Sourcing and Marketing Technology

PATRICIA SINATRASenior Vice President of Business Development

Serina Therapeutics

Philadelphia, PA 2015

Copyright © 2015 Patricia Sinatra

Agenda

• The Perpetual Licensing Student• Sourcing or “Buy-Side” Licensing • Marketing or “Sell-Side” Licensing• Market Research

• Rationale, Methods and Types• Use of Non Confidential and Confidential Presentations• Handling “Returns”

Agenda

• The Perpetual Licensing Student• Sourcing or “Buy-Side” Licensing • Marketing or “Sell-Side” Licensing• Market Research

• Rationale, Methods and Types• Use of Non Confidential and Confidential Presentations• Handling “Returns”

The Perpetual Licensing Student

• Healthcare is a highly regulated and rapidly evolving sector– Business models are morphing– Technologies are improving– Downward pricing pressure from government and insurance

companies is accelerating yet newer technologies are increasingly more expensive

• Unprecedented deal flow, financing, M&A a complete reversal from several years ago

• Collaborative relationships continue to be a source of expanding portfolio value while reducing R&D costs

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Secondary and Archival Data

ADVANTAGES: • Paints the big picture of a particular market area

of interest; trends; incidence and prevalence figures etc. market dynamics, deal flow per category

• Should be used before primary qualitative and quantitative measurements are done, especially if you are unfamiliar or new to the area of interest

POTENTIAL DOWNSIDES:• Some info is obsolete at print• Don’t fully know what you are buying• Not necessarily good for drilling down• Info may be redacted or incomplete due to

confidentiality or it is a non-material event

• PHRMA.gov • Current Partnering• Kalorama• Decision Resources• Marketsandmarkets.com• BMI Research• Marketresearch.com• Scientific journals• Government statistical

sites• Non Government

Organizations (NGOs) and not for profits

• Redbook (pricing)• SEC

• General Overviews•Historical Deal Trends

•Therapeutic, Diagnostic, Device Market Overviews

•Disease statistics, prevalence, incidence, etc.•Product differentiation, Positioning

assessment•Competitive analysis

•Pricing•Deal Analysis

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Secondary and Archival Data

• General Industry Trends• Healthcare Policy• Industry analysis

• Reviews and commentary• Recent deal analysis/interviews

• M&A, Financing Activity• Clinical trials

• Personnel changes•Sector related discussion

• Market analysis

In Vivo, Start UP BioWorld and BioCentury DIA newsletter Pink Sheet New York Times Wall Street Journal Medical Marketing and Media PHRMA.org Scientific and medical journals Redbook

Yahoo Business Pharmaceuticals, Biotechnology,

Diagnostics, Manufacturing Fierce Publications

Biotech, Pharma, HealthPayer, Vaccines

BIO Smart Brief Stock indices (NASDAQ, NYSE) SEC/Edgar Annual Reports Analyst Reports (may have to pay) ClinTrials.gov FDA MedDRA Orange Book (generic/patents)

TRADE PUBLICATIONSNEWSPAPERS

REPORTS

SUBSCRIPTION

FREE

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Secondary and Archival Data

•Comps (deal structures/amounts where material)•Technology assessment

•Financial statements•Venture capital investments (seed rounds,

management/mgmt. changes)•Competitive analysis

•Market Research•Patents•Pricing

ADIS R&D Windhover (Elsevier)

Strategic Transactions Current Partnering ThomsonReuters

RECAP Thomson Pharma

S&P CAPIQ Venture Source (DOW

JONES) MedTrack Global Data Hoovers Redbook (drug pricing) USPTO.gov Orangebook CollectiveIP

DATABASES

SOURCE: RECAP

SOURCE: ADIS R&D

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Industry Meetings

PARTNERINGINVESTOR

MEDICAL/SCIENTIFIC• American Society of Clinical Oncology

• American College of Cardiology• American Psychiatric Association, etc.

Technology Specific (Antibody engineering,

Drug Delivery, etc.)

BIO CEO and Investor Conference JP Morgan

Leerink SwanCredit Suisse

Etc.

BIO International MeetingBIO Europe (EBD)

BIOJapanLicensing Executive Society

Major Medical Meetings

http://www.vstratadvisors.com/#!resources

• In/Out Licensing/Partnering• Networking

• Competitive Intelligence• Fund raising

• M&A

http://www.macb.io/cal/

Download a Comprehensive List of Major Meetings for

2015:

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Buy Or Sell Side Considerations

• Are internal projects aligned with the company’s strategic objectives?– Business model? Technology platform or product focus? Both?

Opportunistic or specific therapeutic or other area? – Is licensing a path to M&A?

• Is the portfolio balanced?– Balance mitigates risk– Are there competing projects?– Timelines for development

• What is the value proposition?– Customer, market and reimbursement assessments?

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Agenda

• The Perpetual Licensing Student• Sourcing or “Buy-Side” Licensing • Marketing or “Sell-Side” Licensing• Market Research

• Rationale, Methods and Types• Use of Non Confidential and Confidential Presentations• Handling “Returns”

What Drives Pharma Deals?• Strategic fit

– Internal resources and alignment with R&D

– Financial considerations• Market Size• Product Differentiation

– Best in class v First in Class• Novelty• MOA defined• Strong IP estate• Accompanying diagnostic • A clear clinical and regulatory path• Payer reimbursement

Source: Primary market research, partnering portals, personal communication 11

Buy Side Licensing

• Many companies want a piece of the action– Highly competitive– Need to search aggressively and globally– Need a team approach to find targets and products with an

incentive for success• Regional organizations of excellence; regional licensing

teams• With competitive technologies, due diligence and deal

economics need to be expedient and creative.• Smaller biotech companies are challenged regarding in-

licensing for high optic/market products

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Sourcing TechnologyMETHOD WHO, WHAT, WHERE COMMENTS

Partnering Meetings, Investor Conferences

BIO, LES, EBD, others – U.S.,international and BRIC markets

Good for initial visibility and networking; partnering introductions/negotiations and education.

Leverage scientific, management, board and investor contacts

VPs R&D, CMOs, Board members; VCs, investors, bankers- through personal networking and some CEO/R&D/Scientificmeetings.

Drugs sitting on the shelf at pharma; divestures; various levels of collaborations and M&A

Medical and Scientific Meetings

ASCO, ASH, NCI-EORTC, DDW, as well as technical meetings.

C.I. and scouting/sourcing; some BD activity occurs “off the scene.”

Secondary sources Patent databases, ADIS R&D, scientific literature

Costly; may be out of date but a good guide to get started to understand landscape and products that have also been discontinued.

Foundations, NGOs, not for profit organizations

LLS, Michael J. Fox, PATH, JDRF Provide grants and access to technologies. Mission focused.

Academic/Tech Transfer/NCI,NIH

Ok for early stage, higher risk projects Direct contact with University or Gov/NFP; AUTM, NIH, Gordon Conferences, FASEB, Collective IP

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How Big Pharma May Evaluate Your Asset

• Context of the deal: – Micro basis (deal parties)– Macro basis (deal landscape)

• Value added strategies employed:– Creating competition for the deal – Forming alternatives

• Value of the deal: – Value to strategic partners – Value to external parties (i.e.,

investors) – Positioning deal parties for success

ANALYTIC APPROACH DEAL COMPONENTS

Source: Allicense 2015/Locust Walk Partners 14

Due Diligence For Factor IX Gene Therapy Product

Source: Thomson-Reuters, Allicense 2015 15

Due Diligence

Source: Thomson-Reuters, Allicense 2015 16

Deal Comp Analysis

Source: Thomson-Reuters, Allicense 201517

Agenda

• The Perpetual Licensing Student• Sourcing or “Buy-Side” Licensing • Marketing or “Sell-Side” Licensing• Market Research

• Rationale, Methods and Types• Use of Non Confidential and Confidential Presentations• Handling “Returns”

Sell-Side Licensing Considerations• Why should they do a deal with you? • What is your company’s strategy?

– Short versus long term timelines– Validation of technology– Economic risk sharing– M&A

• Partner identification and strategic and cultural fit– Learn as much as you can about the buyer– Tiered approaches

• One size does not fit all tailor your approach• Who is your “customer?” Understand the other party: culture, interests,

concerns• Stakeholders (champions and decision makers), time-table

• Preferred deal structure – Be certain on key provisions, Field, Territory – Have an understanding of what your technology is worth

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Sell-Side Considerations

• What rights, if any, does the licensor have to get the product back?

• Will the deal be split along technology, indication or geographic lines?

• Any restrictions on sublicensing (more an issue with university licenses)

• What rights in the licensor’s data, materials, clinical samples, regulatory authorizations, etc. will be retained and or shared?– Be careful not to block your own technology

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Technical Attributes Don’t Sell1. Our library contains 1011 distinct binding entities…

2. That means we can identify binders to any human protein…

3. So even complex protein targets can be successfully addressed with our technology…

“So if you license our libraries, your drug discovery program will be quicker, more cost-effective and more likely to succeed.”

SO WHAT?

SO WHAT?

SO WHAT?

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Other Examples

Translate scientific “features” into benefits

Compact globular protein format Ideal structure for circulation in blood for therapeutic applications may improve clinical outcomes

Stability at various temperatures for X months

Easier preparation, less waste

Reduced viscosity of formulation Ease of administration, drug andtissue distribution

Efficient two step synthesis Potential cost of goods advantages

Adaptable modular structure Technology can be custom designed offering commercial flexibility

FEATURE BENEFIT

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YOUR ASSET

What Problem Are You Trying To 

Solve?

How Does Your Technology Provide a Solution?

Differentiable Characteristics

Milestones and What You Are 

Trying to Achieve

Market Size and Customer 

Who Are You?  

Creating A Compelling Licensing Story

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What Problem Is Your Technology Trying To Solve?

• What is the market need?• Why does this problem exist?• Why has no one solved this before?• What barriers exist?

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How Does Your Technology Provide a Solution?

• How are you solving the stated problem?

• What is unique about your technology versus your competition?

• How does the technology work?– State the take away message of

the data as the title– Use visuals/charts to summarize

the data

• How do you show your technology is an improvement over anything else? How will you position it?

– Is your IP defensible?– How will it be used?– Is it first in class?– Demonstrable efficacy versus other

standards of care?– Enables speed of development/

speed to market?– Easier to give/reduced dosing

frequency?– Economic advantages?

What Are The Differential Characteristics of Your Technology?

What’s Your Solution and How is It Different?

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Customer Base?

• Who/what is the customer base? What will influence them to adopt?

• How big is the market? Room for expanded indications? Can you realistically quantify it?

• Have you done a bottoms up forecast? What/who are your sources?

• What have you achieved to date?• What do you want to do next?• What are you looking for in a

partner? (Not necessary to go into detail about terms.)

• Why do you want to partner with them?

Who Are You?• List team members – keep it brief• Highlight successful financing or key

successes• Think about how a licensing

relationship will fill talent gaps

What Milestones Have You Achieved and What Is Your Plan?

Customer Base, Strategy and Leadership

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Agenda

• The Perpetual Licensing Student• Sourcing or “Buy-Side” Licensing • Marketing or “Sell-Side” Licensing• Market Research

• Rationale, Methods and Types• Use of Non Confidential and Confidential Presentations• Handling “Returns”

Market Research: Should You Do It?

• Customer centric• Provides and a measure of validity and

credibility to your story.• Understand the competitive market • Provides direction for a clinical and

regulatory path • Validates differentiable attributes and

enables you to position you technology with greater strength.

• Provide inputs to develop your forecast and valuation analysis (bottoms - up method.)

• Helps the partner better understand the potential for how the product will be used and reimbursed.

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Market and TPP

Customer 1 PHYSICIANS

Customer 2:LICENSOR 

Customer 3: PATIENTS

Customer 4 PAYERS

Target Product Profile (TPP)

• Indication(s)• Route(s) of administration

– Dosage form(s)– Storage

• Outcomes or endpoints to be achieved• Short and long term side effects and toxicities• Comparative data

– More effective than…– Safer than…

• Life cycle planning considerations

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Typical Market Research Methods

To be effective, an organization should use all as much market information as possible

1. Secondary Market Research: Archival or print/database sources (mentioned earlier)

2. Primary Market Research:– Qualitative– Quantitative

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Qualitative Measurement

“Qualitative research is most useful in the initial phases of product development to

explore potential customers’ unmet needs, understand motivations and opinions

behind purchase or usage behavior, and formulate hypothesis about product

features and benefits.”

• Usually done before QUANT• One-on-One Personal Interviews

(generally earlier stage)• Focus groups (generally later stage)

– Used in almost every industry– Good for products in clinical phase– Creates dialogue among users and

may raise differential opinions and points of misunderstanding

– Generate list of customer needs within the category of question

– Tests messaging and positioning concepts

– Lays the ground work for additional or confirmatory quantitative research

– Generally in groups of smaller sample sizing: 5 – 10

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Quantitative Measurement

• Mail (“check/other”) or online surveys

• Conjoint

“Used to test hypotheses and confirm findings from qualitative research with samples that are representative and large enough to provide a more solid ground for investment decisions regarding the technology in question.”

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Conjoint or Trade Off Analysis

• Another type of quant model

• Statistical analysis• Assess trade-offs—

quality vs. cost, time to market vs. breadth of features, richness of the offering vs. ease of use, etc.

1. For which value-added features is the market willing to pay?

2. Based on efficacy of the drug, at which price point does your desire to use the product diminish?

3. How should we price our new product to maximize adoption?

4. What features should we include in our next release to take market share from our competition?

5. If we expand our product line, will overall revenue grow, or will we suffer too much cannibalization?

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How You Probe Is Important

Bad: “Do You Agree that the Massachusetts Healthcare Foundation Provides Good Care?”(Yes/No answer – but not defined)

Better: “In your experience, does MHF provide excellent, average or poor care?

Probe: Please elaborate regarding why you feel care was (excellent/average/poor)?

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Can You Afford To Do MR?

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Budgeting

The stage, type of technology

and your budget will drive the

type and size of market

research.

SecondaryQualitative

(One on OneInterviews)

Qualitative(Focus Groups)

Quantitative(Confirmatory

surveys)

QuantitativeConjoint

(Trade-Off)

Discovery ●●● ●●

Preclinical ●●● ●●● ●●

Phase I ●●● ●●● ● ●●●

Phase II ●●● ●● ●● ●●● ●●

Phase III ●●● ●● ●●● ●●● ●●●

Launch ●●● ●●● ●●● ●●●

Life cycle ●●● ●●● ●●● ●●●

COST $500 ‐$25,000

$1.5K per interview + 

OOPs$150/interviewee

$500 ‐ $750 per survey response

$75 ‐ $150K

Note: Large market assessments that incorporate both secondary, qual and quant can range from $75K - $250K 36

To be successful a technology must differentiate itself from other competitive

products and be positioned in such a way that carves out a market niche.

Unmet Medical Need --- But is It Differentiable?

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The Most Clinically Differentiated Drugs Have Greatest ROI

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Positioning – It’s All About Perception

• Differentiation is what a company does to develop the product to allow it to sell and compete in the market

• Positioning or a positioning statement is what a company does to create a perception about that product or the company.

Positioning is a battle for your mind. It is not a tagline

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A Perceptual Map Based On Treatment Of Pain And Safety

Gentleness

Effectiveness

+

-

+-

Tylenol

Bufferin

Advil

Excedrin

CelebrexGeneric “Pharmacy

Brand” Aspirin

Aleve

Tylenol was perceived as a safer and more effective alternative for pain.

Narcotic

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Agenda

• The Perpetual Licensing Student• Sourcing or “Buy-Side” Licensing • Marketing or “Sell-Side” Licensing• Market Research

• Rationale, Methods and Types• Use of Non Confidential and Confidential Presentations• Handling “Returns”

Non-Confidential

• Know your audience and tailor the document.

• State in the document it is non-confidential and be sure to make sure your team understands it is non confidential!

• Try to limit your presentation to no more than 15 - 20 slides if possible

• Do not include P&L, cash flow or other financial statements.

• Use PDFs.• Hard copy: adopt the same story, but keep

it to no more than two pages.

• Make sure the CDA is executed and presentations are labeled confidential.

• Know your audience.• Know the time allotted.• Do not submit as a first pass • Be prepared to discuss more detailed

information about– Preclinical, clinical data.– Patent estate (note: this is not a freedom to operate

exercise )

• Remember this is not due diligence.– Avoid sharing financial documents, spreadsheets or

full market research reports. This is your know-how!

– Do not share clinical/regulatory documents.

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Confidential

Avoid LOUD fonts , vibrating colors and use of shadows.Make sure it looks professional!

Partnering Presentations

Agenda

• The Perpetual Licensing Student• Sourcing or “Buy-Side” Licensing • Marketing or “Sell-Side” Licensing• Market Research

• Rationale, Methods and Types• Use of Non Confidential and Confidential Presentations• Handling “Returns”

Returned Technology: Now What?

To the extent goods are “damaged” depends on the rationale for termination.

Licensor

Licensee 1Terminates

Licensee 2Secondary Partnership

Initial Partnership

Returned Asset

Source: Allicense Meeting, 2014. Locust Walk Partners44

Chances for Re-Partnering Based on Partner’s Rationale for Termination

• Partner may terminate after portfolio decisions or other material event

• Vague and unclear.

• Delays due to internal capabilities or regulatory issues

• Delays reduce patent exclusivity and lowers deal value

• Date fails to meet partner’s expectations or was done “wrong”

• Partner obligations exceed risk adjusted potential of the asset

• Increases perceived clinical risk and may deteriorate deal value

• Re-partnering is delayed until new compelling data emerges

• Reduced commercial potential due to

Competition Clinical issues TTP revisions Pricing and reimbursement

• Partnership is delayed until commercial assessment is revised or after NDA approval.

Issue Rationale Implications for Re-Partnering

Strategic Fit

Development

Commercial

Clinical Data

Source: Allicense Meeting, 2014. 45

Partnership Agreements Are Often Terminated in Phase I to Phase IIb and Re-partnered in Phase III

Source: Allicense Meeting, 2014. Locust Walk Partners46

Source: Allicense Meeting, 2014. Locust Walk Partners

Examples

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CONTACT:Patricia Sinatra+1.650.274.7488

psinatra@serinatherapeutics.com (work)psinatra@Comcast.net

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Questions or Suggestions?

Thank You!