Biotech / R&D Services. 9% ... Service providers face the steepest hurdles in scheduling meetings. 24% ..... large l
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
2
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
3
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
Contents • Data overview • Aggregate data analysis • Investor analysis - invites to investors • Pharma analysis- invites to pharma
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
Requested + Declined
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
Requested + Declined
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
Requested + Declined
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
Contents • Data overview • Aggregate data analysis • Investor analysis - invites to investors • Pharma analysis- invites to pharma
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
Equity - Second stage
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
Requested + Declined
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
Requested + Declined
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%
Abnormal clinical/lab
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
Requested + Declined
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
Phase of development*
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
Requested + Declined
38%
Contents • Data overview • Aggregate data analysis • Investor analysis - invites to investors • Pharma analysis- invites to pharma
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%
Equity - Second stage
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
Requested + Declined
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
Requested + Declined
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
Abnormal clinical/lab
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
Requested + Declined
Pharma companies hold meetings on pre-clinical assets most often Percentage of pharma accepted meetings by therapeutic sector, all conferences Invites Sent 250
Preclinical
Phase of development*
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
Requested + Declined