Market Capitalization – Big Pharma - Milken Institute
Market Capitalization – Big Pharma - Milken Institute
Market Capitalization – Big Pharma - Milken Institute
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Biopharmaceuticals: The<br />
Innovation Pipeline Race<br />
Sponsored By:
<strong>Market</strong> <strong>Capitalization</strong> <strong>–</strong> <strong>Big</strong> <strong>Pharma</strong><br />
US$, Billions<br />
Company 1990 1995 2000 2004<br />
Pfizer 14.6 42.7 293.3 221.5<br />
Johnson & Johnson 25.6 58.8 159.7 183.4<br />
GlaxoSmithKline --- --- 181.0 152.7<br />
Merck 33.9 79.8 218.9 79.6<br />
AstraZeneca --- --- 86.9 58.0<br />
Bristol-Myers Squibb 32.8 43.0 137.0 54.7
<strong>Market</strong> <strong>Capitalization</strong> <strong>–</strong> <strong>Big</strong> Biotech<br />
US$, Billions<br />
Company 1990 1995 2000 2004<br />
Amgen 2.4 15.0 64.6 81.6<br />
Genentech --- --- 42.2 56.7<br />
Biogen IDEC --- 0.3 8.8 23.2<br />
Genzyme --- 1.8 9.0 15.1<br />
Chiron 0.7 5.0 7.9 6.9<br />
Elan --- 1.2 17.0 3.7
<strong>Big</strong> <strong>Pharma</strong> vs. <strong>Big</strong> Biotech<br />
<strong>Market</strong> <strong>Capitalization</strong>, US$, Billions<br />
2005 % % 2005<br />
Company 2000 Current Change Change Current 2000 Company<br />
J&J 159.7 204.9 28% 15% 74.3 64.6 Amgen<br />
Pfizer 293.3 197.4 -33% 40% 59.2 42.2 Genentech<br />
GSK 181.0 136.9 -24% 65% 14.8 9.0 Genzyme<br />
Merck 218.9 73.2 -67% 39% 12.3 8.8 Biogen IDEC<br />
AstraZeneca 86.9 67.7 -22% -11% 7.0 7.9 Chiron<br />
BMS 137.0 49.0 -64% -91% 1.5 17.0 Elan<br />
Total <strong>Pharma</strong> 1076.8 728.9 -32% 13% 169.2 149.5 Total Biotech
<strong>Big</strong> <strong>Pharma</strong> vs. <strong>Big</strong> Biotech<br />
<strong>Market</strong> Cap Per Revenue, 2004<br />
<strong>Market</strong> Cap <strong>Market</strong> Cap/<br />
Company<br />
(US$ Billions) Revenue<br />
Pfizer (<strong>Pharma</strong>) 221 4.2<br />
GlaxoSmithKline 153 4.1<br />
Johnson & Johnson 183 3.9<br />
Merck 80 3.5<br />
Bristol-Myers Squibb 55 2.8<br />
AstraZeneca 58 2.7<br />
Sum / Average 750 3.7<br />
Genentech (Biotech) 57 12.3<br />
Biogen IDEC 23 10.5<br />
Elan 4 8.3<br />
Amgen 82 7.7<br />
Genzyme 15 6.9<br />
Chiron 7 4.0<br />
Sum / Average 187 8.6
<strong>Market</strong> Cap / Revenue<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
R&D Investment Yields Higher<br />
<strong>Market</strong> Cap<br />
GENENTECH<br />
AMGEN<br />
GENZYME<br />
GLAXOSMITH<br />
KLINE PFIZER<br />
CHIRON<br />
J&J<br />
BRISTOL-MYERS MERCK<br />
SQUIBB<br />
ASTRAZENECA<br />
BIOGEN<br />
IDEC<br />
0 20 40 60 80<br />
R&D Expenditure as % of Revenue<br />
ELAN
U.S. Biotech Industry Summary<br />
Revenues, Expenditures, & Number of Companies<br />
US$ Billions Number<br />
40<br />
Revenues - L<br />
360<br />
35<br />
R&D Expense - L<br />
No. of Public Companies - R<br />
340<br />
30<br />
25<br />
20<br />
15<br />
10<br />
5<br />
94<br />
95<br />
96<br />
97<br />
98<br />
99<br />
00<br />
01<br />
02<br />
03<br />
320<br />
300<br />
280<br />
260<br />
240
US$ Billions<br />
400<br />
300<br />
200<br />
100<br />
0<br />
94<br />
<strong>Market</strong> <strong>Capitalization</strong><br />
Biotech Industry<br />
95<br />
96<br />
97<br />
98<br />
99<br />
00<br />
01<br />
02<br />
03<br />
04
Nasdaq Biotech vs. Nasdaq Composite<br />
Index<br />
Index Jan. 1994 = 100<br />
800<br />
600<br />
400<br />
200<br />
0<br />
94<br />
95<br />
NBI<br />
Nasdaq<br />
96<br />
97<br />
98<br />
99<br />
00<br />
01<br />
02<br />
03<br />
04<br />
05
Mean Approval Time for New Drugs<br />
1994-2004<br />
Mean Approval Time (Months)<br />
20<br />
18<br />
16<br />
14<br />
12<br />
10<br />
22 28 53 39<br />
1994<br />
1995<br />
1996<br />
Total number of new<br />
drugs approved each<br />
year<br />
1997<br />
30<br />
1998<br />
35 27 24 17 21 36<br />
1999<br />
2000<br />
2001<br />
2002<br />
2003<br />
2004
Mean Approval Time for New Biologics<br />
1994-2004<br />
Mean Approval Time (Months)<br />
35<br />
30<br />
25<br />
20<br />
15<br />
10<br />
1<br />
1994<br />
2 9 10<br />
1995<br />
1996<br />
1997<br />
Total number of new<br />
biologics approved<br />
each year<br />
9<br />
1998<br />
5 6 8 9 14 2<br />
1999<br />
2000<br />
2001<br />
2002<br />
2003<br />
2004
Rising Cost of Developing a New Drug<br />
US$ Millions<br />
1000<br />
800<br />
600<br />
400<br />
200<br />
0<br />
1976<br />
1987<br />
2000
New Breast Cancer Drug Helps Women Avoid the<br />
Need for Surgery and Lowers Total Treatment Cost<br />
US$ Thousands<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
Cost of Oral Anticancer Drug<br />
Cost of Surgery
Nearly Half of All Adults in the U.S. Fail<br />
to Receive Recommended Health Care<br />
Percent of Patients NOT Receiving Recommended Care<br />
60<br />
50<br />
40<br />
30<br />
20<br />
10<br />
0<br />
Heart Attack Patients Hypertension<br />
Diabetes<br />
Colorectal Cancer Coron. Artery Dis.
US$ Billions<br />
35<br />
30<br />
25<br />
20<br />
15<br />
10<br />
5<br />
0<br />
70<br />
72<br />
R&D Expenditures<br />
By PhRMA Member Companies<br />
74<br />
Domestic<br />
Abroad<br />
76<br />
78<br />
80<br />
82<br />
84<br />
86<br />
88<br />
90<br />
92<br />
94<br />
96<br />
98<br />
00<br />
02<br />
04
Rising R&D Yields Fewer Drugs<br />
U.S. <strong>Pharma</strong>ceutical Industry<br />
Number Percent Change, Year Ago<br />
70<br />
New Drugs/Biologics Approved - L<br />
16<br />
60<br />
R&D Expenditures - R<br />
14<br />
50<br />
40<br />
30<br />
20<br />
94<br />
95<br />
96<br />
97<br />
98<br />
99<br />
00<br />
01<br />
02<br />
03<br />
04<br />
12<br />
10<br />
8<br />
6<br />
4
Industry R&D Predominately Higher<br />
than NIH Contribution<br />
US$ Billions<br />
40<br />
NIH Budget for R&D<br />
35<br />
Phrma Member Company R&D Expenditures<br />
30<br />
25<br />
20<br />
15<br />
10<br />
5<br />
94<br />
95<br />
96<br />
97<br />
98<br />
99<br />
00<br />
01<br />
02<br />
03<br />
04
VC Funding Exhibits Sluggish Growth<br />
Biotech Industry Financing<br />
Source of Funds 2002 2003<br />
1-yr<br />
Growth<br />
Public/ Other $5,636 $9,466 68%<br />
Venture Funding $3,227 $3,330 3%<br />
Follow-on offerings $925 $3,127 238%<br />
IPOs $464 $562 21%<br />
Milestones and Equity Buys $217 $443 104%<br />
Total $10,470 $16,927 62%
Biotech Deals and Amount Raised<br />
1995-2004<br />
Number US$ Billions<br />
350<br />
4.5<br />
Number of Deals - L<br />
Amount Invested - R<br />
4.0<br />
300<br />
250<br />
200<br />
150<br />
95<br />
96<br />
97<br />
98<br />
99<br />
00<br />
01<br />
02<br />
03<br />
04<br />
3.5<br />
3.0<br />
2.5<br />
2.0<br />
1.5<br />
1.0<br />
0.5
Merger Trends in the Biotech Industry<br />
(Announced Value and Number of Transactions)<br />
US$ Billions Number<br />
25<br />
30<br />
Total Amount (L)<br />
Number of Deals (R)<br />
20<br />
24<br />
15<br />
10<br />
5<br />
0<br />
1H99<br />
2H99<br />
1H100<br />
2H100<br />
1H101<br />
2H101<br />
1H102<br />
2H102<br />
1H103<br />
18<br />
12<br />
6<br />
0
Total Alliance Numbers and Deal Value<br />
Top 20 <strong>Pharma</strong> by Sales<br />
Number US$, Billions<br />
260<br />
8.0<br />
250<br />
240<br />
230<br />
220<br />
210<br />
200<br />
190<br />
1999<br />
2000<br />
2001<br />
Number of Alliances - L<br />
Total Deal Value - R<br />
2002<br />
2003<br />
7.0<br />
6.0<br />
5.0<br />
4.0<br />
3.0
Biotech Capable of Supporting Its Own Weight<br />
Deals, Mergers, and Acquisitions in Biotech Industry<br />
Number of Deals<br />
1000<br />
<strong>Pharma</strong> - Biotech<br />
Biotech - Biotech<br />
800<br />
600<br />
400<br />
200<br />
0<br />
1992<br />
1993<br />
1994<br />
1995<br />
1996<br />
1997<br />
1998<br />
1999<br />
2000<br />
2001
Alliance Deal Activity<br />
Top Transactions, 2003<br />
Partner Partner<br />
Est. Value<br />
(US$, Mill.)<br />
Amgen Biovitrum $511<br />
Aventis SA Regeneron <strong>Pharma</strong>. $510<br />
Galen Pfizer $484<br />
Johnson & Johnson Millennium <strong>Pharma</strong>. $470<br />
GSK Theravance $395<br />
Pfizer Akzo Nobel NV $370<br />
Novartis Regeneron <strong>Pharma</strong>. $350<br />
Merck Actelion $272<br />
Novartis Idenix <strong>Pharma</strong>. $250<br />
BMS Corgentech $250<br />
Genentech Curis $240
Selected M&A Deals<br />
2003<br />
Acquirer Acquired<br />
Est. Value<br />
(US$, Mill.)<br />
General Electric Amersham $9,500<br />
IDEC <strong>Pharma</strong>. Biogen $6,840<br />
Teva <strong>Pharma</strong>. Sicor $3,400<br />
Johnson & Johnson Scios $2,400<br />
DSM Roche Vitamins & Fine Chem. $1,840<br />
Roche Igen Int'l $1,400<br />
Pfizer Esperion Therapeutics $1,300<br />
Roche Disetronic $1,200<br />
CSL Aventis Behring $925<br />
Chiron Powder Ject <strong>Pharma</strong>. $879<br />
Genzyme General SangStat Medical $596
US$ Billions<br />
400<br />
300<br />
200<br />
100<br />
0<br />
1994<br />
1995<br />
U.S. Biotech IPOs<br />
1994-2003<br />
1996<br />
1997<br />
1998<br />
1999<br />
2000<br />
2001<br />
2002<br />
2003
Total Drug Development Time From<br />
Synthesis to Approval<br />
Development Time (Years)<br />
16<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
1960s<br />
1970s<br />
Clinical Phase<br />
Preclinical Phase<br />
1980s<br />
Approval Phase<br />
1990s
Up to<br />
6.5 years<br />
Up to<br />
6 years<br />
Up to<br />
4 years<br />
Total Drug Development Time<br />
From Laboratory to Patient<br />
Function US$, Billions Share<br />
Prehuman /Preclinical $11.0 31.9%<br />
Phase I $2.3 6.8%<br />
Phase ll $3.8 11.1%<br />
Phase Ill $8.0 23.3%<br />
Approval $4.1 12.0%<br />
Phase IV $3.7 10.7%<br />
Uncategorized $1.4 4.2%<br />
Total R&D $34.5 100%
Years<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
Total Development Time<br />
Drug and Biological Products<br />
1985-1989<br />
1990-1994<br />
1995-1999<br />
Biologicals<br />
Drugs<br />
2000-2004
Biotech Products have Better U.S. Approval<br />
Success Rates Compared to New Chemical Entities<br />
Percent<br />
60<br />
50<br />
40<br />
30<br />
20<br />
10<br />
0<br />
rDNA<br />
Endocrine<br />
Immunological<br />
Antineoplastic<br />
New Chemical Entities
Reasons for Terminating Unpromising<br />
New Drugs and Time to Terminate<br />
Percent Years<br />
40<br />
4.0<br />
30<br />
20<br />
10<br />
0<br />
Safety<br />
Efficacy<br />
Reason for Termination - L<br />
Time to Termination - R<br />
Economics<br />
3.5<br />
3.0<br />
2.5<br />
2.0
Clinical and Total Cost Reductions from<br />
a One-Year Reduction in Phase Time<br />
Percent<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
Preclinical<br />
Clinical<br />
Total<br />
Phase l<br />
Phase ll<br />
Phase lll<br />
NDA
Capitalized Clinical and Total Cost Reductions<br />
from Simultaneous Reductions in all Phase Times<br />
Cost Reduction<br />
30%<br />
25%<br />
20%<br />
15%<br />
10%<br />
5%<br />
0%<br />
0%<br />
5%<br />
Total Cost<br />
Clinical Cost<br />
10%<br />
15%<br />
20%<br />
25%<br />
30%<br />
35%<br />
Phase Time Reduction<br />
40%<br />
45%<br />
50%
Years<br />
20<br />
15<br />
10<br />
5<br />
0<br />
Average Effective Patent Life<br />
Rx Drugs vs. Other Products<br />
11-12<br />
Rx Drugs*<br />
18.5<br />
Products Other Than Rx Drugs<br />
*Includes Hatch-Waxman Partial Patent Restoration
Biotech Patents Granted in U.S.<br />
1989-2002<br />
Thousands<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
89<br />
90<br />
U.S. Origin<br />
Foreign Origin<br />
91<br />
92<br />
93<br />
94<br />
95<br />
96<br />
97<br />
98<br />
99<br />
00<br />
01<br />
02
Generics’ Share of U.S Prescription Drugs<br />
1984-2005*<br />
Percent<br />
60<br />
50<br />
40<br />
30<br />
20<br />
10<br />
* Includes Forecast thru 2005<br />
85<br />
87<br />
89<br />
91<br />
93<br />
95<br />
97<br />
99<br />
01<br />
03<br />
05
Biotechnology Medicines in Development<br />
By Therapeutic Category<br />
Category Number<br />
Cancer 154<br />
Infectious Diseases 43<br />
Autoimmune Disorders 26<br />
Cardiovascular Disease 19<br />
AIDS/HIV Infection 17<br />
Neurologic Disorders 16<br />
Respiratory Disorders 14<br />
Digestive Disorders 11<br />
Diabetes 10
Medicines in Development<br />
For Heart Disease and Stroke<br />
Category Number<br />
Atherosclerosis 19<br />
Stroke 17<br />
Cong. Heart Failure 16<br />
Acute Coronary Syndromes 14<br />
Arrhythmia 13<br />
Adjunctive Therapies 12<br />
Peripheral Vascular Disease 12<br />
Hypertension 10<br />
Deep Vein Thrombosis 9<br />
Lipid Disorders 9<br />
Heart Attack 8
Medicines in Development<br />
For HIV/AIDS<br />
Category Number<br />
Antivirals 34<br />
Vaccines 16<br />
Immunomodulators 8<br />
Others 8<br />
Anti-Infectives 6<br />
Anticancers 5<br />
Antifungals 3<br />
Gene Therapy 2
Medicines in Development<br />
For Cancer<br />
Cancer<br />
Category Number<br />
Solid Tumors 94<br />
Lung 70<br />
Breast 49<br />
Colon 48<br />
Skin 45<br />
Prostate 44<br />
Leukemia 40<br />
Lymphoma 39<br />
Cancer-related 34<br />
Ovarian 31
Drug<br />
Target<br />
Discovery<br />
Research<br />
Ph.D.<br />
MD<br />
Lead<br />
High<br />
Throughput<br />
and Design<br />
The Translational Continuum:<br />
From Discovery to Delivery<br />
Lead<br />
Optimization<br />
Medicinal<br />
Chemistry<br />
Chemist<br />
Translational Ph.D.<br />
Physician-Scientist<br />
Target<br />
Validation<br />
The Enablers<br />
Models:<br />
Mice<br />
Primates<br />
Lead<br />
The Human Capital<br />
Physician<br />
Scientist<br />
GMP<br />
Lead<br />
Optimization<br />
Clinical<br />
Trials<br />
Clinical<br />
Delivery<br />
Manufacturing Patients G l o b a l<br />
H e a l t h<br />
Industry<br />
Clinical<br />
Investigator<br />
Clinicians
Roadblocks in Early Stage<br />
Translational Research<br />
Translational Funding Gap<br />
“Valley of Death”<br />
Post-NIH to<br />
Pre-Commercial<br />
Funding<br />
Discovery Development
Discovery:<br />
Target<br />
Identification<br />
Roadblocks in Early Stage<br />
Translational Research<br />
Academia to Private<br />
Company<br />
Technology transfer<br />
Intellectual property<br />
Conflict of interest<br />
Partnerships<br />
with the<br />
Private Sector
Product<br />
Roadblocks in Mid- Stage<br />
Translational Research<br />
Experimental Medicine<br />
Biomarkers<br />
Advanced Imaging<br />
Technologies<br />
Animal and Human<br />
Models<br />
Proof<br />
Of<br />
Concept
The Changing Healthcare Industry<br />
Willingness to Pay<br />
Low High<br />
“Me too”<br />
Paradise<br />
Doomsday<br />
Low<br />
Ability to Innovate<br />
Golden<br />
High<br />
Age<br />
Reality<br />
PSBF
<strong>Market</strong> <strong>Capitalization</strong><br />
Investing in Biotechnology<br />
Preclinical<br />
Phase I<br />
Phase II<br />
Time<br />
Phase III<br />
NDA<br />
Risk<br />
Profile<br />
Approval &<br />
Launch<br />
PSBF
Year 2000 Private Financings<br />
454 Corp BioStratum DNA Research Instruments HepaVec Molecular Staging Phytera<br />
4SC GmbH Bradford Particle Design plc DoubleTwist Inc. HTS Biosystems Morphochem Phytomedics<br />
7TM <strong>Pharma</strong> A/S Cambridge Drug Discovery Dov <strong>Pharma</strong>ceutical Hybrigenics Morphotek Point Biomedical<br />
Acadia <strong>Pharma</strong>ceuticals<br />
256<br />
Cambridge Genetics Dynavax Technologies Corp. Hypnion NeoGene Technologies Praxis <strong>Pharma</strong>ceuticals<br />
Achillion <strong>Pharma</strong>ceuticals CanBas Co. eBioinformatics Icon Genetics NeoGenesis Proteome<br />
Acorda Therapeutics Caprion <strong>Pharma</strong>ceuticals Inc. Ecopia BioSciences IDEA Nereus <strong>Pharma</strong>ceuticals Proteome Systems<br />
Active Pass <strong>Pharma</strong>ceuticals Cardion AG EiRx Therapeutics Illumina NetGenics Inc. Protiva Biotherapeutics<br />
Admetric BioChem Inc. CellFactors Eliance Biotechnology Immunicon NeuColl PTC Therapeutics<br />
Adolor Corp. Cellomics Inc. Elitra <strong>Pharma</strong>ceuticals Corp. Immuno-Designed Molecules NeuralStem BiopharmaceuticalsQbiogene Inc.<br />
AdProTech Ltd. Centaur <strong>Pharma</strong>ceuticals EmerGen INC Research Neurogenetics Quantum Biotechnologies<br />
Aegis Analytical Corp. Cepheid Inc. Enanta InfiMedTherapeutics Neurome Quantum Dot Corp.<br />
AeroGen Ciphergen Biosystems Entelos Ingenium <strong>Pharma</strong>ceuticals AG NeuroMed Quorex<strong>Pharma</strong>ceuticals<br />
AgraQuest Circe Biomedical Inc. EntoMed Inhibitex Neuron Therapeutics Rademacher Group<br />
AlphaGene Cogent <strong>Pharma</strong>ceuticals Eos Biotechnology Inc. Integrative Proteomics NeuroNova Raven Biotechnologies Inc.<br />
AlphaVax Coley <strong>Pharma</strong>ceutical Group EpiCept Corp. Intercell Biomedical R&D Neurotrophic Bioscience Renovo<br />
Amplistar Combimatrix Corp. Epigenomics InterMune<strong>Pharma</strong>ceuticals NewBiotics Repair<br />
Anadys<strong>Pharma</strong>ceuticals Combio A/S Esperion Therapeutics Intertrials.com Northwest Biotherapies Replicor<br />
Arakis Compugen Eurogene Iomai Corp. Novazyme <strong>Pharma</strong>ceuticals Inc. Revotar Biopharmaceuticals<br />
Ardana Bioscience ConjuChem Exact Laboratoies Ischemia Technologies Novelos RiboTargets<br />
Arpida Control Delivery Systems Exiqon Islet Technology Noxxon <strong>Pharma</strong> Scynexis Chemistry & Automation<br />
Arradial Copharos ExonHit Therapeutics Keryx Biopharmaceuticals Octagen Seattle Genetics Inc.<br />
Arrow Therapeutics Cosmix Molecular BiologicalsEyeTech<strong>Pharma</strong>ceuticals Kinetek<strong>Pharma</strong>ceuticals Omega Tech SemBioSys Genetics<br />
Artecel Sciences CropDesign Fast Track LeadScope Ontogen Senomyx<br />
Artemis Curacyte FeRx Locus Discovery Inc. Onyvax Sensium Technologies<br />
Atairgin Technologies Cureon FibroGen Inc. Lorantis OralScan Laboratories Signase<br />
Athersys CyDex Framingham Genomic MedicineLumiCyte Orchid Biosciences Signature Biosciences Inc.<br />
Atrium Biotechnologies Cythera Galileo Laboratories Inc. Maxia <strong>Pharma</strong>ceuticals OriGenix Technologies Solexa<br />
Atugen AG Cytokinetics Inc. Genaissance <strong>Pharma</strong>ceuticals MDS Proteomics Oxagen Sophion Bioscience<br />
Avidex Cytos Biotechnology Gendaq MediciNova Oxxon <strong>Pharma</strong>ccines Spherics<br />
AviGenics Cytovax Biotechnology GeneFormatics Inc. MelTec Panacos<strong>Pharma</strong>ceuticals StemCo Biomedical<br />
Axovan Cytran GeneScape Mermaid <strong>Pharma</strong>ceuticals PanGene Structural GenomiX Inc.<br />
Axxime <strong>Pharma</strong>ceuticals AG De Novo <strong>Pharma</strong>ceuticals GeneTrolBiotherapeutics Metabasis Therapeutics Inc. PanTherix Sunesis <strong>Pharma</strong>ceuticals Inc.<br />
<strong>Big</strong> Bear Bio Inc. Delsys<strong>Pharma</strong>ceutical Corp. Geneva Proteomics Metabolex Paratek<strong>Pharma</strong>ceuticals Supratek<strong>Pharma</strong><br />
Bio Alliance <strong>Pharma</strong> Deltagen GeneWorks MetaPhore<strong>Pharma</strong>ceuticals Periodontix Syrrx Inc.<br />
Biofrontera <strong>Pharma</strong>ceuticals Devgen Genmab MethylGene Personal Chemistry Targacept Inc.<br />
BioInvent International AB diaDexus Inc. Genomatrix Software Metrika <strong>Pharma</strong>digm Targasome<br />
Biolex Inc. Diatos Genomica MetrisTherapeutics <strong>Pharma</strong>Mar S.A. Third Wave Technologies<br />
BioMedicines Inc. Digital Gene Technologies Genomics Collaborative Inc. Microbia PHT Clinical Networks Tibotec<br />
BioMicro Systems Direct Therapeutics Genteric Micromet PhylosInc. TransMolecular<br />
BioNumerik <strong>Pharma</strong>ceuticals Inc.Direvo Biotech Helicon Therapeutics Micronics Physiome Sciences Inc. TransTech <strong>Pharma</strong><br />
PSBF
Year 2001 Private Financings<br />
180<br />
Ovation <strong>Pharma</strong>ceuticals Apalexo Bioheart Gryphon Therapeutics ProCorde<br />
Salmedix Algorx <strong>Pharma</strong>ceuticals CAPNIA Xanthus Life Sciences Synaptica<br />
Senomyx Ardana Bioscience Medicarb Con<strong>Pharma</strong> Xcyte Therapies<br />
Syrrx Unibioscreen Scion <strong>Pharma</strong>ceuticals Gendel Xenogen<br />
GAG Bioscience Can-Fite Bio<strong>Pharma</strong> Insulet Bio-OriGyn Amnis<br />
ImaRx Therapeutics Advancis <strong>Pharma</strong>ceutical Asterand Altus Biologics Calyx Therapeutics<br />
CombinatoRx Avantium Technologies Kucera <strong>Pharma</strong>ceutical Nanosys ChemCodes<br />
Bioheart Novocell Blue Heron Biotechnology Medicarb Nucleonics<br />
Genesto Renovis Novacea NephRx Achillion <strong>Pharma</strong>ceuticals<br />
Intercytex Astex Technology Biovitrum Auxilium A2 Warren <strong>Pharma</strong>ceuticals<br />
Medicarb Centagenetix Biovitrum ARYx Therapeutics Peakdale<br />
Pieris Proteolab Strakan Group AM-<strong>Pharma</strong> Trellis Bioscience ExonHit Therapeutics<br />
Contral <strong>Pharma</strong> Archemix KuDOS <strong>Pharma</strong>ceuticals Ablynx Infigen<br />
Quorex <strong>Pharma</strong>ceuticals Plexxikon MicroCHIPS Inc. Agrenvec Target Protein Technologies<br />
CMC Biotech Cambridge Biotechnology Addex <strong>Pharma</strong>ceuticals ParAllele Genomics Astex Technology<br />
ForHealth Technologies Cellpep DOV <strong>Pharma</strong>ceutical Biovitrum Azyx Geopharma Info. Srvcs.<br />
Pantheco Beyond Genomics Concurrent <strong>Pharma</strong>ceuticals DermaCo BioVisioN<br />
Xerion <strong>Pharma</strong>ceuticals Oculex <strong>Pharma</strong>ceuticals Rib-X <strong>Pharma</strong>ceuticals SmartBead Gyros<br />
Modus Biological Membranes Neuron Therapeutics m-phasys Axordia MAP Medical Technologies<br />
Salus Therapeutics Affina Immuntechnik EyeTech <strong>Pharma</strong>ceuticals Jerini Medicarb<br />
AGY Therapeutics Gryphon Therapeutics Azyx Geopharma Information Services PHASE-1 Molecular Toxicology Medinox<br />
Guava Technologies Ablynx Atairgin Technologies Advanced BioNutrition OctoPlus International<br />
Theraptosis Acusphere Biopsytec Advancis <strong>Pharma</strong>ceutical OctoPlus International<br />
BioMimetic <strong>Pharma</strong>ceuticals Medlyte Matrix MicroScience Senomyx Personal Chemistry<br />
Glycominds Serenex Mimeon AgeLab <strong>Pharma</strong> Protometrix<br />
PSBF
$ (Millions)<br />
250<br />
200<br />
150<br />
100<br />
50<br />
0<br />
IPO’s are No Longer Exits<br />
2.3x<br />
4.0x<br />
2.0x<br />
1995 - 1996 1999 - 2000 2003 - 2004<br />
Private $ Raised<br />
Pre $ IPO Valuation<br />
PSBF
$<br />
What has Changed Since 2000<br />
Biotech Public<br />
<strong>Market</strong> Value,<br />
12/31/2000<br />
$163B<br />
Money Raised in<br />
Public <strong>Market</strong>s,<br />
2000 - 2004<br />
$61B<br />
Biotech Public<br />
<strong>Market</strong> Value,<br />
9/30/2004<br />
$101B<br />
PSBF
Health Insurance<br />
<strong>Pharma</strong>ceutical<br />
Industry Perceptions<br />
Energy<br />
Fast Food<br />
Biotechnology<br />
Information<br />
Technology<br />
Computer<br />
Software<br />
8%<br />
8%<br />
10%<br />
32%<br />
39%<br />
43%<br />
43%<br />
46%<br />
44%<br />
48%<br />
53%<br />
54%<br />
62%<br />
0% 10% 20% 30% 40% 50% 60% 70% 80%<br />
70%<br />
Favorable<br />
Unfavorable<br />
PSBF
Science<br />
Then Now<br />
Science all-important Business model crucial<br />
Technology started from Spin-outs from big pharma<br />
academic institutions Specialty biopharma<br />
Sole focus on serious More lifestyle related drugs<br />
conditions in development<br />
Novel, groundbreaking science Reformulation of known<br />
drugs<br />
PSBF
Funding<br />
Then Now<br />
Linear funding <strong>–</strong> Series A, Larger deals<br />
Series B, Series C Tranching<br />
Fund to next milestone Fund to profitability<br />
<strong>Big</strong> pharma validates Biotech company keeps<br />
technology by license more of the upside<br />
PSBF
Exits<br />
Then Now<br />
Exit via IPO Acquisition by other biotech<br />
or large pharma<br />
Reduce risk while Reduce risk<br />
maintaining “home run”<br />
potential<br />
5 <strong>–</strong> 10 year holding periods 3 <strong>–</strong> 5 year holding periods<br />
PSBF
<strong>Market</strong> Cap ($ M)<br />
The U.S. <strong>–</strong> E.U. Biotech Gap<br />
4500<br />
4000<br />
3500<br />
3000<br />
2500<br />
2000<br />
1500<br />
1000<br />
500<br />
0<br />
6.2x<br />
6.9x<br />
8.4x<br />
10th Largest 25th Largest 50th Largest<br />
US Public Biotech Company<br />
EU Public Biotech Company<br />
PSBF
New Paradigms<br />
2000 2010<br />
High severity disease 34% 56%<br />
Low severity disease 62% 42%<br />
PSBF
Large <strong>Pharma</strong> Pipeline<br />
• 1980’s <strong>–</strong> 20% of pipeline in-licensed<br />
• 2000 <strong>–</strong> 40% of pipeline in-licensed<br />
PSBF
Amgen IPO Prospectus<br />
Alpha Interferon<br />
Hepatitis B Vaccine<br />
Erythropoietin (EPO)<br />
EGF<br />
Product<br />
Gamma Interferon<br />
Anti-Viral<br />
Anti-Viral<br />
Hep B Prevention<br />
Anemia<br />
Indication<br />
Wound Healing and<br />
Gastric Ulcers<br />
PSBF
Worldwide Life Expectancy Growth<br />
26<br />
Years<br />
+5<br />
31<br />
Years<br />
+35<br />
+18<br />
49<br />
Years<br />
+17<br />
66<br />
Years<br />
1820 1900 1950 2004<br />
United Nations Development Program
Between 1900 and 2000,<br />
life expectancy in the U.S.<br />
increased 54%, from<br />
Sources: Centers for Disease Control<br />
50 to 77 years.
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