the power of partnerships - manx biomed of partnerships... · 2019-01-10 · the power of...
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The Power of Partnerships
Lessons from the story of Salix Pharmaceuticals
Your presenter
Lorin K. Johnson, PhDGlycyx Founder, Chairman, Chief Executive OfficerLos Altos, CA & Isle of Man
David TaggartGlycyx Founder, Chief Operating OfficerIsle of Man
LORIN JOHNSON NOT LORIN JOHNSON
Salix Pharmaceuticals: 1989
Founders: Lorin K. Johnson, PhD& Randy W. Hamilton
First Headquarters:Spare room, Sunnyvale, CA (Silicon Valley)
Salix Pharmaceuticals: 1989
Office of CEO Office of Chief Scientist
Salix Pharmaceuticals: 2015
Global Headquarters: Raleigh, NC Digestive Disease Week Conference
• 22 products• Annual Sales: >$1B• 600-strong Specialty Gastroenterology salesforce• Leading company worldwide in gastrointestinal
medicine
Salix Pharmaceuticals: 2015
0
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6000
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USD
Mill
ion
s
NASDAQ Market Capitalization
Mar 30, 2015:
Salix acquired by Valeant Pharmaceuticals International, Inc.
~$15B
Some lessons from the story:
1: It didn’t go at all to plan - improvisation was vital
2: Some brushes with disaster… and some unexpected pieces of good luck
3: None of it would have been possible without partnerships
The original plan:
• Blockbuster Development
– Research 2 yr
– IND enabling preclinical 1 yr
– Phase I/II 2 yr
– Phase III 3 yr
– Approval 1 yr
– Total 9 yr0
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SL1006
SL1005
SL1004
SL1003
SL1002
SL1001
Blockbuster R&D$M
1. Fund development of new blockbuster anti-inflammatory product invented from the proprietary basic science of Dr. Johnson
2. In-license a small (boring) product in the same area (IBD) to help fund R&D and build market presence
What actually happened:1: Fundraising is hard!
Problem: Venture capital firms followed trends and fashions; Salix strategy was NOT haute couture at the time…
+ = $00,000,000.00
Solution: Angel investors and a bootstrap approach – scale back some of the investment planned
What actually happened:2: The support act became the main show
Tight funding Unforeseen delays
HARD CHOICES!
Pursue high-risk innovative science in inflammation
Make sure the ‘sideline’ product gets to market and makes money
What actually happened:3: Had to rely on partners more than expected
Out Sourced
$17M
$5MIn-License
Angel $Equity to Licensor
US Sales&
Marketing
ROWSales &
Marketing
US Sales&
Marketing
Commercial
What actually happened:4: The business plan revenue forecasts were wrong
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0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Plan Total
Actual Total
$M
Year
$100M:5 years
Some lessons from the story:
1: It didn’t go at all to plan - improvisation was vital
2: Some brushes with disaster… and some unexpected pieces of good luck
3: None of it would have been possible without partnerships
Brushes with disaster…
0
10
20
30
40
50
60
70
80
90
100
$U
SD M
illio
ns
US Approval Delay
Company for Sale
SecondaryIPO
Market Capitalization, TSX
…and unexpected good luck
• Aug 1999 - Company for sale for $5M (no buyers)
• Nov 1999 – Astra merges with Zeneca
– Product no longer strategic fit
– Paid milestone payment to Salix and returned all rights
• May 2000 - Europe license re-sold for $24 million to Shire
• July 2000 - USA FDA Approval
…and unexpected good luck
0
10
20
30
40
50
60
70
80
90
100
$U
SD M
illio
ns
US Approval Delay
Company for Sale
Shire Deal
USD
, Mill
ion
sMarket Capitalization, TSX
FDA Approval
Some lessons from the story:
1: It didn’t go at all to plan - improvisation was vital
2: Some brushes with disaster… and some unexpected pieces of good luck
3: None of it would have been possible without partnerships
A portfolio built on partnerships:Valeant era
Partnering strategies:
Invent Develop Commercialize
Internal
External
Partnering strategies: Big Pharma
Invent Develop Commercialize
Internal
External
In-license
Partnering strategies: Traditional biotech
Invent Develop Commercialize
Internal
External
Out-license
Partnering strategies: Specialty Pharma
Invent Develop Commercialize
Internal
External
In-license
Partnering strategies: ‘Open’ Pharma
Invent Develop Commercialize
Internal
External
In-licenseOut-license
Partnering strategies: Virtual pharma
Invent Develop Commercialize
Internal
External
In-license Out-licenseOutsource
The next chapter…
Glycyx Therapeutics, Ltd.
Simple business model: buy > develop > sell
1. Buy promising pharmaceutical development assets cheaply (or free)
2. Create Isle of Man special purpose vehicles to house each asset
3. Change the value and marketability of the assets by funding generation of new clinical data
4. Advance important therapies for major diseases (i.e., cancer, stroke, Parkinson’s Disease) so that larger pharma companies can bring them to patients
5. Sell them for substantially more than their acquisition price + the cost of the clinical program
6. Realize a capital gain in the Isle of Man domiciled parent company
Partnerships are central
DEVELOPMENT PROGRAMS CORPORATE STRUCTURING ACADEMIC COLLABORATIONS
Four opportunities – continuing partnerships
ExitDevelopStructureAcquireIdentify
TSN Therapeutics
GTL-004
GTL-005
GTL-006
Others in early stages of identification
Relenopride in gastroparesis associated with Parkinson’s Disease – a planned Salix partnership derailed by the Valeant acqusition
Methylnaltrexone(Relistor®) in advanced upper GI cancer – in global collaboration with Salix/Bausch
AJT-240 in dialysis complications – in partnership with EA Pharma (formerly Ajinomoto)
Possible future collaborators?
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