Dealmaking and Financing: Buying in Innovation

Table of Contents

• Executive Summary
  • Strategic Considerations
  • Stakeholder Implications
• Introduction
• Industry Pressures Continue to Mount
  • Increasing Regulatory Oversight and Delay
  • Increasing Development Costs and Productivity Problems
  • Patent Expiry and Generics Competition
  • Expected Disruption from Biogenerics
• Externalization: Accessing Innovation and Fostering Drug Discovery
  • New R&D Model
  • Using Corporate Venturing to Access Innovation
  • Innovation Incubators to Foster Drug Discovery
• Value-Building Opportunities
• Acquiring Innovation, 2000-2007
  • Product Deals
  • Recent Inlicensing Activity, 2005-2007
  • Leading Companies in Late-Stage Product Inlicensing, 2005-2007
• Big Pharma' s Inlicensed Product Deals
  • GlaxoSmithKline Inlicensed Products Across Several Disease Indications
  • AstraZeneca Accelerates Its Biologics Strategy
  • Novartis Employs Very Creative Deal Structures
  • Pfi zer Restructures and Emphasizes External Opportunities
  • Merck & Co. Looks to Small Company Acquisitions
  • Johnson & Johnson Shares Know-How with Smaller Companies
  • Schering-Plough in a Major Turnaround But Still Does Business
  • Sanofi -Aventis, a Leading Pipeline for the Future
  • Eli Lilly and Company' s Recent Acquisition and New Inlicensing Activity
• 15 Recent Trends Infl uencing Pharma' s Dealmaking Landscape

Spectrum Expert Commentaries:

• Corporate Venturing: A Cure for Pharma' s Innovation Ills?
• Capturing Additional Value in Drug Discovery and Development

Experts Featured:

Graeme R. Martin, Ph.D., president and chief executive offi cer, Takeda Research Investment, Inc. Jeff Morhet, chairman and chief executive offi cer, InNexus Biotechnology, Inc

Tables:

• 1. Patent Expiries in Major Markets of the 10 Top-Selling 2006 Blockbusters
• 2. Impending Patent Expiries for Select Biologics
• 3. Select GlaxoSmithKline Inlicensed Late-Stage Product Deals, 2007
• 4. Select AstraZeneca Inlicensed Late-Stage Product Deals, 2007
• 5. Select Novartis Inlicensed Late-Stage Product Deals, 2006-2007
• 6. Select Pfi zer Inlicensed Late-Stage Product Deals, 2005-2007
• 7. Select Merck & Co. Inlicensed Late-Stage Product Deals, 2006-2007
• 8. Select Johnson & Johnson Inlicensed Late-Stage Product Deals, 2005-2007
• 9. Select Schering-Plough Inlicensed Late-Stage Product Deals, 2006-2007
• 10. Select Sanofi -Aventis Inlicensed Late-Stage Product Deals, 2006-2007
• 11. Select Eli Lilly and Company Inlicensed Late-Stage Product Deals, 2007

Figures:

• 1. Acquiring Innovation
• 2. Trends in Original NDAs, BLAs, and NMEs Submitted to the FDA, 2002-2006
• 3. Number of Products Involved in Deals, 2000-2007
• 4. Product Dealmaking Activities Between Companies, 2000-2007
• 5. Phase of Development of 831 Inlicensed Products, 2005-2007
• 6. Categories of Inlicensed Products in Late-Stage Deals, 2005-2007
• 7. Companies That Lead in Late-Stage Product Inlicensing, 2005-2007

Expert A: Licenses and Options Executed by Start-Up, Small, and Large Companies: Exclusive vs. Nonexclusive, 2006