Pullan's Pieces #128                                     
Pullan's Pieces #128
July 2017
BD News and Analysis for  Biotech and Pharma
Dear --FNAME--,
BIO has come and gone.   Summer is flying by.  

If you missed it, my latest panel  on "Non-IO in an IO World" is now available as a whitepaper, and I think the panelists' insights are fun and meaningful.  Check it out!  




1.  Big pharma partnering patterns

2.   Cancer is BIG

3.  Money, money, money:  1st half VC, IPO and M&A activity

4.  Platform or products? 

Hope you enjoy the rest of summer!  



Big pharma partnering patterns
Nature's Biopharma dealmakers did a great analysis of the biggest companies and their deal patterns.  They looked at the companies of the top 50 companies by sales that did at least 5 buy-side deals (M&A, option, license/jv, research only) in 2016.    

It is a great small article.  Here is one of the 3 figures.  

What are the biggest take-aways for me? No surprises.  

  • Deal type?  Licensing and research collaborations are the biggest categories for most of the big companies.  Some do M&A and some do options.  
  • Deal stage?  Deals done before clinical stage are very common (making 50% or more for 8 of the group) but Sanofi leads the list for proportion of early deals and Merck KGaA did no deals before clinical stage in 2016.
  • Therapeutic area?  As we have seen in so many different ways, oncology is number 1, followed by neurology.  Only Biogen did no oncology deals in this group of dealmakers in the top 50 companies.  

Cancer is BIG
Endpoints discusses the PhRMA analysis of the industry pipeline and highlights the huge impact of cancer.  

I've taken a subset of the data in the Endpoints piece to make the graphic below.  For projects in Phase 1, 2 and 3, oncology is 42% of all the projects tracked.  Neurology is 2nd.  
Endpoints cites some other big points:  

— Three out of four projects in the clinic were angling for first-in-class status, ..... Me-too drugs are completely out of fashion, unlikely to command much weight with payers.

— 822 projects in clinical development were for orphan drugs. .

— There were 731 cell and gene therapy projects in the clinic.  
MONEY, MONEY, MONEY:  1st Half VC, IPO, M&A activity  
Silicon Valley Bank put out its summary of healthcare investments and exits.  

Big messages include:  

  • Biotech and pharma VC investments continue to be strong in number and dollar volume, on track to be similar to 2016.  Digital health is included in the biotech/pharma category and some of those are big.  

  • Fund-raising could set a record in 2017, with NEA raising $1B in healthcare funds.  
Series A investments could be record setting with strong 31% participation by corporate ventures.  

  • M&A has been slow.

  • IPOs look likely to match those of 2016 but are for later stage (clinical) companies again.  
The most active investors are a nice mix of VC funds and big pharma corporate venture funds.  

 Oncology and rare diseases are the biggest indications.  
Trevor:  Platform or Products?  
It’s not a fair question.  According to our analysis of data from GlobalData, the truth appears to be that it takes a product to fund a platform.  Far and away, the majority of “platform” companies getting funded by venture capital have a lead candidate that is in some stage of development, most often preclinical or Phase II.  The “use of funds” in the announced headlines and deal briefs indicate that the money will go towards advancing the lead while also deploying capital towards “building out the company’s proprietary platform.”  Pure discovery deals would be a far greater proportion of venture financings if platforms alone were all it took, but it seems clear that some demonstration of the preclinical or clinical relevance is required before investors are willing to bet on a means to an end – the preference remains to bet on the end-game.

That said, companies with a unique approach to drug discovery that can efficiently build meaningful early stage pipelines stand to benefit from the validation of the lead candidate. Successful passage through the stages of development will have an “all boats rise with the tide” effect on the other pipeline candidates, and greater value will be assigned to those programs.  More on this in another newsletter. 

For now, below are a few charts on venture financings where “platforms” are expressly referred to in the press release.  You’ll note that the deals for funding follow quite closely the licensing deals by Stage and Therapeutic Area.

VC financings of platform deals by year
Stage of development for VC financings of platform deals
Oncology the biggest area, CNS generally 2nd.  
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