Value Drivers Under the Influence—How Licensing and Key Events Affect Valuation

The 14th Annual BIO CEO & Investor Conferenceplenary session – Value Drivers Under the Influence – started on a high note, with Michael Margolis, RPh, Managing Director of Healthcare Investment Banking at ROTH Capital Partnerspointing out that ‘we’re seeing the markets open up right now with lots of pharmaceutical and biotech activity.’

The panel of industry experts who have executed successful deals focused on the age-old conundrum of when to partner, and agreed that oftentimes, there is no clear answer.

“There are many pros and cons regardless of when you decide to engage in a partnership; there is no perfect timeframe,” said Barbara Yanni, JD, LLM, CLP, Vice President and Chief Licensing Officer, Merck & Co. “We try to be flexible and show that we are interested all along the way.”

“Timing largely depends on access to capital and the patience of your shareholders,” saidRonald C. Renaud, Jr., President & CEO of Idenix Pharmaceuticals.

While investors are trying to hold on to more value through co-development and co-marketing rights, companies are realizing the importance of long-term value creation through successful R&D.  Margolis asserted that what investors are primarily focused on are companies that can provide a strong growth engine that is stable and drives value over time.

“We have exciting, promising new compounds coming to fruition through our research, but we were financed to go through Phase II trials for sickle cell disease,” said Rachel King, Chief Executive Officer of GlycoMimetics, Inc. “We really wanted and needed to bring our portfolio forward.”

Validation from big pharma may be another key consideration, but panelists were not entirely in agreement on this point.

“The data should speak for itself, you shouldn’t need additional validation,” said Renaud.

“Validation is important, but the main driver is financial,” said Yanni. “It depends on the therapeutic area as well – specialty areas are easier than primary care, as it is easier to reach patients.”

King provided an example of how validation helped to support GlycoMimetics’ data, pointing out that ‘the due diligence team at Pfizer is bigger than our entire company.’

Ben Bonifant, Senior Vice President and Practice Area Leader at Campbell Alliance moderated the session.