value destruction. q4 2008 - bionest...

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Bionest Partners19 rue du Général Foy75008 ParisFranceTel: +33 1 58 05 14 00

Tower 49, 12th floor12 East 49th StreetNew York, NY 10017 USATel: +1 (646) 386 2900

Frédéric Desdouits

Managing Partner

[email protected]

Georges-David Medina

Partner

[email protected]

Catherine Pichereau

Manager

[email protected]

Rodolphe Journoud

Associate

[email protected]

Thomas Ranson

Associate

[email protected]

Louis Labriffe

Analyst

[email protected]

Myriam Makhloufi

Analyst

[email protected]


Value Destruction.

Q4 2008

► Research-based Companies Valuation

Valuation plunged in 2008 but in anti-infective

► Initial Public Offerings

“Waterloo morne plaine”

► Follow-on Offerings

Market shut down even in the USA

► Equity Indices and Sub-Sector Trackers

Biotech indexes are surprisingly robust

Equity MarketsPages 2 to 5

Mergers & Acquisitions in Biotech

► Transactions

Americans buy American

► Partnerships at and above $100m

Strong value in early stage deals

Page 6 & 7

► Venture Capital

Medical device is hot

► Buy Outs

Smaller deals but healthcare sector still active

Private Equity ActivityPage 8 & 9

0

► We bring high quality financial services to the healthcare industry

Bionest Selected Completed Transactions

Financia

l Adviso

ry News

letter

0

5

10

15

20

25

524946434037343128252219161310741

# of 08 Weeks

Point Value in EURm

EU & US EU US

Research-based Companies Valuation


December 2008 of 10

Equity Markets

Global Overview

EU vs. US – All Therapeutic Areas EU & US – Breakdown by Therapeutic Area

Regional

What is Bionest MPVTM?

► Bionest MPV™ (Market Pipeline Value) is a proprietary

benchmarking approach that compares the value of 200

research-based, mainly loss making, publicly listed

companies in Europe and in the United States

► Bionest MPVTM is based on a pipeline scoring system and the

value of publicly traded companies

► This approach allows to quickly assess the value of a clinical-

stage portfolio of products with a limited amount of information

Regional & Therapeutic Historical Breakdown

* Based on Bionest's proprietary scoring system Note: Bubble size represents the number of companies

Sources: Bionest Research, FactSet, BioCentury, Dowjones

► In 2008, pipelines have slightly shrunk in particular in oncology

► Valuations have plunged but in the anti-infectious area


► Global downturn except the anti-infectious area which increased in the US

Bionest MPV™ Universe

Therapeutic Area

Cancer

38%

Neurology

16%

Anti-Infectious

14%

Cardiovascular

13%

Inflammatory &

Autoimmune

12%

Vaccines

5%

Others

2%

137

52

0

100

200

300

400

0 10 20 30 40

Average Pipeline Size (*)

Average MPV in EURm

US

EU

+23%

+18%

144

54

1Q08 2Q08 3Q08 4Q08

0

5

10

15

20

25

524946434037343128252219161310741

# of 08 Weeks

Point Value in EURm

Vaccines Cardiovascular Neurology

Infl. & Autoimmune Anti-Infectious Cancer

1Q08 2Q08 3Q08 4Q08

-32%

-36%

-31%

-19%

+11%

-41%-41%

-28%-34%

1Q08

4Q08

25

29

11 8427

0

100

200

300

400

500

0 10 20 30 40 50 60

Average Pipeline Size (*)

Average MPV in EURm

2429

2611

34

7934

2

52

5

1Q08

4Q08

234

277

135

430

221

388

106

641

469

749

37

360

61

94%28%

30%

31%

55%

64%

50%

82%

77%

55%

100%

72%

100%

70%

69%

45%

36%

50%

100%

18%

100%

23%

45%

19

0

100

200

300

400

500

600

700

800

1Q05 2Q053Q054Q051Q062Q063Q064Q061Q07 2Q073Q074Q071Q082Q083Q084Q08

Cumulative Amount Raised

Bars - in EURm

0

200

400

600

800

1 000

1 200

1 400

Last 12 Months Cumulative Amount Raised

Lines - in EURm

3

5

1

8

65

10

5 5

3

12

4

2

4

2

5

5

2

6

8

10

2

7

1

7 7

5

10

5

11

7

16

13

15

2

10

2 2

0

2

4

6

8

10

12

14

16

18

20

1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08

Cumulative Number of IPOs

Bars

0

5

10

15

20

25

30

Last 12 Months Cumulative Number of IPOs

Lines

Genfit

Alternext

Cytotools

Frankfurt

4SC

Frankfurt Zurich

NorDiag

Oslo Copenhagen

BioAlliance Wilex

Euronext Euronext Frankfurt

Prostrakan Ipsen Bioxell AlphaHelix Santhera Vita 34 Vivalis

London Euronext Zurich Stockholm Zurich Frankfurt Euronext

Topotarget Exonhit Curalogic Biovitrum Innate Tigenix AMT

Copenhagen Alternext Copenhagen Stockholm Euronext Euronext Euronext

Ardana Devgen NascaCell Genovis Biofrontera Cosmo Exiqon Hybrigenics

London Euronext Oslo Frankfurt Stockholm Frankfurt Zurich Copenhagen Alternext

Intercell Arpida Orexo Geneart Liponova Algeta Addex Merrion PCI Biotech

Vienna Zurich Stockholm Frankfurt Oslo Frankfurt Oslo Zurich Dublin Oslo

Paion Galapagos Speedel Jerini Renovo OctoPlus Cellectis GenOway MolMed Ipsogen

Frankfurt Euronext Zurich Frankfurt London Euronext Euronext Alternext Alternext Euronext Milan Alternext

1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

Biotec

Pharmacon

Onco

Methylome

Newron Pharma

Lifecycle

Pharma

AblynxThrombo-

genics

Clavis

Pharma

3Q08 4Q08

Initial Public Offerings


December 2008 of 10

Equity Markets

Cumulative Amount Raised and Number of IPOs

European Biotech Listings

FY 2008 IPO Focus: Nothing new since Q2, except withdraws


Note: in Europe and in the USA


EU vs. US – Amount Raised EU vs. US – Number of IPOs

US EUUS EU


Company Country

Company Name

Trading Place

� How to read it?

Alternext

Eurolist A

Eurolist B

Eurolist C

Other Exchanges

Companies listed in 2008 16 withdrawn IPOs during 2008

Follow-On Offerings


December 2008 of 10

Equity Markets

Europe

United States

FY 2008 Follow-On Focus: Nothing happened in Q4




0

53

0

150

55

99

0 0 0

3526

0

1116

253

4

1

11

2

4

1

2

1

0

50

100

150

200

250

300

350



Bars - in EURm

0

50

100

150

200

250

300

350


Lines - in EURm

735 709

1039

771

1950

467

1062

537

941

707

468

693

377

537

0

14 10

16

16

12

11

11

9

20

17

11

7

7

2

4

640

500

1 000

1 500

2 000

2 500



Bars - in EURm

0

1 000

2 000

3 000

4 000

5 000


Lines - in EURm

2008 EU Operations 2008 US Operations

50

60

70

80

90

100

110

Jan-08 Mar-08 Jun-08 Sep-08 Dec-08

Rebased Perform

ance

European Biotech (Abs.)

European Biotech (Rel. to Stoxx Pharma)

100

140

180

220

260

300

340


Absolute Perform

ance

Bionest Animal Health (Rel. to Pharma S&P 500)

Bionest Animal Health (Abs.)

40

50

60

70

80

90

100

110

120


Rel. Perf. to Nasdaq Biotech

Bionest Vaccines Bionest Inf. and Autoimmune

Bionest Cancer Bionest Neurology

40

50

60

70

80

90

100

110

120


Absolute Perform

ance

Bionest Vaccines Bionest Inf. and Autoimmune

Bionest Cancer Bionest Neurology

200

250

300

350

400

450

500

550

600


US Pharma S&P 500 (Abs.)

US Pharma S&P 500 (Rel. to S&P 500)

200

250

300

350

400

450

500

550

600


EUR Pharma Stoxx (Abs.)

EUR Pharma Stoxx (Rel. to Stoxx)

Equity Indices and Sub-Sector Trackers


December 2008 of 10

Equity Markets

Pharmaceutical Sector Absolute & Relative Performance

Bionest Therapeutic Trackers

European Pharmaceutical Sector Performance




EU Pharmaceutical Sector Performance US Pharmaceutical Sector Performance

Absolute Performance Relative Performance to Nasdaq Biotech

Animal Health Sector Performance Biotech Sector Performance

► Defensive sector for sure

► Converging performances

► Even the long visibility Animal Health sector is impacted

► Biotech are surprisingly robust

+21%

-21%

+45%

-17%

-25%

-27%

-31%

-34%

-18%

-19%

-20%

-25%

-31%

-44%

-14%

-24%

1

4

4

1

0

5

10

15

20

25

30

35

40

1Q08 2Q08 3Q08 4Q08

Cumulative Deal Size

EURbn

15

18

12

19

0

400

800

1Q08 2Q08 3Q08 4Q08


EURm

19

30

24 25

7

626

34 34

31410

0

5

10

15

20

25

30

35

40

1Q08 2Q08 3Q08 4Q08

Number of Deals

Transactions


December 2008 of 10

M&A in Biotech

Global Overview: Toward More Smaller Deals

Deal Split per Size

Major European Operations

Sources: Bionest Research, FactSet, BioCentury, Dowjones, MergermarketNote: Numbers on the top indicate the number of transactions

Note: Numbers on the top indicate the number of transactions

Disclosed transactions only

Undisclosed Deals

Disclosed Deals

Corporate deals worldwide in the pharma/biotech industryScope of our Analysis

Deals < €100m Deals > €500mDeals €100 < 500m

Sources: Bionest Research, FactSet, BioCentury, Dowjones, Mergermarket

Targets Localization vs. Acquirers Region

US EU RoWIn % of deals volume

2

16

96

0

5

10

15

20

25

30

35

40

1Q08 2Q08 3Q08 4Q08

Cumulative Deal Value

EURbn

Roche/

Genentech

Deal

3

8

8

5

0

400

800

1 200

1 600

2 000

2 400

2 800

1Q08 2Q08 3Q08 4Q08


EURm

RoW AcquirorsEuropean AcquirorsNorth American Acquirors

sanofi-aventis acquisitions in 2008 Roche – Genentech

► sanofi-aventis extended its generic capabilities by

acquiring more than 95% of the Czech company

Zentiva for CZK 1150 (approx EUR 43.2) per action

► Additional acquisition included Acambis (GBP

276m) and Symbion consumer (AUD 560m)

► Roche acquired Genentech on 12 march 2009 for

USD 95 per share in cash, or a total payment of

approx USD 46.8 billion

► Roche initiated an unsolicited offer on the 44% of

Genentech it didn't already own in July 2008, at

USD 89 per share, representing approx USD 43.7

billion

9%

51%

40%

69%

6%

25%

85%

6%9%

Target Location:

Note: Numbers on the top indicate the number of transactions; One deal therapeutic area not disclosed in Q3

Disclosed partnerships only with deal values equal to $100m or above

Partnerships at and above $100m


December 2008 of 10

Global Overview

Partnerships by Development Phase

Partnerships by Therapeutic Area

► Date 12/12/2008

► Acquirer Bristol-Myers Squibb

► Target Exelixis

► Dealed Product XL-184 & XL-281

► Status Phase III & Phase I

► Area Cancer

► Deal Value €640m

Global collaboration covering two

novel anti-cancer small molecules, XL-

184 and XL-281, respectively for

medullary thyroid cancer and

advanced solid tumor malignancies

Top Story Focus

Sources: Bionest Research, FactSet, BioCentury, Dowjones, Recombinant Capital



Note: Numbers on the top indicate the number of partnerships


Note: Numbers on the top indicate the number of transactions; Two deal phases not disclosed in Q3


M&A in Biotech

Biotech or pharma product transaction between global parties, for which the terms are disclosed, with a total deal value reaching $100m at least

Scope of our Analysis

► Big money in discovery and preclinical

► Performance in value for CNS and Inflammatory & Autoimmune, in volume for Cancer

280304

360423

313

208253

371

21

25

1919

2625

18

28

0

100

200

300

400

500

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08

Average Deal Size in EURm

0

5

10

15

20

25

30

Number of Deals

99

265222

508

689

306

141

372

147

202

85

376

189

132

409

194

292

375

183

87

335

119

373

795

264

646

299

0

100

200

300

400

500

600

700

800

Anti-Infectious Cancer Cardiovascular CNS Dermatology Gastrointestinal Gynaecology Inflammatory &Autoimmune

Metabolic Ophthalmology Respiratory &Allergy

Other

Average Deal Value in EURm

Q108 Q208 Q308 Q408

4

32

4

6

1

25

2

135

1

1

0

4 4 4 1 1 3 10 2 1 3 2 1 3 3 41 3 2 7 3 5 2 3 2 1 1 7

113

463

113

254

430469

196173

463

151

315

163

361

215

97113

163161

86

493

212181

485

115

427

232

119

0

100

200

300

400

500

600

MarketedApprovedFiledPhase IIIPhase II/IIIPhase IIPhase I/IIPhase IPreclinicalDiscovery

Average Deal Value in EURm

Q108 Q208 Q308 Q408

7 3 5 2 4 1 4 5 2 4 1 1 1 1 24 5 2 5 3 3 1 4 8 2 1 1

Last Quarter Variation

Private Fund Raisings in Europe


December 2008 of 10

Private Markets

Cumulative Amount Raised...

... per Development Stage

... per Selected Therapeutic Focus




Last Quarter Variation

0

50

100

150

200

250

300

350

1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08


in EURm

PC Ph I Ph II Ph III Mkt

-12%

-20%

-48%

+21%

-35%

0

20

40

60

80

100

120

140

160

180

4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08


in EURm

Autoimmune Diseases CNS Inflamation Vaccine Medical Devices

+0%

+171%

-3%

+5%

+32%

293

164

257

197

176

148

205

305

252 246

296 295

315

143

208

190

0

50

100

150

200

250

300

350


Cumulative Amount Raised by Quarter

Bars - in EURm

0

200

400

600

800

1 000

1 200

1 400

12 Months Cumulative Deal Value

Lines - in EURm

Buy Out Transactions in EuropePrivate Markets


December 2008 of 10

Global Overview of Q4 08 Buy Out Healthcare Transactions

Total Buy Out Deals vs. Healthcare Deals

2008 Healthcare Sector Distribution (Number of Deals)

Value of Deals Number of Deals Average Size of Deals

Target Company Sub Sector Value €m Target Country Acquirer

Generis Farmaceutica S.A. Pharmaceuticals 250 Portugal Magnum Capital Industrial Partners

Danfysik ACP A/S Medical Equipment 9 Denmark CapMan Technology

Sorin Group SpA Medical Equipment 17 Italy CID Investimenti S.r.l.

Flight Ambulance International Rent-A-Jet AG

Medical Equipment 15 Germany Marfin Investment Group Holdings S.A.

Bellco Srl Healthcare Provider 15 Italy Argos Soditic

Q-MED AB Medical Equipment 374 Sweden Ivytan AB

Avantium Technologies Healthcare Provider 18 NetherlandsCapricorn Ventures / ING Corp. Invt / AescapVenture / Navitas Capital

Biomnis Healthcare Provider 217 France Duke Street

SuperSonic Imagine Healthcare Provider 20 FranceNBGI PE / Crédit Agricole PE / Auriga / Edmond de Rothschild IP/ Bioam

Apitope Technology Pharmaceuticals 10 UK Limburgse Reconversie / Vesalius / Vinnof

Nurminem Logistics Oy Healthcare Provider 8 Finland Sentica Partners Oy

Cenexi SAS Pharmaceuticals 40 France Phinex

Carewatch Care services Ltd Healthcare Provider 47 UK Lyceum Capital

Veris Polska sp. Z Pharmaceuticals ND Poland Penta Investments

Total Q4 (1 deal undisclosed) 1040

Q4 Average Deal Amount (1 deal undisclosed) 80

December 2008

November 2008

October 2008

2 2 1 1

22 23

16

6

10%

7%

8%

17%

0

5

10

15

20

25

30

Q1 2008 Q2 2008 Q3 2008 Q4 2008

in EUR bn

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Proportion of the healthcare deals

Healthcare Sector Other Sectors Healthcare proportion Healthcare Sector Other Sectors Healthcare proportion

229 14 14

139 167 152

61

16%

5%

9%

23%

0

50

100

150

200

Q1 2008 Q2 2008 Q3 2008 Q4 2008

0%

5%

10%

15%

20%

25%

Proportion of the healthcare deals

Q1 2008 Q2 2008 Q3 2008

Healthcare Provider65%

Pharmaceuticals21%

Medical Equipment14%

Healthcare Provider56%Pharmaceuticals

22%



Pharmaceuticals18%


Medical Supplies5%

14 deals

22 deals

Q4 2008

14 deals


Pharmaceuticals29%


9 deals

9380

149 142

102127

255

134

0

50

100

150

200

250

300

Q1 2008 Q2 2008 Q3 2008 Q4 2008

in EUR m

All sectors Healthcare sector

Sources : Bionest Research, Private Equity Insight, Merger Market

This publication has been prepared by Bionest Partners (19 rue du Général Foy – Paris, France) and is provided solely for the information of the recipients who are expected to make their own investment decisions without undue reliance on this report. The information herein is not intended as an offer to buy or sell, or a solicitation to buy or sell any financial instrument. The information herein has been obtained from, and any opinions herein are based upon, sources believed to be reliable, but Bionest Partners makes no representation as to its relevance, accuracy or completeness and it should not be relied upon as such. As a result, Bionest Partners accepts no liability whatsoever for any direct or consequential loss arising from any use of this report or its contents.

This report shall not be reproduced, distributed or published by any recipient for any purpose without the prior consent of Bionest Partners.

All opinions and estimates herein reflect the judgement of Bionest Partners on the date of this report and are subject to modifications without notice. Any investments referred to herein may involve significant risks and are not necessarily available in all jurisdictions, may be illiquid and may not be suitable for all investors. The value of, or income from, any securities referred to herein may fluctuate and/or be affected by changes in exchange rates. Past performance is not indicative of future results. Investors are expected to make their own investment decisions without relying on this publication. Only investors with sufficient knowledge and experience in financial and business matters to evaluate the relevant merits and risks should consider an investment in any issuer or market discussed herein.

The information contained in this publication is not available to a person who would be categorized as a private customer under the rules of the FSA. To the extent that any securities, or any broker-dealer, investment adviser or other services, are deemed to be offered herein for purposes of U.S. law, such securities or services are not being offered in the United States or to U.S. persons absent from an exemption under applicable U.S. law. This report is not intended for distribution to, or use by, U.S. persons without such an exemption.

Bionest Partners: (a) may have managed or co-managed a public offering of the subject companies securities in the past 12 months; (b) may have received compensation for investment banking services from the subject companies in the past 12 months; and (c) expect to receive or intends to seek compensation for investment banking services from the subject companies in the next 6 months.

Disclaimer


December 2008 of 10

Selected Bionest Financial Advisory Completed Transactions

2008

Has been acquired

by

Sole Advisor

2008

Sole Advisor

Tier 1 Private Equity Fund

Commercial Due Diligence

for

2008

Has Out-licensed

Research L-Asparaginase

to

Sole Advisor

2008

Sole Advisor

Has Out-licensed

Preclinical OP-R003

to

2007

Has Sold Ginkor Fort

to

Sole Advisor

2006

Co-Advisor

Raised €15m

Listed on Alternext

2008

Oncology

-

Assessment of

Product Franchise

Sole Advisor

Selected Bionest Transaction Services Assignments

2007

Commercial Due Diligence

for

Co Advisor

2006

Sole Advisor

Has been acquired

by

2008

Has Divested

MAb Research Business

to

Sole Advisor

2008

Oncology

(Financing Round)

2008

Mature Products

(Financing Round)

Corporate

Valuation

Corporate

Valuation

value destruction. q4 2008 - bionest...

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