IMS Health Capital - EBD Group

IMS Health Capital: EBD Partnering Analysis Sam Murphy Dan Ross Grace Conway Toria Justicz

September 2015

www.imshealthcapital.com

IMS Health Capital (IMSHC) is a niche investment bank focused on creating value for life science companies Strategic Insights

Global Network

• Thousands of IMS strategy consulting projects in the pharma/biotech industry each year

• 1st degree relationships with virtually every pharma/biotech company in the world

• Deep understanding of markets and therapy areas

• Local IMS offices in over 100 markets

Unparalleled Data

IMS Health Capital

• Privileged access to a wealth of IMS Health resources • Vast array of healthcare data sets provide accuracy and credibility in valuations and forecasts

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IMS Health Capital, Inc. is a wholly-owned subsidiary of IMS Health www.imshealthcapital.com

Experienced Team • Confluence of investment banking, strategy consulting, and scientific expertise

• Flexible fee structure which aligns incentives

Contents • Data overview • Aggregate data analysis • Investor analysis - invites to investors • Pharma analysis- invites to pharma

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We conducted an analysis of meeting invitation outcomes across four different conferences

4909 companies Data and Analysis

• Data provided by EBD group on meeting outcomes from four major conferences • All data was completely anonymized prior to analysis − Companies referred to by an ID number − Only identifiable information is country and number of employees

• Scheduling success was analyzed across various attributes, including: − Number of fields completed in company profile − Main sector − Financing round − Therapeutic area focus − Phase of development 4


5

More than 3/4 of companies filled out 5-10 profile fields, but completed fields is not strongly correlated with invite success Percentage of scheduled meetings by fields completed, all conferences Invites Sent 0

5,000

3

Fields completed

7

11 12 13 14

28% 72%

178

79%

313 82%

426

16%

16%

40,000

106

18%

9

35,000

105

21%

18%

30,000

316

21% 79%

8

10

25,000

84% 82% 84%

18% 17%

618

82%

773 776

Number of companies

6

20,000

20% 80%

4 5

15,000

15% 85%

1 2

10,000

587

83%

272

26% 74%

60

30% 70%

10

14% 86%

4

15

0

Regardless of the number of profile fields completed, on average companies had a ~15-20% success rate for accepted invites 6

Scheduled

Requested + Declined

Pharma and biotech companies hold the largest number of meetings across conferences Percentage of scheduled meetings by main sector, all conferences Invites Sent 0

Biotech / R&D Services Professional Services and Consulting

5,000

Main sector

Biotech - other

25,000 30,000

36%

67%

60,000

Percent of invites scheduled by main sector

64%

Biotech / R&D Services Professional Services and Consulting Biotech - Tx and Dx

33%

13% 87%

Supplier & Engineering

10% 90%

9% 13% 24% 36%

Pharma 23%

Public / Non-Profit Org

15%

Medical Technology

33%

Investor 15%

Biotech - other Medical Technology Supplier & Engineering

Media

50,000 55,000

76%

77%

85%

40,000 45,000

87%

24%

23%

35,000

91%

13%

Pharma

Investor

15,000 20,000

9%

Biotech - Tx and Dx

Public / Non-Profit Org

10,000

24% 76%

Media

13% 10% 24%

Service providers face the steepest hurdles in scheduling meetings 7

Scheduled


Early-stage private companies represent the most common stage of financing among participants Percentage of scheduled meetings by financing round, all conferences Invites Sent 0

Equity - Start-up Equity - Seed No category

Financing round

Equity - First stage Equity - Second stage

500

1,000

1,500

16%

2,000

2,500

3,000

3,500

17%

IPO Post-IPO Gov’t subvention Convertible loan Research grants Debt financing

5,000

83%

29%

71%

23%

77%

19% 29%

4,500

84%

Percent of invites scheduled by financing round Equity - Start-up

81%

Equity - Seed Equity - Later stage

4,000

71%

16% 17% 29%

No category 23%

Equity - First stage

36% 64%

Equity - Second stage

25% 75%

19% 29%

Equity - Later stage IPO

34% 66%

36% 25%

Post-IPO 18% 82%

Gov’t subvention Convertible loan

15% 85%

Research grants 46% 54%

Debt financing

34% 18% 15% 46%

Unspecified stage of development lead to significantly higher acceptance rate than specification of equity start-up or seed stages 8

Scheduled


Oncology dominates number of invites, but does not stand out in meeting acceptance rate Percentage of scheduled meetings by therapeutic sector, all conferences Invites Sent 0

1,000

2,000

Oncology

Therapeutic sector

Endocrine/Metabolic

23%

77%

33% 26%

Oncology Nervous System Infectious/Parasitic Digestive Blood/Immune Endocrine/Metabolic Cardiovascular Musculoskeletal Genitourinary Respiratory Skin Mental Eye Diseases Abnormal clinical/lab Congenital malformations Ear Diseases Morbidity and mortality Injury, poisoning Pregnancy, childbirth

74%

23%

77%

Skin

27%

73%

79%

23% 77%

Mental

27% 73%

Eye Diseases

Injury, poisoning

20,000

Percent of invites scheduled by therapy area

67%

Respiratory

Morbidity and mortality

19,000

79%

21%

Ear Diseases

8,000

73%

Genitourinary

Congenital malformations

7,000

75%

27% 21%

Abnormal clinical/lab

6,000

75%

25%

Blood/Immune

Musculoskeletal

5,000

74%

25%

Infectious/Parasitic

Cardiovascular

4,000

26%

Nervous System Digestive

3,000

31% 69% 32% 68% 34% 66% 14% 86% 18% 82%

Pregnancy, childbirth

26% 25% 25% 27% 21% 23% 33% 26% 21% 23% 27% 23% 27% 31% 32% 34% 14% 18%

44% 56%

Among major therapy areas, CV has the highest rate of scheduling success 9

Scheduled


44%

Early-stage assets represent the largest number of meetings overall, but clinical data helps to drive meeting scheduling Percentage of scheduled meetings by phase of development, all conferences Invites Sent 0

5,000

Preclinical

Phase of development*

Phase II

Lead optimization

10,000

22%

15,000

78%

28%

72%

19%

81%

Percent of invites scheduled by phase of development Preclinical

Discovery

19%

Phase III

31%

Phase I

33%

81%

28%

28%

Lead optimization

19%

Discovery

19%

69%

67%

Phase III

31% 33%

72% On the Market

NDA

22%

Phase II

Phase I On the Market

20,000

58%

NDA

28% 42%

42%

Phase II invites outnumber Phase I invites, with potential contributions from forwardlooking positioning and repurposed drugs entering Phase II studies directly 10

* Pre-clinical, lead optimization, and discovery all represent pre-clinical assets, but categories were maintained separately to provide additional detail Scheduled Requested + Declined

Higher volume of invitations sent is inversely corellated with meeting acceptance rate Number of Companies

Number of Outreaches per Company 1,500 1,000 500 0

1,066 911 698 455 320 273 208 146 257 121 101 68 109 75 45 23 19 6 0

6

1

Majority of companies sent between 1 and 50 invites to other companies, while a large segment attended the conferences and did not send any invites

1- 11- 21- 31- 41- 51- 61- 71- 81- 91- 101-151-201-251-301-351-401-501- 550 10 20 30 40 50 60 70 80 90 100 150 200 250 300 350 400 450 500

Scheduled Invites (%)

Invites Sent per Company

Average Rate of Scheduled Meetings by Number of Outreaches

50

43% 38% 33% 19% 29% 25% 21% 17% 22% 18% 13% 9% 8% 9% 8% 7%

40 30 20 10 0

0% 0

1%

1- 11- 21- 31- 41- 51- 61- 71- 81- 91- 101-151-201-251-301-351-401-501- 550 10 20 30 40 50 60 70 80 90 100 150 200 250 300 350 400 450 500

Invites Sent per Company 11

5% 7%

Companies that sent more invites saw a decrease in scheduling success, likely due to the lack of specificity in their outreach


12

Early-stage companies submit the highest number of meeting requests to investors Percentage of investor accepted meetings by financing round, all conferences Invites Sent 50

Equity - First stage

18%

Equity - Start-up

17%

Financing round

No Category Equity - Later stage Convertible loan

13% 21%

200

Post-IPO

27% 73%

300

82% 83% 87% 79%

Percent of invites to investors scheduled by financing round Equity - First stage Equity - Seed Equity - Start-up Equity - Second stage No Category Equity - Later stage Convertible loan Government subvention Post-IPO IPO Research grants Debt financing

87%

Gov’t subvention

250

82%

22% 78% 13% 62% 38%

IPO

150

18%

Equity - Seed


100

To Investors

0

29% 71%

Research grants Debt financing

18% 18% 17% 13% 21% 22% 13% 62% 27% 29%

Relatively little variation in meeting acceptance rate across equity stages 13

Scheduled


Investors are most often solicited by biotech companies Percentage of investor accepted meetings by main sector, all conferences Invites Sent 500

Biotech - Tx and Dx

Main sector

21%

Professional Services and Consulting

13%

Pharma

26%

Biotech / R&D Services

1,000

1,500

2,000

2,500

3,000

79%

To Investors

0

87% 74%

13%

87%

Percent of invites to investors scheduled by main sector Investor Public / Non-Profit Orgs

64% 79%

36%

21%

Medical Technology

13% 87%

Biotech - other

12% 88%

Biotech - Tx and Dx Professional Services and Consulting Pharma

13%

Biotech / R&D Services

13%

21% 26% 36%

Investor

Supplier & Engineering

10% 90%

Media

16% 84%

21%

Public / Non-Profit Orgs Medical Technology

13%

Biotech - other

12%

Supplier & Engineering Media

10% 16%

Pharma companies and other investors are more likely to succeed in scheduling investor meetings 14

Scheduled


Investors received >3 times more oncology invites compared with any other sector, but were not more likely to accept them Percentage of investor accepted meetings by therapeutic sector, all conferences Invites Sent 100

Oncology Infectious/parasitic Nervous system

200

23% 20%

80% 18% 82% 24% 76%

Therapeutic Sector

15% 85% 12% 88%

Cardiovascular

26% 74%

Diseases of the eye

8% 92%

Mental/behavioural

Injury/poisoning Morbidity/mortality

700

800

900

1,000

Percent of invites to investors scheduled by therapeutic sector Oncology Infectious/parasitic Nervous system Digestive Endocrine/metabolic Musculoskeletal Respiratory Cardiovascular Diseases of the eye Mental/behavioural Blood Genitourinary Skin Diseases of the ear Injury/poisoning Morbidity/mortality Abnormal clinical/lab

27% 73%

Respiratory

Diseases of the ear

600

77%

Musculoskeletal

Skin

500

78%

Endocrine/metabolic

Genitourinary

400

22%

Digestive

Blood

300

13% 87% 18% 82% 26% 74% 23% 78% 6% 94% 13% 87%


22% 23% 20% 18% 24% 27% 15% 12% 26% 8% 13% 18% 26% 23% 6% 13% 18%

18% 82%

Investors may be less interested than pharma in primary care indications requiring large late-stage trials (e.g. CV, CNS, respiratory) 15

Scheduled


To Investors

0

Investors primarily hold meetings to discuss early-stage assets Percentage of investor scheduled meetings by therapeutic sector, all conferences Invites Sent 100


Preclinical

19%

Lead optimization

20%

Discovery

20%

Phase III

300

400

21%

Phase II

Phase I

200

20%

600

700

1,000

80%

Percent of invites to investors scheduled by phase of development Preclinical

74%

Phase II

80%

71%

21% 19%

Lead optimization

20%

Discovery

20%

Phase III

NDA

29% On the Market

900

81%

Phase I NDA

800

79%

80%

26%

500

To Investors

0

26% 20% 29%

On the Market

62% 38%

Phase I appears to be a modest inflection point for investor interest 16

* Pre-clinical, lead optimization, and discovery all represent pre-clinical assets, but categories were maintained separately to provide additional detail Scheduled


38%


17

Pharma companies predominantly meet with early-stage, private companies Percentage of pharma accepted meetings by financing round, all conferences Invites Sent 50

No Category

Financing round

41%

Government subvention

350

400

450

500

550

600

650

700

76%

18%

IPO

Research grants

300

80%

37%

17%

Convertible loan

250

69%

24%


Post-IPO

200

20%

Equity - Later stage Equity - Seed

150

31%

Equity - Start-up Equity - First stage

100

To Pharma

0

63% 82%

Percent of invites to pharma scheduled by financing round

83% 59%

No Category Equity - Start-up Equity - First stage Equity - Later stage Equity - Seed Equity - Second stage IPO Post-IPO Convertible loan Research grants Government subvention Debt financing

47% 53% 26% 74% 14% 86% 33% 67%

Debt financing

31% 20% 24% 37% 18% 17% 41% 47% 26% 14% 33%

Pharma companies do show a high level of interest in pre and post IPO companies based on meeting acceptance rate 18

Scheduled


Pharma companies are more likely to accept meeting invites from pharma companies than biotech companies Percentage of pharma accepted meetings by main sector, all conferences Invites Sent 1,000

Biotech - Tx and Dx Biotech / R&D Professional Services

Main sector

3,000

4,000

25% 7%

6,000

7,000

8,000

9,000

10,000

75%

87% 36%

14%

5,000

93%

13%

Pharma Non-Profit

2,000

To Pharma

0

64%

Percent of invites to pharma scheduled by main sector

86%

Biotech - Tx and Dx Biotech - other Medical Technology Investor Supplier & Engineering

15% 85%

Biotech / R&D

25% 7% 13%

Professional Services

9% 91%

Pharma

30% 70%

Non-Profit

14%

Biotech - other

15%

Medical Technology

7% 93%

36%

9% 30%

Investor Media

15% 85%

Supplier & Engineering Media

7% 15%

Both pharma and biotech meeting invites were accepted at much higher frequency than those from service providers 19

Scheduled


Oncology, CNS, and Infectious Disease are the three most common therapy areas targeted for pharma meetings Percentage of pharma accepted meetings by therapeutic sector, all conferences Invites Sent 500

Oncology

Therapeutic Sector

Nervous

1,000

27%

Digestive

28%

72%

Endocrine/metabolic

26%

74%

30%

70%

Cardiovascular

39%

61% 29% 71%

Genitourinary

29% 71%

Skin

20% 80%

Mental

Injury/poisoning Morbidity/mortality Malformations

Pregnancy/childbirth

Oncology Nervous Infectious/parasitic Digestive Endocrine/metabolic Blood Musculoskeletal Cardiovascular Genitourinary Skin Mental Respiratory Eye Abnormal clinical/lab Ear Injury/poisoning Morbidity/mortality Malformations Pregnancy/childbirth

22% 78%

Musculoskeletal

Ear

3,000

3,500

4,000

4,500

Percent of invites to pharma scheduled by therapeutic sector

78%

Blood

27% 73%

36% 64%

Eye

2,500

72%

22%

Respiratory

2,000

73%

28%

Infectious/parasitic


1,500

To Pharma

0

44% 56% 41% 59% 18% 82% 17% 83% 32% 68% 43% 57%

27% 28% 22% 28% 26% 22% 30% 39% 29% 29% 20% 27% 36% 44% 41% 18% 17% 32% 43%

As with the overall analysis, the highest volume therapy areas did not have the highest levels of meeting acceptance rates 20

Scheduled


Pharma companies hold meetings on pre-clinical assets most often Percentage of pharma accepted meetings by therapeutic sector, all conferences Invites Sent 250

Preclinical


Discovery

Phase III

750

1,000 1,250 1,500 1,750 2,000 2,250 2,500 2,750 3,000 3,250 3,500

24%

Phase II

Lead optimization

500

76%

32%

68%

18%

17%

To Pharma

0

82%

Percent of invites to pharma scheduled by phase of development

83%

36%

Preclinical

64%

34%

66%

Discovery Phase III

On the Market

33%

67%

Phase I

On the Market NDA

32%

Phase II Lead optimization

Phase I

24%

NDA

37% 63%

18% 17% 36% 34% 33% 37%

However, clinical data drives significantly higher rates of meeting accepts 21

* Pre-clinical, lead optimization, and discovery all represent pre-clinical assets, but categories were maintained separately to provide additional detail Scheduled
