 Spectrum --
August 2008
 Introduction:
As the biotechnology industry continues to evolve and
mature, many biotech companies are gaining more leverage in negotiating
alliances. We analyzed recent deals and interviewed industry executives and
experts to gain insight into current alliances and licensing practices.
Multiple business and technological factors are converging to reshape the
complex biotech-pharma industry landscape.
Get the Answers You Need to Shape Your Strategy:
 Rising deal values, evolving deal structures, and increasing
competition for quality programs suggest that biotech companies are gaining
more bargaining power in negotiating alliances. What factors are influencing
current licensing strategies and practices? How are changes in the biotech and
pharmaceutical industry affecting deal structures? What deal features are most
important in retaining value for the biotech company?
Facing significant challenges, pharmaceutical companies are
incorporating more structures that are advantageous to biotech companies into
partnerships. What deal structures characterize recent high-value alliances?
How do these features affect each company’s strategic interests? Which biotech
companies are negotiating creative deal structures with Big Pharma?
Big Pharma appears to be regaining interest in collaborating
with or acquiring companies with platform technologies. Which biotech
companies have platform technologies that interest Big Pharma? What factors
make a platform technology valuable to Big Pharma? What are the drivers behind
Big Pharma’s interest in platform technology companies?
With the IPO window effectively closed, M&As provide an
appealing exit strategy. What factors influence a company’s decision to use
M&A as an exit strategy? How does the current M&A frenzy in biotech
affect industry alliances? How can biotech companies protect their value in the
event of an acquisition?
Scope:
Monetizing intellectual property and technology: Alnylam
Pharmaceuticals/Roche, Alnylam Pharmaceuticals/Takeda; high-value, nonexclusive
partnerships; RNA interference); nondilutive capital infusion; copromotion and co-commercialization; opt-ins.
Moving up the strength curve:
Targacept/GlaxoSmithKline; Center for Excellence for External Drug Discovery
(CEEDD); neuronal nicotinic receptors; risk-share alliance, "Phase II
economics."
Codevelopment and co-commercialization: Ariad
Pharmaceuticals/Merck; deforolimus; 50-50 development and commercialization;
copromotion; booking top-line revenue.
Mergers & acquisitions: Adnexus
Therapeutics/Bristol-Myers Squibb; Adnectins; biologics platform; high-value,
early-stage deal followed by acquisition; Infinity Pharmaceuticals/MedImmune
and AstraZeneca/MedImmune; impact of M&A; change-of-control; noncompete
provisions.
Academic licensing: Sublicensing provisions; sharing
milestone payments; intellectual property provisions in collaborations.
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