“diligence issues / growth by acquisition strategy” · • primary business: product partnering...
TRANSCRIPT
“Diligence Issues / Growth By Acquisition Strategy”
www.canaccordadams.com
OVERVIEW PRESENTATION
Boston – New York – San Francisco – Houston – Chicago – London – Vancouver – Calgary – Toronto – Montreal
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Launched in January 2006 with the merger of Canaccord Capital and Adams Harkness
Publicly listed on both the Toronto Stock Exchange as well as London’s Alternative Investment Market
2007, 577 completed transactions (201 lead-managed equity) with a deal value of approximately $42 billion
53% employee owned
Able to list companies on seven exchanges in three countries
Significant footprint in the Life Sciences
The Canaccord Adams Platform
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Calgary
San FranciscoNew York
Boston
MontrealToronto
London
Houston
VancouverCalgary
San FranciscoNew York
Boston
MontrealToronto
London
Houston
Calgary
San FranciscoNew York
Boston
MontrealToronto
London
Houston
Vancouver
Chicago
Calgary
San FranciscoNew York
Boston
MontrealToronto
London
Houston
VancouverCalgary
San FranciscoNew York
Boston
MontrealToronto
London
Houston
Calgary
San FranciscoNew York
Boston
MontrealToronto
London
Houston
Vancouver
Chicago
Global Presence
The Canaccord Adams Platform
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$0
$100
$200
$300
$400
$500
$600
$700
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FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
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mm
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-$20
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Revenue ($mm) Net Income ($mm)
The Canaccord Adams Platform
Canaccord Capital’s Financial Record
Note: Excludes one-time charges
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600 companies covered
67 research analysts
8 focus sectors
#1 ranked research
StarMine, Brendan Wood, Thomson Extel
Frequent media appearances
CNBC, Bloomberg
Over 1,500 institutions covered
100+ traders, sales/traders & market makers
Market making
700 companies
7 exchanges
Sales specialists by geography and industry
Experienced private capital group
One integrated team
80 investment bankers
2007 transaction experience
577 total transactions
201 lead or co-lead managed equity transactions
$42B in deal value
Investment Banking Research Sales & Trading
The Canaccord Adams Platform
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JSBJSB--Partners: Company OverviewPartners: Company Overview
global partners in life science transactions
20082008
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Confidential Confidential
Boston MunichBoston Munich
JSBJSB--Partners: Adding Value in Product CollaborationsPartners: Adding Value in Product Collaborations
OUR FOCUS:
• Transaction advisory firm with broker-dealer license serving life science companies
• Primary business: product partnering and licenses
• Expertise in running sell-side product auctions
WHO WE ARE:
• Senior team with broad operating experience, providing leverage to management
• Global presence (US, EU, Asian) and deep industry relationships
WHAT WE BRING:
• Track record of successfully closing product deals and M&A
99
Confidential Confidential
Boston MunichBoston Munich100
25 10 4 1
Case Study: Phase I Obesity Compound, Large PharmaCase Study: Phase I Obesity Compound, Large Pharma
Teaser CDA Indicative Offer
Term Sheet
Close deal
Clie
nt rN
PVOffered terms 5X
4 of top 10 Pharma
1010
Confidential Confidential
Boston MunichBoston Munich
JSBJSB--Partners: Adding Value in Product CollaborationsPartners: Adding Value in Product Collaborations
OUR FOCUS:
• Transaction advisory firm with broker-dealer license serving life science companies
• Primary business: product partnering and licenses
• Expertise in running sell-side product auctions
WHO WE ARE:
• Senior team with broad operating experience, providing leverage to management
• Global presence (US, EU, Asian) and deep industry relationships
WHAT WE BRING:
• Track record of successfully closing product deals and M&A
1111
Confidential Confidential
Boston MunichBoston Munich
Why JSBWhy JSB--Partners? Partners? …… A Successful TransactionA Successful Transaction
• Senior partners manage the project, no delegation
• Global reach – representation in the US, EU, and Asia
• Not only financial expertise, but also extensive bio-pharma industry experience
• Personal contacts with decision makers with both strategic and financial buyers
• Empower the seller by leveraging time and competition
• Complement internal BD resources to manage the surge in capacity
• Track record of success
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Confidential Confidential
Boston MunichBoston Munich
MunichMunich BostonBoston
JSB-Partners GmbHEmil-Geis Str. 4D-82031 GrünwaldGermanyT. +49-89-64948840F. +49-89-64948844
JSB-Partners LP30, Monument Square Concord, MA 01742USAT. +1-978-318-9799F. +1-978-318-6966
[email protected]@jsb-partners.com [email protected]@jsb-partners.com
[email protected]@[email protected]@[email protected]@jsb-partners.com
www.jsb-partners.com
Global PresenceGlobal Presence
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Material Presented for DiscussionSeptember 2008
Crosstree Capital Partners Overview – Clinical Development Services
Crosstree C
apital Partners Overview
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Crosstree Capital Partners Overview
Exclusive Sales
Acquisitions
Private Capital Raises
Strategic Advisory
Fairness Opinions / Valuations
Crosstree advises shareholders in sales, mergers and divestituresStrengths - Our deep industry knowledge and extensive industry contacts allow for a highly efficient and confidential transaction process
Service Capabilities Target Size
Crosstree offers equity and debt capital raising advisory to middle-market companiesStrengths – Our bankers have structured numerous complex transaction structures, from venture capital to senior bank debt
Crosstree provides assessment of strategic alternatives for companies considering new opportunities and threats Strengths – Our bankers have extensive experience in all facets of corporate finance; we always strive to provide objective, unbiased advice
Crosstree can perform transaction-related fairness opinions and general valuation projectsStrengths – Two of Crosstree’s founders are CFA charterholders, a designation focused on equity and enterprise valuation
Crosstree advises institutional and strategic investors pursuing platform, add-on and strategy re-defining acquisitions Strengths - Our comprehensive coverage of niche industry subsectors provides powerful insight into possible acquisitions
$10 - $250 MM Enterprise Value
$5 - $50 MM
Case-by-case
Case-by-case
$10 - $250 MM Enterprise Value
Crosstree C
apital Partners Overview
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Crosstree Capital Partners Overview
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Discovery Development & Validation Market Launch
Pre-Clinical Phase I – III Phase IV
ADME/ Tox
Animal Models
Pharmacokinetics
Pathology
Phase 0
Technology
Health Economics
MedicalCommunications
Laboratory Services
Adverse Events
Outcomes
Radioanalysis
GeneticToxicology
Neuropathology
PatientRegistries
Online TrainingElectronic Regulatory
Submissions
DataManagement Monitoring Registries
In-Vitro
Bio-Informatics
Clinical Project ManagementStaffing
Medical Writing
Non-Clinical IT Clinical IT
Micro-Dosing
IRB
Phase I Phase II Phase III
Recruiting
SMO Network
ECG Imaging
EDC
Database
CTMS
IVRS
IRS
RegulatorySafety
Multimedia
Post MarketingSurveillance
ePRO
DiseaseBurden
Pricing Support
EconomicEvaluation
DrugInteraction PharmacodynamicsBioavailability
Bio-SafetyTesting
Analytical Bio-Analytical
Medical Device CRO
Crosstree C
apital Partners Overview
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Crosstree Capital Partners Overview
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Medicinal Chemistry
Chemical Synthesis
Combinatorial Chemistry
Chiral Chemistry
Analytical Services
Preformulation Development
Stability Testing/ Storage
Qualification Services
QC/ Microbiology Testing
Regulatory Support
API Development
BCP Manufacturing
Pre-Clinical Manufacturing
Clinical Trial Manufacturing
Scale Up Services
Adverse Event Reporting
API Manufacturing
Scale Up/ Pilot Plant
Bioprocessing
Protein Manufacturing
Peptide Manufacturing
Protein Synthesis
Protein Purification
Peptide Synthesis
Peptide Purification
Fermentation
Cell Culture
Validation Services
Validation Services
Secondary Manufacturing
Clinical Trial
Randomization
Clinical Trial Kitting
Clinical Trial Labeling
Clinical Trial Distribution
Clinical Trial Supplies
Distribution
Lyophilization
Contract Labeling
Contract Packaging
Packaging & Labeling Logistic Services
Charecterizaion Services
Method Development
Formulation Development
Drug Delivery Development
Discovery Development & Validation Commercial Services
Warehousing/ Storage
Clinical Trial Packaging
Chemistry Services
Fill/ Finish
Product Development Primary Manufacturing
Sterile Fill/ FinishFinished Dosage Form
Crosstree C
apital Partners Overview
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Crosstree Capital Partners Overview
DIAGNOSTIC SERVICESRoutine diagnostic testingEsoteric testingDiagnostic imaging
DIAGNOSTIC LABORATORIESCentral laboratories
Reference laboratoriesSpecialty laboratories
Core laboratoriesImaging core laboratoriesCardiovascular core laboratories
LIFE SCIENCES TOOLS & CONSUMABLESAnalytical Instruments
ChromatographySpectroscopyNMR / IR, etc.
Molecular Biology Tools & ReagentsGenomic tools and reagentsProtein AnalysisMicro array technologies
Chemistry Based ReagentsLab Consumables
IN VITRO DIAGNOSTIC PRODUCTSImmunodiagnosticsMicrobiology testingMolecular diagnosticsPoint of care testing
IN VITRO DIAGNOSTIC INSTRUMENTS AND CONSUMABLESAutomated immunoassayClinical ChemistryGenetic TestingMolecular diagnosticsReagentsCollection devices
IN VIVO DIAGNOSTIC PRODUCTSContrast mediaFilm
IN VIVO DIAGNOSTIC INSTRUMENTSRadiographyMammographySonographyMagnetic resonance imagingNuclear ImagingImaging enabling tools
CLINICAL DEVELOPMENT SERVICESContract research organizationsSite management organizationsClinical recruitingTrial management systems
PRE-CLINICAL DEVELOPMENT SERVICESDiscovery research servicesBio analytical servicesChemistry servicesPre-clinical pharmacologyCombinatorial chemistry, screening and optimizationTarget selection and validation
CONTRACT SALES AND MARKETINGContract sales organizationsCRM software providersEducational services
CONTRACT MANUFACTURING ORGANIZATIONSPharmaceutical packaging and suppliesAPIs/Bulk pharmaceuticals and chemicals (APIs and BPCs)Finished dosage forms (FDFs)Specialty pharmaceuticals
Crosstree C
apital Partners Overview
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Crosstree Capital Partners Overview
Current Engagement
Prior/ Closed Engagement
M&A Overview
www.canaccordadams.com
Boston – New York – San Francisco – Houston – Chicago – London – Vancouver – Calgary – Toronto – Montreal
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Biotech M&A ReviewKey Life Sciences Trends Driving M&A Dialogue
� Focus of drug development shifts from organs to molecular pathways
� Dramatic expansion in number of potentially “druggable” proteinsR&D
Geographical Diversification
Large-Cap Pharma
Regulatory / Political
Financial
Clinical Diversification
� Worldwide diversification of assets and customers
� Pharma patent expiries and large stockpiles of cash
� Pharma buying biologics capabilities: Organon, CAT, MedImmune, Serono, GlycoFi, and Sirna
� Increased regulatory / political pressure (e.g. FDA’s focus on post-approval studies)
� Potential shifts in the ways drugs are tested, approved, marketed, and reimbursed – everything is on the table
� Burn rates accelerating
� Desire of innovator companies to retain downstream economics
� Diversification of clinical development risk
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Biotech M&A Review
The IPO Market Continues to be Selective
� While 2007 saw an increase in pre-money equity valuations, most of the companies can be considered specialty pharma or later stage life sciences companies
� Only late stage biotech companies are accessing the public markets through an IPO
� Only Sirtris and Amicus priced in 2007 with Phase II data
� Investors want to fund companies with meaningful catalysts within six to twelve months of IPO pricing
� M&A is viewed as a viable exit alternative to an IPO financing (Agensys, NovaCardia, Ilypsa, Domantis, Syntonix, Corus, GlycoFi)
Increased valuations driven by marketed products
Investors favoring less risky, later stage opportunities
Near-term milestones are essential
Robust M&A environment – a viable alternative
Over $60 Billion Dollars of Lost Sales
Partner 2007A 2008E 2009E 2010E 2011E 2012E Key Patent Expiry
$2.18 $2.30 $2.45 $2.42 $2.11 $1.81Lipitor, Caduet, Viagra, Detrol, Geodon, Xalatan
$7.22 $8.06 $8.42 $9.09 $8.52 $8.35 Plavix, Taxotere
$4.20 $4.50 $4.80 $4.96 $4.58 $4.10 Seroquel, Crestor
$3.21 $3.30 $3.72 $4.00 $4.45 $4.02 Cozaar / Hyzaar, Singulair
$3.52 $3.45 $3.51 $3.34 $3.07 $3.22 Effexor, Prevnar, Protonix
$1.38 $1.68 $2.00 $2.28 $2.34 $2.16 Plavix, Avapro
$3.55 $3.95 $4.45 $4.85 $5.16 $4.17 Zyprexa
EPS Estimates
Source: Wall Street Research
Biotech M&A ReviewLarge-Cap Pharma Companies Face Earnings Gaps
$14.4
$7.0
$17.9
$30.6
$26.4
$16.5
$0
$5
$10
$15
$20
$25
$30
$35
$40
2003 2004 2005 2006 2007 2008 YTD
Agg
rega
te T
ran
sact
ion
Va
lue
($
bn
)
Aggregate Transaction Value
Merger and Acquisition Activity in the Biotech Sector
Source: SDC and Company press releasesNotes: Excludes transactions less than $50 million or deals with undisclosed values2008 YTD as of 10/22/08
Biotech M&A Review
M&A Activity
Therapeutic Area Stage of Development
Oncology27%
Infectious Disease19%
Immunology16%
Respiratory8%
Opthalmology3%
Genito-urinary2%
Other25%
Pre-Clinical17%
Phase I13%
Phase II21%
Phase III19%
Marketed30%
Source: SDC and Company press releasesNotes: Excludes transactions less than $50 million or deals withundisclosed values from 2005 – 2008 YTD
Biotech M&A Review
Overview of Targets
Bolt-On vs. New Therapeutics Average Premia Paid
25.1%
43.2%
62.5%
66.8%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
2005 2006 2007 2008 YTD Range
30-Day Premia
Bolt-On89%
New Therapeutics11%
Source: SDC and Company press releasesNotes: Excludes transactions less than $50 million or deals withundisclosed values from 2005 – 2008 YTD as of 10/22/08
Biotech M&A Review
Premia Paid have Increased
Source: Company filings and press releasesNotes: Transaction value in millions of $USD
Acquiror / Target Strategic RationaleDate Announced Transaction Value
$725
$8,493
04/22/08
04/10/08
Significantly enhances GSK’s metabolic, neurology, immunology, and inflammation research efforts by establishing a presence in the field sirtuins, a recently-discovered class of enzymes that are believed to be involved in the aging process
Strengthens Takeda’s global oncology portfolio, led by Millennium’s flagship product Velcade, and further enhances its pipelineExpands Takeda’s global pipeline in GI, adding a novel anti-aplha4beta7 antibody and an oral CCR9 inhibitor for treatment of IBD
$33805/28/08Significantly enhances BMY’s development and commercialization capabilities to bring new treatment options for patientsAdds to BMY’s portfolio of clinical programs
$30006/16/08Broadens MRX’s aesthetics portfolio pipeline with LipoSonix’s body contouring technologyProvides access to the U.S. aesthetics market sooner with new technology
$56706/08/08Broadens HOLX’s range of diagnostic product offerings, and enhances the revenue and earnings growth potentialsBetter positions HOLX to take products quickly and effectively to market
$58107/15/08Enhances VPHM’s pipeline with a replacement therapy for patients with hereditary angioedemaAllows VPHM to enter a therapeutic market that is in need of more treatment options
$3,26108/12/08Expands R&D pipeline, especially in life-enhancing plasma-derived therapies and integrates manufacturing with greater efficiencyCreates a combined company with one of the broadest portfolios in the plasma-derived therapeutics industry
Biotech M&A Review
Overview of Recent M&A Activity
MARKET UPDATE
28Project Liferay
MARKET U
PDATE
29Project Liferay
MARKET U
PDATE
30Project Liferay
MARKET U
PDATE
31Project Liferay
MARKET U
PDATE
32
Panel Discussion