“diligence issues / growth by acquisition strategy” · • primary business: product partnering...

“Diligence Issues / Growth By Acquisition Strategy”

www.canaccordadams.com

OVERVIEW PRESENTATION

Boston – New York – San Francisco – Houston – Chicago – London – Vancouver – Calgary – Toronto – Montreal

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Launched in January 2006 with the merger of Canaccord Capital and Adams Harkness

Publicly listed on both the Toronto Stock Exchange as well as London’s Alternative Investment Market

2007, 577 completed transactions (201 lead-managed equity) with a deal value of approximately $42 billion

53% employee owned

Able to list companies on seven exchanges in three countries

Significant footprint in the Life Sciences

The Canaccord Adams Platform

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Calgary

San FranciscoNew York

Boston

MontrealToronto

London

Houston

VancouverCalgary


Boston

MontrealToronto

London

Houston

Calgary


Boston

MontrealToronto

London

Houston

Vancouver

Chicago

Calgary


Boston

MontrealToronto

London

Houston

VancouverCalgary


Boston

MontrealToronto

London

Houston

Calgary


Boston

MontrealToronto

London

Houston

Vancouver

Chicago

Global Presence


5

$0

$100

$200

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$400

$500

$600

$700

$800

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008

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$60

$80

$100

$120

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Revenue ($mm) Net Income ($mm)


Canaccord Capital’s Financial Record

Note: Excludes one-time charges

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600 companies covered

67 research analysts

8 focus sectors

#1 ranked research

StarMine, Brendan Wood, Thomson Extel

Frequent media appearances

CNBC, Bloomberg

Over 1,500 institutions covered

100+ traders, sales/traders & market makers

Market making

700 companies

7 exchanges

Sales specialists by geography and industry

Experienced private capital group

One integrated team

80 investment bankers

2007 transaction experience

577 total transactions

201 lead or co-lead managed equity transactions

$42B in deal value

Investment Banking Research Sales & Trading


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JSBJSB--Partners: Company OverviewPartners: Company Overview

global partners in life science transactions

20082008

88

Confidential Confidential

Boston MunichBoston Munich

JSBJSB--Partners: Adding Value in Product CollaborationsPartners: Adding Value in Product Collaborations

OUR FOCUS:

• Transaction advisory firm with broker-dealer license serving life science companies

• Primary business: product partnering and licenses

• Expertise in running sell-side product auctions

WHO WE ARE:

• Senior team with broad operating experience, providing leverage to management

• Global presence (US, EU, Asian) and deep industry relationships

WHAT WE BRING:

• Track record of successfully closing product deals and M&A

99


Boston MunichBoston Munich100

25 10 4 1

Case Study: Phase I Obesity Compound, Large PharmaCase Study: Phase I Obesity Compound, Large Pharma

Teaser CDA Indicative Offer

Term Sheet

Close deal

Clie

nt rN

PVOffered terms 5X

4 of top 10 Pharma

1010



JSBJSB--Partners: Adding Value in Product CollaborationsPartners: Adding Value in Product Collaborations

OUR FOCUS:

• Transaction advisory firm with broker-dealer license serving life science companies

• Primary business: product partnering and licenses

• Expertise in running sell-side product auctions

WHO WE ARE:

• Senior team with broad operating experience, providing leverage to management

• Global presence (US, EU, Asian) and deep industry relationships

WHAT WE BRING:

• Track record of successfully closing product deals and M&A

1111



Why JSBWhy JSB--Partners? Partners? …… A Successful TransactionA Successful Transaction

• Senior partners manage the project, no delegation

• Global reach – representation in the US, EU, and Asia

• Not only financial expertise, but also extensive bio-pharma industry experience

• Personal contacts with decision makers with both strategic and financial buyers

• Empower the seller by leveraging time and competition

• Complement internal BD resources to manage the surge in capacity

• Track record of success

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MunichMunich BostonBoston

JSB-Partners GmbHEmil-Geis Str. 4D-82031 GrünwaldGermanyT. +49-89-64948840F. +49-89-64948844

JSB-Partners LP30, Monument Square Concord, MA 01742USAT. +1-978-318-9799F. +1-978-318-6966

[email protected]@jsb-partners.com [email protected]@jsb-partners.com

[email protected]@[email protected]@[email protected]@jsb-partners.com

www.jsb-partners.com

Global PresenceGlobal Presence

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Material Presented for DiscussionSeptember 2008

Crosstree Capital Partners Overview – Clinical Development Services

Crosstree C

apital Partners Overview

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Crosstree Capital Partners Overview

Exclusive Sales

Acquisitions

Private Capital Raises

Strategic Advisory

Fairness Opinions / Valuations

Crosstree advises shareholders in sales, mergers and divestituresStrengths - Our deep industry knowledge and extensive industry contacts allow for a highly efficient and confidential transaction process

Service Capabilities Target Size

Crosstree offers equity and debt capital raising advisory to middle-market companiesStrengths – Our bankers have structured numerous complex transaction structures, from venture capital to senior bank debt

Crosstree provides assessment of strategic alternatives for companies considering new opportunities and threats Strengths – Our bankers have extensive experience in all facets of corporate finance; we always strive to provide objective, unbiased advice

Crosstree can perform transaction-related fairness opinions and general valuation projectsStrengths – Two of Crosstree’s founders are CFA charterholders, a designation focused on equity and enterprise valuation

Crosstree advises institutional and strategic investors pursuing platform, add-on and strategy re-defining acquisitions Strengths - Our comprehensive coverage of niche industry subsectors provides powerful insight into possible acquisitions

$10 - $250 MM Enterprise Value

$5 - $50 MM

Case-by-case

Case-by-case

$10 - $250 MM Enterprise Value

Crosstree C


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Discovery Development & Validation Market Launch

Pre-Clinical Phase I – III Phase IV

ADME/ Tox

Animal Models

Pharmacokinetics

Pathology

Phase 0

Technology

Health Economics

MedicalCommunications

Laboratory Services

Adverse Events

Outcomes

Radioanalysis

GeneticToxicology

Neuropathology

PatientRegistries

Online TrainingElectronic Regulatory

Submissions

DataManagement Monitoring Registries

In-Vitro

Bio-Informatics

Clinical Project ManagementStaffing

Medical Writing

Non-Clinical IT Clinical IT

Micro-Dosing

IRB

Phase I Phase II Phase III

Recruiting

SMO Network

ECG Imaging

EDC

Database

CTMS

IVRS

IRS

RegulatorySafety

Multimedia

Post MarketingSurveillance

ePRO

DiseaseBurden

Pricing Support

EconomicEvaluation

DrugInteraction PharmacodynamicsBioavailability

Bio-SafetyTesting

Analytical Bio-Analytical

Medical Device CRO

Crosstree C


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Medicinal Chemistry

Chemical Synthesis

Combinatorial Chemistry

Chiral Chemistry

Analytical Services

Preformulation Development

Stability Testing/ Storage

Qualification Services

QC/ Microbiology Testing

Regulatory Support

API Development

BCP Manufacturing

Pre-Clinical Manufacturing

Clinical Trial Manufacturing

Scale Up Services

Adverse Event Reporting

API Manufacturing

Scale Up/ Pilot Plant

Bioprocessing

Protein Manufacturing

Peptide Manufacturing

Protein Synthesis

Protein Purification

Peptide Synthesis

Peptide Purification

Fermentation

Cell Culture

Validation Services

Validation Services

Secondary Manufacturing

Clinical Trial

Randomization

Clinical Trial Kitting

Clinical Trial Labeling

Clinical Trial Distribution

Clinical Trial Supplies

Distribution

Lyophilization

Contract Labeling

Contract Packaging

Packaging & Labeling Logistic Services

Charecterizaion Services

Method Development

Formulation Development

Drug Delivery Development

Discovery Development & Validation Commercial Services

Warehousing/ Storage

Clinical Trial Packaging

Chemistry Services

Fill/ Finish

Product Development Primary Manufacturing

Sterile Fill/ FinishFinished Dosage Form

Crosstree C


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DIAGNOSTIC SERVICESRoutine diagnostic testingEsoteric testingDiagnostic imaging

DIAGNOSTIC LABORATORIESCentral laboratories

Reference laboratoriesSpecialty laboratories

Core laboratoriesImaging core laboratoriesCardiovascular core laboratories

LIFE SCIENCES TOOLS & CONSUMABLESAnalytical Instruments

ChromatographySpectroscopyNMR / IR, etc.

Molecular Biology Tools & ReagentsGenomic tools and reagentsProtein AnalysisMicro array technologies

Chemistry Based ReagentsLab Consumables

IN VITRO DIAGNOSTIC PRODUCTSImmunodiagnosticsMicrobiology testingMolecular diagnosticsPoint of care testing

IN VITRO DIAGNOSTIC INSTRUMENTS AND CONSUMABLESAutomated immunoassayClinical ChemistryGenetic TestingMolecular diagnosticsReagentsCollection devices

IN VIVO DIAGNOSTIC PRODUCTSContrast mediaFilm

IN VIVO DIAGNOSTIC INSTRUMENTSRadiographyMammographySonographyMagnetic resonance imagingNuclear ImagingImaging enabling tools

CLINICAL DEVELOPMENT SERVICESContract research organizationsSite management organizationsClinical recruitingTrial management systems

PRE-CLINICAL DEVELOPMENT SERVICESDiscovery research servicesBio analytical servicesChemistry servicesPre-clinical pharmacologyCombinatorial chemistry, screening and optimizationTarget selection and validation

CONTRACT SALES AND MARKETINGContract sales organizationsCRM software providersEducational services

CONTRACT MANUFACTURING ORGANIZATIONSPharmaceutical packaging and suppliesAPIs/Bulk pharmaceuticals and chemicals (APIs and BPCs)Finished dosage forms (FDFs)Specialty pharmaceuticals

Crosstree C


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Current Engagement

Prior/ Closed Engagement

M&A Overview

www.canaccordadams.com

Boston – New York – San Francisco – Houston – Chicago – London – Vancouver – Calgary – Toronto – Montreal

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Biotech M&A ReviewKey Life Sciences Trends Driving M&A Dialogue

� Focus of drug development shifts from organs to molecular pathways

� Dramatic expansion in number of potentially “druggable” proteinsR&D

Geographical Diversification

Large-Cap Pharma

Regulatory / Political

Financial

Clinical Diversification

� Worldwide diversification of assets and customers

� Pharma patent expiries and large stockpiles of cash

� Pharma buying biologics capabilities: Organon, CAT, MedImmune, Serono, GlycoFi, and Sirna

� Increased regulatory / political pressure (e.g. FDA’s focus on post-approval studies)

� Potential shifts in the ways drugs are tested, approved, marketed, and reimbursed – everything is on the table

� Burn rates accelerating

� Desire of innovator companies to retain downstream economics

� Diversification of clinical development risk

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Biotech M&A Review

The IPO Market Continues to be Selective

� While 2007 saw an increase in pre-money equity valuations, most of the companies can be considered specialty pharma or later stage life sciences companies

� Only late stage biotech companies are accessing the public markets through an IPO

� Only Sirtris and Amicus priced in 2007 with Phase II data

� Investors want to fund companies with meaningful catalysts within six to twelve months of IPO pricing

� M&A is viewed as a viable exit alternative to an IPO financing (Agensys, NovaCardia, Ilypsa, Domantis, Syntonix, Corus, GlycoFi)

Increased valuations driven by marketed products

Investors favoring less risky, later stage opportunities

Near-term milestones are essential

Robust M&A environment – a viable alternative

Over $60 Billion Dollars of Lost Sales

Partner 2007A 2008E 2009E 2010E 2011E 2012E Key Patent Expiry

$2.18 $2.30 $2.45 $2.42 $2.11 $1.81Lipitor, Caduet, Viagra, Detrol, Geodon, Xalatan

$7.22 $8.06 $8.42 $9.09 $8.52 $8.35 Plavix, Taxotere

$4.20 $4.50 $4.80 $4.96 $4.58 $4.10 Seroquel, Crestor

$3.21 $3.30 $3.72 $4.00 $4.45 $4.02 Cozaar / Hyzaar, Singulair

$3.52 $3.45 $3.51 $3.34 $3.07 $3.22 Effexor, Prevnar, Protonix

$1.38 $1.68 $2.00 $2.28 $2.34 $2.16 Plavix, Avapro

$3.55 $3.95 $4.45 $4.85 $5.16 $4.17 Zyprexa

EPS Estimates

Source: Wall Street Research

Biotech M&A ReviewLarge-Cap Pharma Companies Face Earnings Gaps

$14.4

$7.0

$17.9

$30.6

$26.4

$16.5

$0

$5

$10

$15

$20

$25

$30

$35

$40

2003 2004 2005 2006 2007 2008 YTD

Agg

rega

te T

ran

sact

ion

Va

lue

($

bn

)

Aggregate Transaction Value

Merger and Acquisition Activity in the Biotech Sector

Source: SDC and Company press releasesNotes: Excludes transactions less than $50 million or deals with undisclosed values2008 YTD as of 10/22/08

Biotech M&A Review

M&A Activity

Therapeutic Area Stage of Development

Oncology27%

Infectious Disease19%

Immunology16%

Respiratory8%

Opthalmology3%

Genito-urinary2%

Other25%

Pre-Clinical17%

Phase I13%

Phase II21%

Phase III19%

Marketed30%

Source: SDC and Company press releasesNotes: Excludes transactions less than $50 million or deals withundisclosed values from 2005 – 2008 YTD

Biotech M&A Review

Overview of Targets

Bolt-On vs. New Therapeutics Average Premia Paid

25.1%

43.2%

62.5%

66.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

2005 2006 2007 2008 YTD Range

30-Day Premia

Bolt-On89%

New Therapeutics11%

Source: SDC and Company press releasesNotes: Excludes transactions less than $50 million or deals withundisclosed values from 2005 – 2008 YTD as of 10/22/08

Biotech M&A Review

Premia Paid have Increased

Source: Company filings and press releasesNotes: Transaction value in millions of $USD

Acquiror / Target Strategic RationaleDate Announced Transaction Value

$725

$8,493

04/22/08

04/10/08

Significantly enhances GSK’s metabolic, neurology, immunology, and inflammation research efforts by establishing a presence in the field sirtuins, a recently-discovered class of enzymes that are believed to be involved in the aging process

Strengthens Takeda’s global oncology portfolio, led by Millennium’s flagship product Velcade, and further enhances its pipelineExpands Takeda’s global pipeline in GI, adding a novel anti-aplha4beta7 antibody and an oral CCR9 inhibitor for treatment of IBD

$33805/28/08Significantly enhances BMY’s development and commercialization capabilities to bring new treatment options for patientsAdds to BMY’s portfolio of clinical programs

$30006/16/08Broadens MRX’s aesthetics portfolio pipeline with LipoSonix’s body contouring technologyProvides access to the U.S. aesthetics market sooner with new technology

$56706/08/08Broadens HOLX’s range of diagnostic product offerings, and enhances the revenue and earnings growth potentialsBetter positions HOLX to take products quickly and effectively to market

$58107/15/08Enhances VPHM’s pipeline with a replacement therapy for patients with hereditary angioedemaAllows VPHM to enter a therapeutic market that is in need of more treatment options

$3,26108/12/08Expands R&D pipeline, especially in life-enhancing plasma-derived therapies and integrates manufacturing with greater efficiencyCreates a combined company with one of the broadest portfolios in the plasma-derived therapeutics industry

Biotech M&A Review

Overview of Recent M&A Activity

MARKET UPDATE

28Project Liferay

MARKET U

PDATE

29Project Liferay

MARKET U

PDATE

30Project Liferay

MARKET U

PDATE

31Project Liferay

MARKET U

PDATE

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Panel Discussion

“diligence issues / growth by acquisition strategy” · • primary business: product partnering...

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