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Biopharma Dealmaking

October 2018

How the Year’s Top Licensing and M&A Deals Are Changing the Industry Landscape

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Expert SpeakersPaul D'Souza, Pharmaceutical Analyst at Clarivate Analytics

Paul is a pharmaceutical analyst in the Cortellis Deals Intelligence team at Clarivate Analytics

Paul has 11 years of experience engaging with pharmaceutical customers and generating leads by creating quarterly thought leadership reports focusing on major pharma M&A and licensing activity through deal benchmarking and competitor analysis

He has a BSc in Physiology/Pharmacology and an MBA from Manchester University

Donald Johnston, Senior Marketing Communication Director at Clarivate Analytics

Donald is senior marketing communication director at Clarivate Analytics

Don has worked with Clarivate’s Life Sciences solutions, particularly the BioWorld and BioWorld MedTech news services, for more than two decades

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o Key metrics foretelling the future business health of the life sciences o Dealmaking environmento Investment levels

o Outlook for 2018o All indications are that 2018 will finish as another mega-dealmaking year in both the number of

transactions and the dollars involved.

• Snapshots of the licensing and M&A environment

Top 20 biopharma licensing deals for Q2

Profiles of the top 3 licensing deals

Top 20 M&A deals for Q2

Profiles of the top 3 M&A deals

APAC licensing and M&A deals for Q2

H2 outlook

Dealmaking – The pulse of the industryBiopharma Dealmaking 2018

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NME approvals from licensing and M&ABiopharma Dealmaking 2018

*Source: 2018 CMR Pharmaceutical R+D Factbook, Clarivate Analytics

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o Dealmaking 2018

Dealmaking by therapeutic area Biopharma Dealmaking 2018

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What makes a good deal? From Cortellis Deal of the Year discussion*

o Ambition – “Transformative” was perhaps the most enthusiastic endorsement that came up about a

deal.

o Creativity – Partner-finding, deal structure, indications/rights, spin-out that kept “the innovation

rolling.”

o Cool science – What are the first things that you notice about a deal? The players, the dollars, the

technology.

o Also: Benchmark $ value

* Ingredients for a ‘good deal’ in biopharma: Ambition, creativity, win-wins, cool science, cross-border intrigue, Life Sciences Connect, Jan. 30, 2018

Ingredients for a ‘good deal’ in biopharma?Biopharma Dealmaking 2018

https://clarivate.com/blog/life-sciences-connect/ingredients-good-deal-biopharma-ambition-creativity-win-wins-cool-science-cross-border-intrigue/

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Cortellis Analytics Deals and Portfolio Review: State of the Industry

o Looking back at the deals of 2017:

More than half of the sellside companies involved in life sciences licensing transactions – 1,158 –

were headquartered in the U.S.

More than 50 different countries were represented

True global nature of today’s life sciences industry

Q2 analysis and H2 outlook

2018 Deals and Portfolio Review

"A convergence of industry maturity, deal flow, regulatory advances, increased capital and development programs makes this the most buoyant I've seen the sector in my near-decade-long tenure at AusBiotech."

– Lorraine Chiroiu, CEO, AusBiotech, as quoted in “Australian life sciences companies more optimistic than ever,” BioWorld, July 12, 2018

International focus (Cross-border intrigue)Biopharma Dealmaking 2018

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o Does the deal work for both parties? Time will tell! Deal observations from last year:

“Nice collaboration and separate option deal, offering upside to both partners.”

“Careful structuring of clinical stage options reduces risk for both parties.”

“Smartly structured early sale; true win-win. Timing was important.”

“I like the co-development angle and risk-sharing approach in a space that hasn’t had much

uptake. Sink or swim together.”

"What you have in this collaboration is two very like-minded, scientifically driven organizations that are coming together to bring very synergistic and complementary technologies to the field of CAR T cells and T-cell-based immunotherapy."

– Philip Gregory, CSO of Bluebird Bio Inc., describing deal with Regeneron Pharmaceuticals to discover, develop and commercialize cancer cell therapies, as quoted in “Regeneron, Bluebird ‘all in’ on cancer cell therapies in five-year pact,” BioWorld, August 7,2018

One final Deal of the Year comment, which puts the end result of all of this dealmaking into perspective: “Should be a win for patients.”

Win-winsBiopharma Dealmaking 2018

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o “Trends in rare disease investment, research and orphan drug development”

Jamie Munro, Global Practice Leader, Portfolio & Licensing, Clarivate Analytics, moderator of

panel in the therapeutic track

BIO-Europe, Nov. 5, Copenhagen

o “Cortellis 2018 Deals & Porfolio Revew”

Laura Vitez, Senior Deals Analyst, Clarivate Analytics

Jamie Munro, Global Practice Leader, Portfolio & Licensing, Clarivate Analytics

Jan. 7, 8 and 9, 2019, San Francisco

http://discover.clarivate.com/JPMDealsReview

More dealmaking focus …Biopharma Dealmaking 2018


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$270

$150

$150

$150

$100

$350$170

$425

$1,850$300

$515

$600 $750 $775

$805 $969

$1,008$1,035

$1,200

$1,000$1,370

$1,530 $2,000

$1,688 $2,800

$3,010

$1,780 $4,355

$813

$900

$1,100

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000

Biogen/Pfizer

Roivant/Poxel

Sanofi/Translate

Pfizer/Arvinas

Axovant/Oxford BioMedica

Incyte/Syros

Genentech/Lodo

Janssen/Theravance

Takeda/Denali

AbbVie/Voyager

Seattle/Pieris

Biogen/Ionis

Boehringer/OSE

Akcea/Ionis

Takeda/WAVE

Celgene/Prothena

Allogene/Cellectis

Kite/Sangamo

BMS/Nektar

Merck & Co/Eisai

Disclosed deal dollars ($M)Buyer/Seller

Upfront + equity ($M)Milestones ($M)Remainder/Mixture ($M)

Onc / LOnc / P2

Onc / DR

Onc / DR

Neuro / DRNeuro / P2

Neuro / PR

Neuro / DROnc / C

Onc / DRNeuro / DR

GI / P1Unk / DR

Hema / DRNeuro / P2Unk / DR

Infect / DREndo/Met / P3

Neuro / P1

Neuro / DR

Merck & Co/Eisai, BMS/Nektar and Kite/Sangamo were the top licensing deals

Biopharma Dealmaking 2018

Top 20 licenses in H1

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LicensorEisai

Will jointly develop and commercialize Lenvimaas monotherapy and in combination with Keytruda for multiple cancer types worldwide.

Will book sales and share development and marketing costs and profits equally.

Lenvima as monotherapy and in combination with Keytruda for cancer worldwide

Therapy Area: Stage at Signing:Cancer LaunchedTechnology: License Exclusivity:Immuno-oncology, UnknownMonoclonal antibody humanized, more…Territory: #Products/Options:World 2

Total Announced Size (USD): $5,755.00M

Committed Payments: Contingent Payments:Upfront: Total Milestones$300.00M $4,355.00MOption: Pre-Commercial: $650.00M $385.00MR&D Funding: Sales-Based:$450.00 $3,970.00MNotes:$300M upfront, $650M option fee, $450M R&D, $385M dev/reg and $3.97B sales milestones

LicenseeMerck & Co

Will jointly develop and commercialize Lenvimaas monotherapy and in combination with Keytruda for multiple cancer types worldwide.

Will have certain option rights and share development and marketing costs and profits equally.

Eisai & Merck sign $5.75B license to combine Lenvima with Keytruda for cancer


Top 3 licenses

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LicensorNektar Therapeutics

Will develop and commercialize NKTR-214 in combination with Opdivo and (Opdivo + Yervoy) against cancer worldwide.

Will lead worldwide commercialization activities for NKTR-214 combinations.

Exclusive rights to develop NKTR-214 in combination with Opdivo and Opdivo + Yervoy for cancer worldwide

Therapy Area: Stage at Signing:Cancer LaunchedTechnology: License Exclusivity:Immuno-oncology ExclusiveMonoclonal antibody humanized, more…Territory: #Products/Options:World 1

Total Announced Size (USD): $3,630.00M

Committed Payments: Contingent Payments:Upfront: Total Milestones$1,000.00M $1,780.00MEquity: Pre-Commercial: $850.00M $1,430.00MProfit split: Sales-Based:65/35% $350.00MNotes:$1B upfront, $850M equity, $1.43B development and $350M sales milestones, 65/35% profit split to Nektar

LicenseeBristol-Myers Squibb

Will develop and commercialize NKTR-214 in combination with Opdivo and (Opdivo + Yervoy) against cancer worldwide.

Will have an option to obtain rights to manufacture NKTR-214.

Nektar & BMS sign $3.63B license to combine NKTR-214 with Opdivo & Yervoy for cancer


Top 3 licenses

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LicensorSangamo Therapeutics

Will grant rights to zinc finger nuclease (ZFN) technology to modify genes to develop cell therapies for cancer worldwide.

Exclusive rights to develop and commercialize cell therapies for cancer worldwide using ZFN technology

Therapy Area: Stage at Signing:Cancer DiscoveryTechnology: License Exclusivity:Immuno-oncology ExclusiveChimeric antigen receptor T cell therapy, more… Territory: #Products/Options:World Multiple – Unknown

Total Announced Size (USD): $3,160.00B

Committed Payments: Contingent Payments:Upfront: Total Milestones$150.00M $3,010.00MEquity: Pre-Commercial & Sales: - $1,260.00MR&D Funding: Sales-Based:- $1,750.00MNotes:$150M upfront, $3.01B in dev/reg and sales milestones plus tiered royalties

LicenseeKite Pharma

Will be responsible for all development, manufacturing and commercialization of cell therapies for cancer worldwide.

Will be responsible for agreed upon expenses incurred by Sangamo.

Sangamo & Kite sign $3.16B license to develop genetically engineered anticancer cell therapies


Top 3 licenses

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$1.2

$1.3

$1.5

$1.6

$1.9

$2.0

$2.1

$2.3

$2.4

$2.4

$2.8

$3.7

$4.2

$4.8

$1.1

$8.7

$9.0

$11.6

$13.0

$62.3

$5.9

$0 $10 $20 $30 $40 $50 $60 $70Disclosed deal dollars ($B)

Industry

Upfront + equity ($B)

Milestones ($B)

Takeda/Shire

Sanofi/Ablynx

Therapeutics

Therapeutics

Therapeutics

Therapeutics

Therapeutics

Therapeutics

Therapeutics

Therapeutics

Therapeutics

Devices

Diagnostics

Therapeutics

Therapeutics

Devices

Diagnostics

Technology

Therapeutics

Devices

Therapeutics

Therapeutics

Sanofi/Bioverativ

Celgene/Juno

Novartis/AveXis

Celgene/Impact Biomedicine

P&G/Merck’s Consumer Health

CVC/FIMEI

Fortive/Ethicon

Roche/Foundation Medicine

Servier/Shire’s Oncology business

Advent/Sanofi’s Zentiva

Platinum Equity/J&J’s LifeScan

Danaher/Integrated DNA

Roche/Flatiron Health

Lilly/ARMO Biosciences

CHD/Sirtex Medical

Akebia/Keryx

Korea Kolmar/CJ Healthcare

GSK/Novartis JV

* Only top 20 M&A deals by value ($B) for companies focusing on therapeutics and/or technology, devices and diagnostics were considered

Takeda/Shire, GSK/Novartis JV and Sofi/Bioverativ were the top M&As


Top 20 M&As in H1

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Target Company Deal Value (USD)Shire $62.3B

Shire is a global biotechnology company developing treatments for rare, neurological and gastrointestinal diseases and regenerative medicine.

Market Segment: Prior Year Total Revenues (USD):Therapeutics $15,610.00MLeading Technology Cash On Hand at Acquisition (USD):Small molecule products $511.80MTherapy Area: Shares Outstanding:Diversified 913.52Most Advanced Product:LaunchedLeading Products:Vyvanse, Lialda, Adderall XR

AcquirerTakeda

Upfront Cash (USD):$62,320.00MContingent Payment (USD):-

Offer Price Per Share:$68.10Prior Close Sh. Price Premiums ($):01% (1-Day): 161.3905% (5-Day): 159.5030% (30-Day): 128.54

Announced: 05/08/2018 Closed:

Takeda approaches Shire for $62.3B


Top 3 M&As

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Target Company Deal Value (USD)GSK/Novartis OTC Consumer Healthcare JV $13B

The OTC Consumer Healthcare joint venture combined the OTC businesses of GSK and Novartis, owned 65/35% respectively.

Market Segment: Prior Year Total Revenues (USD): Therapeutics -Leading Technology Cash On Hand at Acquisition (USD): OTC product, small molecules -Therapy Area: Shares Outstanding:Diversified -Most Advanced Product:LaunchedLeading Products:Nicotinell. Panadol, Sensodyne

AcquirerGlaxoSmithKline


Offer Price Per Share:-Prior Close Sh. Price Premiums ($):01% (1-Day): -05% (5-Day): -30% (30-Day): -

Announced: 03/27/2018 Closed: 06/01/2018

GSK gains Novartis’ 35% stake in their OTC Consumer Health JV for $13B


Top 3 M&As

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Target Company Deal Value (USD)Bioverativ $11.6B

Bioverativ is a biopharmaceutical developing treatments for hemophilia and other rare blood disorders.

Market Segment: Prior Year Total Revenues (USD):Therapeutics $887.40MLeading Technology Cash On Hand at Acquisition (USD):Small molecule products $224.10MTherapy Area: Shares Outstanding:Hematology 108.10Most Advanced Product:LaunchedLeading Products:BIVV-001, Alprolix, BIVV-020

AcquirerSanofi


Offer Price Per Share:$105.00Prior Close Sh. Price Premiums ($):01% (1-Day): 64.1105% (5-Day): 63.7530% (30-Day): 50.68

Announced: 01/21/2018 Closed: 03/08/2018

Sanofi targets Bioverativ for $11.6B


Top 3 M&As

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$3,479

$10,409

$359 $11 $17 $246 $1

104 99

5348

34

20

11

0

20

40

60

80

100

120

0

2000

4000

6000

8000

10000

12000

China Japan South Korea Australia India Hong Kong Taiwan

Num

ber o

f dea

ls

Deal

size

USD

(mill

ion)

Company HQ

Total disclosed deal size (USD million) Number of deals

China-based firms had the highest deal volume; Japan-based companies had the highest total deal value


APAC licenses – breakdown by HQ

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HQ Licensor HQ2 Licensee Asset Indication Deal ($M)

USA SAGE JAP Shionogi SAGE-217 Depression 575UK AstraZeneca CHN Luye Seroquel Bipolar/schizo 546USA Agios CHN CStone Tibsovo AML 424USA Blueprint CHN CStone Avapritinib

TyK inhibitorsCancer 386

JAP TMS USA Biogen TMS-007 Stroke 357CHN Jiangsu Hengrui USA TG Therapeutics TG-1701 Hematologic

malignancies351

USA Puma CHN CANbridge Neratinib Breast cancer 255

CHN Jiangsu Hengrui USA Arcutis SHR-0302 Rh Arthritis 233KOR Dong-A USA NeuroBo DA-9801,

DA-9803

Diabetic neuropathy Neurodegeneration

180

USA Karyopharm CHN Antengene Verdinexor Selinexor, Eltanexor, KPT-9274

Viral,Cancer

162

Top licensing activity for APAC-based companies spanned across various therapy areas


APAC licenses – top deals in Q1

Sheet1

HQLicensorHQ2LicenseeAssetIndicationDeal ($M)

USASAGEJAPShionogiSAGE-217Depression575

UKAstraZenecaCHNLuye SeroquelBipolar/schizo546

USAAgiosCHNCStone Tibsovo AML424

USABlueprintCHNCStone AvapritinibTyK inhibitorsCancer386

JAPTMSUSABiogenTMS-007Stroke357

CHNJiangsu HengruiUSATG TherapeuticsTG-1701Hematologic malignancies351

USAPumaCHNCANbridge NeratinibBreast cancer255

CHNJiangsu HengruiUSAArcutisSHR-0302Rh Arthritis233

KORDong-AUSANeuroBoDA-9801,

DA-9803Diabetic neuropathy Neurodegeneration180

USAKaryopharmCHNAntengene Verdinexor Selinexor, Eltanexor, KPT-9274 Viral,Cancer162

20

$64,117

$1,718$74

$655$0

$1,200$0 $0

11

55

2 2

1 1 1

0

2

4

6

8

10

12

0

10000

20000

30000

40000

50000

60000

70000

Japan China India Australia Hong Kong Korea Singapore Taiwan

Num

ber o

f dea

ls

Deal

size

USD

(mill

ion)

Company HQTotal disclosed deal size (USD million) Number of deals

Japan-based firms had the highest deal volume and the highest total deal value


APAC M&As – breakdown by HQ

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HQ Target HQ2 Buyer Key assets Indiation ($M)AUS SIRTeX CHN CHD

InvestmentsRadiation Liver cancer 1,438

KOR CJ Healthcare KOR Korea Kolmar Epokine;Leukokine

Anemia 1,200

BEL TiGenix JAP Takeda Alofisel Perianal fistula 613AUS Viralytics USA Merck & Co Cavatak;

EvatakCancer 394

JAP Takeda's stake in Guangdong Techpool

CHN Shanghai Pharm

Roan;Kail ikang;Kall ikrein

Pancreatitis;Cerebral infarction

280

AUS Elastagen IRE Allergan Recombinant human tropoelastin

Dermatologicalwounds

261

USA Universal Cells JAP Astellas Allogeneic T-cells

Immune-cancer 103

Top M&A activity for APAC-based companies focused mainly on cancer


APAC M&As – top deals in Q1

Sheet1

HQTargetHQ2BuyerKey assetsIndiation($M)

AUSSIRTeXCHNCHD InvestmentsRadiation Liver cancer1,438

KORCJ HealthcareKORKorea KolmarEpokine;LeukokineAnemia1,200

BELTiGenix JAPTakeda AlofiselPerianal fistula613

AUSViralyticsUSAMerck & CoCavatak;EvatakCancer394

JAPTakeda's stake in Guangdong TechpoolCHNShanghai PharmRoan;Kailikang;KallikreinPancreatitis;Cerebral infarction280

AUSElastagenIREAllerganRecombinant human tropoelastinDermatologicalwounds261

USAUniversal CellsJAPAstellasAllogeneic T-cellsImmune-cancer103

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Licensor: Affimed

Licensee: Genentech

Focus: Cancer

Key assets: Anticancer

Stage: Discovery

Deal value: $5,05B

Licensor: Sutro

Licensee: Merck & Co

Focus: Autoimmunity/cancer

Key assets: cytokine derivatives

Stage: Discovery

Deal value: $1,66B

Licensor: Mologen

Licensee: Oncologie

Focus: Cancer

Key assets: MGN-1601

Stage: Registered

Deal value: $1,34B

Licensing activity continues to peak the multi-$B mark


H2 Outlook - licenses

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Target: Ziylo

Buyer: Novo Nordisk

Focus: Diabetes

Key assets: Synthetic glucose binding molecules

Stage: Discovery

Deal value : $800M

Target: Agilis Biotherapeutics

Buyer: PTC Therapeutics

Focus: CNS diseases

Key assets: AGIL-AADC; AGIL-FA

Stage: Phase III; Discovery

Deal value : $945M

Target: Adapt Pharma

Buyer: Emergent BioSolutions

Focus: Opiate dependence

Key assets: Narcan (naloxoneformulation)

Stage: Launched

Deal value : $735M

* Only companies focusing on therapeutics were considered

M&A activity continues to peak the multi-$B mark


H2 Outlook – M&As

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o “Trends in rare disease investment, research and orphan drug development”

Jamie Munro, Global Practice Leader, Portfolio & Licensing, Clarivate Analytics, moderator of

panel in the therapeutic track

BIO-Europe, Nov. 5, Copenhagen

o “Cortellis 2018 Deals & Porfolio Revew”

Laura Vitez, Senior Deals Analyst, Clarivate Analytics

Jamie Munro, Global Practice Leader, Portfolio & Licensing, Clarivate Analytics

Jan. 7, 8 and 9, 2019, San Francisco


More dealmaking focus …Biopharma Dealmaking 2018


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o Paul D'Souza, Pharmaceutical Analyst, Clarivate Analytics

o Elisabet Cruces, Companies & Markets Content Manager, Clarivate Analytics

o Donald Johnston, Senior Marketing Communications Director, Clarivate Analytics

Questions?

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Clarivate Analytics Life Sciences

Clarivate Analytics is the global leader in providing trusted insights and analytics to accelerate the pace of innovation.

Building on a heritage going back more than a century and a half, we have built some of the most trusted brands across the innovation lifecycle, including Web of Science, Cortellis, Derwent, Techstreet, CompuMark, andMarkMonitor.

Today, Clarivate Analytics is a new and independent company on a bold entrepreneurial mission to help our clients radically reduce the time from new ideas to life-changing innovations.

Cortellis Competitive IntelligenceLeading pipeline database for depth and breadth of content

Cortellis Deals IntelligenceRapid insights into critical deal making trends

Cortellis Regulatory IntelligenceMost comprehensive regulatory content and analysis

Cortellis Clinical Trials IntelligenceBroadest source of clinical trials intelligence

MetaCoreProprietary toolbox for discovery of biological pathways

Integrity & Drug Research AdvisorUnique provider of multifaceted drug research content

BioWorld & BioWorld MedTechDaily biopharma and medical device news services

How the Year’s Top Licensing and M&A Deals Are Changing the Industry Landscape� Expert Speakers�Dealmaking – The pulse of the industryNME approvals from licensing and M&ADealmaking by therapeutic area Ingredients for a ‘good deal’ in biopharma?International focus (Cross-border intrigue)Win-winsMore dealmaking focus …Slide Number 10Top 3 licensesTop 3 licensesTop 3 licensesTop 20 M&As in H1Top 3 M&AsTop 3 M&AsTop 3 M&AsAPAC licenses – breakdown by HQAPAC licenses – top deals in Q1APAC M&As – breakdown by HQAPAC M&As – top deals in Q1H2 Outlook - licensesH2 Outlook – M&AsMore dealmaking focus …Questions?Clarivate Analytics Life Sciences

Documents

What Is A rare Disease? - Clarivate Analytics...BIO-Europe, Nov. 5, Copenhagen ... Target Company Deal Value (USD) GSK/Novartis OTC Consumer Healthcare JV $13B. The OTC Consumer Healthcare