2016 Q1 Results Analysis - Kineticos Life Sciences€¦ · Company performance/depends on global markets/IPO environment 18% 20% Discussions with Investors/Potential investor groups/Bankers

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2016Q1ResultsAnalysis

2

A partnership by:

BiopharmaCEOConfidenceIndex

OverviewandRaBonale

Thelifescienceindustryisanevolvingecosystem.Thisecosystemisdefinedbythe

networkofinterac:onsbetweenbiopharmaceu:calcompanies,servicesfirms,and

diagnos:cscompaniesaswellasthepa:ents,providers,payers,andregulatorsthat

influencemarketdynamics.

Withintheecosystem,thebiopharmasegmentsoperatesinarela:vestateofconflict.

Whilethepathofbringingnewproductstomarketishighlyregulatedthrougha

predictableFDAapprovalprocess,theindustryalsoweathersanongoingseriesofsea

changesfromonedecadetothenext.

AsmarketdynamicsshiC,acompany’sabilitytosucceedisdependentuponitsCEO’s

abilitytonavigatethesechangeswhileremainingoncoursetowardcommercializingits

products.TheC-suite—alongwiththeindustryoverall—wouldbenefitfromanongoing

mechanismtomeasureconfidenceinthemarketinaconsistentmanner.

3

A partnership by:

BiopharmaCEOConfidenceIndex

OverviewandRaBonale(conBnued)

The“BiopharmaCEOConfidenceIndex”isaforward-lookingindicatordesigned

tomeasureC-suitesen:mentandconfidenceinthebiopharmaindustry’s

economy.Thisconfidence—orlackthereof—isdefinedbythedegreeof

op:mismwithinkeybusinessindicators.

Theseindicatorsinclude:

§  CapitalMarkets

§  DealLandscape

§  ClinicalDevelopment

§  RegulatoryAffairs

§  Commercializa:on

§  BusinessModelandWorkforce

Measuringconfidencethrough

thesesixindicatorsover3me

willdemonstrateanebbandflow

ofmarketdynamicsandconfidence

inthefuturesuccessofcompanies

andgrowthintheoverallmarket.

4

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ResearchSpecificaBons

§  15 minute online survey

§  n=67 CEOs of biopharmaceutical companies.

§  Fielding was conducted between February 22, 2016 – April 1, 2016

Methodology

Sample

Timing

5

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Summary of Q1 2016 Confidence Levels

9% 6%

5% 19%

55%

9%

43% 51%

28%

58%

25%

49%

42% 45%

72%

22% 19% 42%

Capital Markets Deal Making Landscape

Clinical Development Regulatory Affairs Commercialization Buisness Model & Workflow

Very Confident

Somewhat Confident

Not Confident

Overall Confidence (Q1 ’16, n=67)

58%

39%

3%

- Key Business Indicators -

Good

Fair

Poor

Very Confident

Somewhat Confident

Not Confident

Very Confident

Somewhat Confident

Not Confident

Very Confident

Somewhat Confident

Not Confident

Very Confident

Somewhat Confident

Not Confident

Not looking to raise captial

Very Confident

Somewhat Confident

Not Confident

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Qualifying2016Q1ResultsAnalysis

7

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Most CEOs categorize their companies as

privately held; ¼ categorize as start-up

Base : All Respondents Q2. How would you categorize your biopharmaceutical company?

Category of Biopharmaceutical Company

Ó Significant increase / Ô Significant decrease from prior quarter

64%

27%

8%

2%

0%

Privately held company 63% 69%

Start-up biopharma (Less than $250M market cap) 18% 20%

Emerging biopharma ($250M to less than $1B market cap) 12% 9%

Large biopharma ($5B or more market cap) 2% 0%

Mid-sized biopharma ($1B to less than $5B market cap) 6% 2%

Q3 ‘15 (n=51)

Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

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73%

58%

28%

39%

0% 3%

Q3 '15 Q4 '15 Q1 '16

0%

100%

Very confident Somewhat confident Not confident

Overall confidence remains strong and does not

dip further in Q1 ‘16

Base : All Respondents Q8. What is your overall level of confidence in the biopharmaceutical business?

Overall Level of Confidence in the Biopharmaceutical Business

(Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

Ó  Significant increase / Ô Significant decrease from prior quarter

9

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Pipeline focus shifts towards rare products

while future emphasis continues to be on

specialty

Base : All Respondents Q3. How many of your primary pipeline products are classified as… Q4. What percentage of your current in-line product revenues are classified as… Q5. In the next 18 months, what percentage of your future in-line products will be classified as…

Classification of Primary Pipeline Products

Q3 ‘15 (n=43)

Q4 ‘15 (n=43)

Q1 ‘16 (n=63)

Rare 1.6 1.6 6.1

Specialty 7.1 5.1 2.5

Chronic 2.2 1.1 2.6

Classification of Current In-line Product Revenues

Classification of Future In-line Products

Q3 ‘15 (n=11)*

Q4 ‘15 (n=8)*

Q1 ‘16 (n=9)*

Rare 30% 16% 43%

Specialty 42% 58% 38%

Chronic 28% 26% 19%

Q3 ‘15 (n=51)

Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

Rare 26% 34% 24%

Specialty 45% 37% 50%

Chronic 29% 29% 26%


Note: Ipsos will monitor this over time to assess whether the shift is

meaningful.

10

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Pipeline focus remains largely on oncology,

followed by immunology and neurology

Assets:

Pipeline Marketed

Q3 ‘15

(n=51)

Q4 ‘15

(n=54)

Q1 ‘16

(n=67)

Q3 ‘15

(n=51)

Q4 ‘15

(n=54)

Q1 ‘16

(n=67)

Oncology 39% 37% 43% 4% 4% 2%

Immunology 20% 17% 21% 0% 0% 0%

Neurology 22% 35% 19% 2% 2% 0%

Cardiology/Vascular Diseases 20% 15% 18% 2% 0% 3%

Infections and Infectious Diseases 14% 17% 16% 2% 0% 0%

Dermatology 6% 9% 13% 0% 2% 0%

Ophthalmology 14% 19% 13% 2% 2% 0%

Drug Device Combinations 10% 6% 10% 0% 0% 2%

Hepatology 14% 11% 10% 0% 0% 0%

Vaccines 4% 6% 10% 0% 0% 0%

Base : All Respondents Q6. In which therapeutic area(s) do you have pipeline assets? Q7. In which therapeutic area(s) do you have marketed assets? Ó Significant increase / Ô Significant decrease from prior quarter

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CapitalMarkets2016Q1ResultsAnalysis

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Very confident Somewhat confident Not confident I am not currently looking to raise capital / I am not currently looking to raise capital through public markets / I am not currently looking to raise capital through other sources

Confidence in raising capital through public

markets is in decline

Base : Respondents confident of raising capital Q9. What is your overall confidence in your ability to raise capital in the next 18 months? Q10. How confident are you that your company will raise capital through the public markets in the next 18 months? Q11. How confident are you that your company will raise capital through other sources in the next 18 months?

53%

42% 33% 43%

0% 6% 14% 9%

Q3 '15 Q4 '15 Q1 '16

0%

100%

Overall Confidence in ability to raise capital

Confidence to raise capital through the public markets

Confidence to raise capital through other sources

(n=51) (n=54) (n=67)

34%

18% 30%

30%

2% 13%

34%

39%

Q3 '15 Q4 '15 Q1 '16

0%

100%

55% 53%

32% 33%

0% 3% 14% 12%

Q3 '15 Q4 '15 Q1 '16

0%

100%

(n=44) (n=49) (n=61)

(n=44) (n=49) (n=61)


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Increased focus on biotech sector is top driver

of confidence in ability to raise capital

Base : All Respondents Q9B. What is driving your overall level of confidence in your ability to raise capital in the next 18 months?

Drivers of Confidence in Ability to Raise Capital in Next 18 Months

22%

18%

16%

15%

12%

9%

9%

9%

6%

6%

5%

5%

3%

3%

2%

0%

0%

16%

More focus on biotechnology sector/therapeutic area 8% 15%

Company performance/depends on global markets/IPO environment 18% 20%

Discussions with Investors/Potential investor groups/Bankers 16% 17%

Strong clinical data/evidence 10% 17%

Strong/novelty pipeline of products 14% 13%

Capital from both public and private sectors/Public capital markets 18% 11%

Company valuations/Liquidity 12% 9%

Unmet medical needs 4% 2%

High business development activity 6% 6%

Election cycle/track record 0% 6%

Focus towards more revenue 6% 6%

Qualitative technology 0% 0%

Not raising the capital 4% 2%

Uncertain market conditions 4% 2%

Continued progress/growth 4% 2%

Past experience/history of company 8% 4%

Global economy forecasts 4% 2%

Others 14% 15%

Q3 ‘15 (n=51)

Q4 ‘15 (n=54)

Q1 ‘16 (n=67)


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Very confident Somewhat confident Not confident I am not planning to file an IPO or go public

Base : Self-Categorized As Private Held Company Q12. How confident are you that your company will file for an IPO or go public in the next 18 months? Q13. Are your efforts focused on raising debt or equity capital?

Focus of Efforts

CEOs are confident in their ability to go public.

Efforts remain focused on raising capital

47% 44%

25% 26%

0% 0%

28% 30%

Q3 '15 Q4 '15 Q1 '16

0%

100%

(n=32) (n=37) (n=43)


82%

5%

13%

Q3 ‘15 (n=51)

Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

Raising equity capital

77% 83%

Raising debt 8% 6%

Not applicable 16% 11%

Confidence that company will file an IPO/go public in next 18 months

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DealLandscape2016Q1ResultsAnalysis

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Base : All Respondents Q14. What is your overall assessment of the deal making landscape?

Confidence in deal making continues to drop


82%

45%

16%

51%

2% 5%

Q3 '15 Q4 '15 Q1 '16

0%

100%

Good Fair Poor

Overall Assessment of the Deal Making Landscape

(Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

Ô

Ó

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Strong/novelty of pipeline products 14% 26%

Large companies focus on new technology/external product 16% 26%

Availability of capital/assets 16% 13%

Large number of deals 16% 9%

Level of interest in prospective partners 6% 9%

Merger and acquisition activity with large pharma/Consolidation 18% 11%

Price sensitivity 8% 11%

Size/volume of the deal 8% 6%

Company valuations 6% 6%

Interests in oncology products 6% 4%

Ability to access unmet medical needs 0% 0%

Past experience 4% 2%

Others 31% 15%Ô

Don’t know/not sure 2% 2%

Base : All Respondents Q14B. What is driving your overall level of confidence in the deal making landscape?

Drivers of Confidence in the Deal Making Landscape

25%

24%

24%

16%

16%

9%

9%

3%

3%

3%

3%

2%

8%

0%

A strong product pipeline, large company focus

on new tech, and the availability of capital/assets

drive deal making confidence

Q3 ‘15 (n=51)

Q4 ‘15 (n=54)

Q1 ‘16 (n=67)


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As in prior quarters, out-licensing is the primary

commercialization lever

Base : All Respondents Q15. How confident are you that your company will complete a deal to out-license one or more pipeline assets or marketed products in the next 18 months? Q16. How confident are you that your company will complete a deal to in-license one or more pipeline assets or marketed products in the next 18 months?

Very confident Somewhat confident Not confident I am not currently seeking out-licensing deals

Very confident Somewhat confident Not confident I am not currently seeking in-licensing deals

43% 43% 31%

24% 2%

5%

24% 28%

Q3 '15 Q4 '15 Q1 '16

0%

100%

Confidence that company will out-license one or more pipeline assets or marketed

products in the next 18 months

Confidence that company will in-license one or more

pipeline assets or marketed

products in the next 18 months

22% 18% 20% 16% 2% 9%

57% 57%

Q3 '15 Q4 '15 Q1 '16

0%

100%

(n=51) (n=54) (n=67)

(n=51) (n=54) (n=67) Ó Significant increase / Ô Significant decrease from prior quarter

19

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Oncology remains the focus in deal-making.

Focus in neurology drops after increased

attention in Q4 ‘15

Base : All Respondents Q17. In which therapy area(s) are you focused on doing a deal?

Therapy Area of Focus

Q3 ‘15

(n=51)

Q4 ‘15

(n=54)

Q1 ‘16

(n=67)

Oncology 35% 37% 37%

Neurology 18% 33% 16%Ô

Immunology 10% 13% 16%

Ophthalmology 6% 17% 13%

Infections and Infectious Diseases 12% 11% 13%

Cardiology/Vascular Diseases 10% 17% 10%

Vaccines 0% 4% 8%

Dermatology 4% 6% 6%

Genetic Disease 12% 9% 5%

Hepatology 10% 6% 5%

Pulmonary/Respiratory Diseases 10% 6% 5%

Drug Device Combinations 0% 4% 5%

Others 4% 13% 8%

Of the 37% of CEOs focused on doing a deal in oncology, 96% have pipeline assets in oncology.


20

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CEOs feel that deal values are remaining stable

Base : All Respondents Q18. Are deal values – whether licensing or M&A – increasing or decreasing? Q19. What is the overall sense of competition in deals? Q20. How concerned are you about competitive activity? Ó Significant increase / Ô Significant decrease from prior quarter

14% 19%

65% 60%

22% 21%

Q3 '15 Q4 '15 Q1 '16 0%

100%

Very concerned Somewhat concerned Not concerned

Level of Concern with Competitive Activity (Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

37% 25%

61% 66%

2% 9%

Q3 '15 Q4 '15 Q1 '16 0%

100%

Intense Moderate Weak

Overall Sense of Competition in Deals (Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

59% 21% 35%

63%

6% 16%

Q3 '15 Q4 '15 Q1 '16 0%

100%

Increasing Remaining stable Decreasing

State of Deal Values (Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

Ó

Ô

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Most CEOs anticipate increased activity in the

next 18 months or more

Base : All Respondents Q21. Will you react to or initiate a competitive move in the next…

65% 69% 75%

59% 46%

64%

45% 50% 43%

29% 41% 39%

35% 32% 25%

41% 54%

36%

55% 50% 57%

71% 59% 61% Yes

No

Will React to or Initiate Competitive Move in the Next…

(Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16=67)


Q3 ’15 Q4 ‘15 Q1 ‘16 Q3 ’15 Q4 ‘15 Q1 ‘16 Q3 ’15 Q4 ‘15 Q1 ‘16 Q3 ’15 Q4 ‘15 Q1 ‘16

6 months 12 months 18 months 19+ months

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ClinicalDevelopment2016Q1ResultsAnalysis

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Confidence in delivering clinically differentiated

assets remains high

Base: All Respondents Q22. What is your overall confidence in your ability to drive clinically differentiated programs? Q22B. What is driving your overall level of confidence in your ability to drive clinically differentiated programs?

Overall Confidence in Ability to Drive Clinically Differentiated Programs (Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

40% of those who are very confident

have pipeline assets in oncology.

Drivers of Confidence Q3 ‘15 (n=51)

Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

Good clinical/supportive data 29% 17% 24%

Novel approach of the drug development 4% 17%Ó 19%

Expert consultation to position products 8% 17% 16%

Strong differentiated results/good delivery results 18% 24% 13%

Proprietary/novel technology 18% 13% 9%

Unique mechanism of action of products 10% 11% 8%

Strength of our internal pipeline products 4% 7% 6%

Safety profile 4% 2% 5%

Relationship with FDA 6% 0% 5%

Product knowledge/support 6% 6% 3%

Ability to address large unmet clinical need 10% 7% 2%

Regulartory insights 8% 0% 2%

Past experience 10% 2% 0%

Others 29% 24% 15%

65% 72%

35% 28%

Q3 '15 Q4 '15 Q1 '16

0%

100%



24

A partnership by:

1 Year

2 Years

3 Years

4 Years

5 Years

CEOs are confident that they will deliver

relevant therapies in 4-5 years

Base: All Respondents Q24. How confident are you that you will deliver relevant therapies in the next…?

Confidence in Delivery of Relevant Therapies in the Next… (Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

22% 12%

28% 25%

51% 63%

0%

100%

39%

24% 26%

42%

35% 34%

0%

100%

63% 49% 20% 37% 18% 13% 0%

100%

75% 66%

18% 30% 8% 5% 0%

100%

86% 85% 14% 12% 0% 3%

Q3 '15 Q4 '15 Q1 '16

0%

100%



Ô

Ó

Ó

25

A partnership by:

Assurance in in-house clinical capability is low

with ½ of CEOs reporting limited capabilities

Base: All Respondents Q23. Historically, how would you rate the productivity of your clinical development functions? Q25. How would you describe your in-house clinical capabilities?

Productivity Rating of Clinical Development Functions

(Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

In-house Clinical Capabilities (Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

55% of CEOs with pipeline assets in oncology

feel their in-house capabilities are limited

Good Fair Poor Comprehensive Adequate Limited

69%

52%

26%

46%

6% 2%

Q3 '15 Q4 '15 Q1 '16

0%

100%

20%

6%

47% 45%

33%

49%

Q3 '15 Q4 '15 Q1 '16

0%

100%


Ô

Ó

26

A partnership by:

Amid concerns with in-house clinical functions

and capabilities, outsourcing is becoming an

increasingly important strategy

Base: All Respondents Q26. How much clinical development activity do you outsource?

Amount of Outsourced Clinical Development Activity


8%

10%

15%

61%

6%

1-25% 8% 4%

26-50% 12% 11%

51-75% 29% 19%

76-100% 39% 56%

I currently don’t outsource any clinical development activities

12% 11%

Q3 ‘15 (n=51)

Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

27

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Primary Care

Specialty Care

Rare Disease

Competitive intensity for trial recruiting remains

stable in primary and specialty care; more

intense for rare disease

Base: All Respondents Q27. How is the competitive intensity for trial recruiting changing in primary care, specialty care, and rare disease?

State of Competitive Intensity (Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

More intense Stable Less intense

65% 61%

26% 27% 10% 12%

Q3 '15 Q4 '15 Q1 '16

0%

100%

16% 16%

65% 54%

20% 30%

0%

100%

41% 33%

59% 66%

0% 2% 0%

100%


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RegulatoryAffairs2016Q1ResultsAnalysis

29

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Confidence in the regulatory environment is

steady, but low

Base: All Respondents Q28. What is your overall confidence in the regulatory environment? Q28B. What is driving your overall level of confidence in the regulatory environment?


Overall Confidence in Regulatory Environment

(Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)


Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

Inconsistent regulations 16% 9% 21%

High FDA approval rates 18% 15% 19%

Improved FDA interactions/responsive 22% 24% 18%

Good regulatory group 10% 9% 16%

Consistent principles by FDA 12% 19% 9%

History/experience with FDA 18% 7% 8%

FDA leadership changes 0% 0% 6%

Lack of experience at FDA 8% 9% 3%

Political pressure/environment 0% 0% 3%

FDA personnel issues 0% 0% 3%

Payers uncertainity 4% 0% 2%

Delays in product approval 4% 0% 0%

Others 18% 28% 12%Ô

None/nothing 0% 0% 2%

31% 22%

53% 58%

16% 19%

Q3 '15 Q4 '15 Q1 '16

0%

100%


30

A partnership by:

Confidence is high among CEOs that they will

file an NDA or BLA in 5 years; short term

confidence remains low

Base: All Respondents Q29. How confident are you that your company will file an NDA or BLA for one or more products in the next…?


Confidence that Company will File an NDA or BLA for One or More Products in the Next… (Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

1 Year

2 Years

3 Years

4 Years

5 Years

14%

3% 10% 10%

77% 87%

0%

100%

22%

10% 14% 24%

65% 66%

0%

100%

39% 31%

26% 27%

35% 42%

0%

100%

53% 43% 28% 37% 20% 19%

0%

100%

69% 64% 22%

30% 10% 6%

Q3 '15 Q4 '15 Q1 '16

0%

100%


31

A partnership by:

Geographic distribution of clinical trials is consistent with previous quarters. CEOs are increasingly less

confident in receiving approvals

Base: All Respondents Q30. In which geographies are you conducting clinical trials? Q31. How confident are you that you will receive approval for a new indication for an existing product in the next 18 months?

Clinical Trial Geographies Confidence in Receiving Approval for a New Indication for an Existing Product in the

Next 18 months


96%

51%

43%

9%

Q3 ‘15 (n=51)

Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

United States 90% 87%

Rest of World 41% 39%

Europe 57% 46%

Japan 16% 9%

3%

10%

25%

61%

Q3 ‘15 (n=51)

Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

Very confident 12% 6%

Somewhat confident

12% 9%

Not confident 10% 7%

I currently do not have any pending approvals

for new indications on existing products

67% 78%

Ó

32

A partnership by:

The frequency of FDA approvals is expected to

remain stable over the next 18 months

Base: All Respondents Q32. How do you think the frequency of FDA approvals will change over the next 18 months?

Expected Change in Frequency of FDA Approvals Over the Next 18 months (Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

20% 16%

71% 76%

10% 8%

Q3 '15 Q4 '15 Q1 '16

0%

100%

Increase Remain stable Decrease


33

A partnership by:

41% 39% 53% 52%

6% 9% 0%

100%

Confidence in global approval process is

moderate in US, EU, & Japan; low throughout

rest of world

Base: All Respondents Q33. How confident are you in the regulatory approval process in…


Confidence in Global Regulatory Approval Processes (Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

United States

Europe

Japan

Rest of World

37% 33% 61% 61%

2% 6% 0%

100%

12% 10%

59% 58% 29% 31%

0%

100%

12% 5%

51% 45% 37%

51%

Q3 '15 Q4 '15 Q1 '16

0%

100%


A partnership by:

CommercializaBon2016Q1ResultsAnalysis

35

A partnership by:


Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

No commercializing infrastructure 31% 32% 39%

Have a good team of commercializing 18% 19% 12%

Limited resources/less experienced personnel 12% 15% 9%

Development/early stage of company development 0% 0% 8%

Have experienced personnel 6% 11% 6%

Market size/world wide presence 0% 0% 6%

Do not have marketing products 8% 6% 3%

Outsource commercialization activities 8% 4% 2%

Have prior experience in commercialization 10% 2% 2%

No prior experience in commercializing 4% 4% 0%

Others 2% 9% 16%

A lack of commercializing infrastructure &

resources is driving low confidence in

commercialization capabilities

Base: All Respondents Q34. What is your overall confidence in your company’s current commercialization capabilities? Q34B. What is driving your overall level of confidence in your company’s current commercialization capabilities?

Overall Confidence in Commercialization Capabilities

(Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

22% 19%

29% 25%

49% 55%

Q3 '15 Q4 '15 Q1 '16

0%

100%



36

A partnership by:

Company will launch a new product or new indication for

an existing product

Company will achieve the forecasted revenue for a new

or follow-on product

Company will achieve a positive change in formulary

status

Majority of CEOs are not planning to launch a new product, don’t have any forecasted revenue for a new

product, and don’t expect a formulary status change

Base: All Respondents Q35. How confident are you that your company will launch a new product or new indication for an existing product in the next 18 months Q36. How confident are you that your company will achieve the forecasted revenue for a new or follow-on product in the next 18 months? Q37. How confident are you that your company will achieve a positive change in formulary status in the next 18 months?


I am not planning to launch a new product or new indication /I currently do not have any forecasted revenue for a new or follow-on product/I will not have a formulary status change

12%

3%

8% 9%

2% 9%

78% 79%

Q3 '15 Q4 '15 Q1 '16

0%

100%

28% 13% 6% 8% 4%

15% 63% 64%

0%

100%

20% 9% 12%

15%

2% 8%

67% 69%

0%

100%

(n=51) (n=54) (n=67)

Ó

Ó Ô


37

A partnership by:

Independent commercialization drops further as

more CEOs partner with external parties

Base: All Respondents Q38. Are you planning to commercialize independently or in partnership with an external party?

Commercialization Plan


9%

70%

21%

Yes, I plan to commercialize independently

28% 17%

I will commercialize in partnership with external partners

47% 61%

I will outsource more than 50% of my commercialization efforts

26% 22%

Q3 ‘15 (n=51)

Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

A partnership by:

BusinessModelandWorkflow2016Q1ResultsAnalysis

39

A partnership by:

CEOs retain confidence in ability to find the

appropriate supporting resources

Base: All Respondents Q39. How confident are you that you can find the appropriate internal resources to support your clinical and commercial portfolio? Q39B. What is driving your overall level of confidence in your ability to find the appropriate internal resources to support your clinical and commercial portfolio?

Confidence in Ability to Find Appropriate Internal Resources to Support Clinical/

Commercial Portfolio (Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)


Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

Availability of qualitative/skilled personnel 26% 11% 15%

Have prior experience 6% 4% 13% Mergers and acquisition/Downsizing created large pool of talent 8% 13% 10%

Attracting experienced industry professionals 10% 11% 9%

Outsource the activities 0% 7% 8% Interest from pharmaceutical industry in our products 0% 0% 8%

Have a good team of personnel 0% 0% 6%

Multiple geographic locations 12% 6% 5%

Strong network 6% 4% 5% Limited budget to maintain FTEs/tough labor market 4% 2% 5%

Capital structure 0% 0% 5%

Intense hiring competition 18% 7% 3%

Difficult to hire the best people 4% 6% 3%

Adequate staffing 4% 13% 0%

Others 28% 17% 15%

None/nothing 2% 0% 0%

49%

42% 45%

49%

6% 9%

Q3 '15 Q4 '15 Q1 '16

0%

100%

Very confident Somewhat confident

Not confident


40

A partnership by:

Model is still to outsource non-core business functions. Although most CEOs still plan to increase

staff, large scale (10%+ increase) hiring plans are slowing

Base: All Respondents Q40. Is your business model to build internal capabilities, outsource discreet functions, or outsource all functions that are not core business? Q41. Which of the following best describes your hiring plans in the next 18 months?

Description of Business Model Hiring Plans in the Next 18 Months

37% of CEOs who plan to increase staff by 10%

+ have pipeline assets in oncology


Q3 ‘15 (n=51)

Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

Outsource functions that

are not core

business

57% 59%

Outsource discreet

functions 29% 32%

Build internal capabilities

14% 9%

12%

8%

25%

52%

3%

Q3 ‘15 (n=51)

Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

No change in overall staffing

2% 13%

Increase staff by 1%-5%

4% 7%

Increase staff by 6%-10%

16% 15%

Increase staff by more than 10%

78% 63%

Decrease staff 0% 2%

61%

33%

6%

Ó

41

A partnership by:

Unlike in previous quarters, overall staffing in

corporate leadership is largely expected to

remain the same

Base: All Respondents Q42. What staffing changes do you anticipate making to the following functions in the next 18 months?

Areas of Anticipated Staffing Changes in the Next 18 months (Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

55%

34% 43%

61%

3% 2% 2% 0%

100%

55% 46%

41% 42%

0% 4% 12%

0%

100%

28% 13% 2% 6%

0%

71% 81%

0%

100%

20% 8%

8% 6%

2%

73% 85%

0%

100%

18% 12% 8% 10% 2%

73% 78%

Q3 '15 Q4 '15 Q1 '16

0%

100%

Corporate Leadership

Business Development & Licensing

Field Force (sales, sales management)

Payor Marketing

Key Account Management

Will add staff Overall staffing will remain the same Will remove staff I do not have this function

Ô

Ó

Ô Ó


42

A partnership by:

Despite a directional decline, staffing emphasis

continues to be on clinical development

Base: All Respondents Q42. What staffing changes do you anticipate making to the following functions in the next 18 months?

Areas of Anticipated Staffing Changes in the Next 18 months (Q3 ‘15 n=51, Q4 ‘15 n=54, Q1 ‘16 n=67)

Of those looking to increase staffing in clinical

development, 46% have pipeline assets in oncology.

Will add staff Overall staffing will remain the same Will remove staff I do not have this function

26% 12% 6% 12%

2% 2%

67% 75%

0%

100%

10% 9% 14% 13%

2%

77% 76%

0%

100%

84% 72%

16% 21% 8%

0%

100%

53% 39%

16% 21% 2% 2%

29% 39%

0%

100%

18% 12%

8%

19%

3%

75% 66%

Q3 '15 Q4 '15 Q1 '16

0%

100%

Brand Marketing

Health Economy

Clinical Development

Medical Affairs

Commercial Excellence

Ó

Ó


A partnership by:

LargestRisktoBusiness2016Q1ResultsAnalysis

44

A partnership by:

Capital stability and clinical results persist as

the largest concerns to business

Base: All Respondents Q43. What is the single largest risk to your business in the next 18 months?

Single largest risk to your business in the next 18 months

Q3 ‘15 (n=51)

Q4 ‘15 (n=54)

Q1 ‘16 (n=67)

Capital/financing/funding stability 35% 41% 40%

Clinical trial failure/clinical results 33% 37% 30%

FDA/regulatory approvals/outcomes 16% 9% 8%

Competition 0% 0% 6%

Partnership environment 0% 0% 5%

Technical execution 4% 2% 2%

Payer uncertainity 4% 2% 0%

Global economy downturn 8% 0% 0%

Others 6% 11% 10%


A partnership by:

Thankyou!

SteveGirling

IpsosHealthcare

203-840-3518

[email protected]

KevinHampton

KineBcos

919-678-3206

[email protected]

SaraDemy

Demy-Colton

212-288-4233

[email protected]

Documents

2016 Q1 Results Analysis - Kineticos Life Sciences€¦ · Company performance/depends on global markets/IPO environment 18% 20% Discussions with Investors/Potential investor groups/Bankers