market, Licensing
                                                  Agreements for Approved Drugs, 2008-09 ..................................................................... 59

								
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