Maximising Shareholder Value through Mergers and Acquisitions

in the Pharmaceutical and Biotech Industry

Wednesday 5^th December 2007, Cumberland Hotel, London

About the conference

The trend for mergers and acquisitions within the pharma and biotech industry looks certain to continue – indeed for many it will be a necessity.  For big pharma it has become a priority in order to replenish the dwindling drugs pipeline.  For medium size companies it remains the main way to reach a critical mass, whilst for smaller companies, the possibility of being acquired remains a major reason that people invest.
Against this background, many mergers and acquisitions do not fulfil their potential with the acquiring company often seeing a fall in share price.

The conference will seek to address how to engage in M&A activity whilst making a decent return for shareholders. 

This will be achieved by looking at the issues in turn: how successful acquirers have achieved their success, how companies that have sold up managed to get the best return for their shareholders, the alternatives to M&A and how the investors themselves look at M&A.

Conference Programme

9.30pm	Opening remarks from the chair and welcome
9.40am	M&A in Pharma & Biotech and why it is necessary for the industry to thrive How the industry has grown through M&A Why M&A has benefitted the shareholders in the long term What successful acquisitions have in common A brief look at the deals that went wrong Will M&A activity increase or decrease in the medium/long term?
10.10am	The acquirers’ viewpoint - why seek acquisitions and how to avoid the pitfalls Analysing the reasons for seeking an acquisition and prioritising them Building a long-term acquisition strategy and avoiding “panic buys” Establishing an in-house risk vs reward model in order to assess the value of potential acquisitions Determining the extent to which the target fits into the original business plan and whether the original business plan needs be adopted in order to accommodate it Assessing the mix of cash, stock or other property to offer – is cash always king? Calculating the extra costs and hassle of integrating the bought technology Where to look for sources of finance Gaining support and agreement for funding at the policy stage so the deal can be agreed quickly Maintaining the value of the acquisition post-deal Reviewing the purchased asset regularly and having a disposal policy if criteria are not met The circumstances in which a merger is preferable to an acquisition Is it possible to build a fully competitive, stand-alone, business through M&A? Are contested acquisitions ever worth the effort? Keeping down the transaction costs (lawyers etc.) Simon Sturge, CEO - Vernalis Onno Van De Stolpe, CEO - Galapagos Tim Wright, CEO - Maelor
11.25am	Morning coffee
11.45am	Stories from the coalface: how different companies maximised returns for stakeholders by being acquired Strategies for identifying and approaching potential buyers Integrating a business acquisition strategy into the business development plan The resources that should be put into seeking a potential acquirer The types of companies that attract potential acquirers and how to move towards that ideal Getting all investors on board ready to accept the right price from the acquiring company Determining whether the best possible price has been achieved for stakeholders Analysing why potential acquirers reject an opportunity and avoiding these pitfalls How to avoid getting “bullied” into accepting a below par offer Why seek to be acquired rather than enter a joint venture or licensing agreement? Is there a level of product development that needs to be achieved before an acquirer will consider you? Protecting the interests of existing employees Assessing the fair market value for your company (as a starting point for negotiation) Jim Phillips, (CEO - Talisker,  now part of EUSA Pharma) Ken Powell, (CEO - Arrow Therapeutics,  now part of AstraZeneca) Michael Lutz, (CEO – Epidauros,  now part of Clinical Data)
12.50pm	Lunch
2.05pm	Alternatives to the acquisition Why an IPO is the most attractive option for a Biotech/Pharma company Extracting maximum value for stakeholders Giving the company the potential for growth The situations in which an IPO is an attractive option and when it would not be appropriate The critical mass needed for an IPO Tim Dyer, CFO - Addex Pharma   Entering into a joint venture/licensing agreement as a method of growth Maximising the revenue through growth by retaining control of the product The types of investors who prefer a continuing revenue stream (as opposed to a lump sum) Are licensing agreements getting too complex (and thus too expensive)? Minimising the added risk of not selling   Merging of equal (or near equals) as a method of growth How the potential for a merger arises and how to follow it through Whether to actively seek a potential ‘equal partner’ The degree to which the risk is minimised through merging Ensuring the shareholders benefit in a merger How to senior management, head office location etc. Barry Riley, ex-CFO - Protherics
3.20pm	Afternoon Tea
3.40pm	Financing the deal: how investors in Pharma and Biotech view M&A as a long-term investment strategy Why invest in Pharma/Biotech – the overall return necessary The types of deals investors are generally looking for and when they might be persuaded to step “outside the box” The checklist approach: what boxes need to be ticked before funding can be arranged? Assessing the management capabilities of the acquiring company Measuring the acquisition risk The importance of communication throughout the acquisition process The degree to which you need to understand the science when funding the acquisition How much of an advisor (tax, legal etc.)? do you need to be (as well as getting the money Is stapled financing appropriate for Pharma/Biotech M&A deals or are the deals too complicated for an “off the peg” solution The advantages of the high yield loan for the high-risk investors Are syndicated loans preferable to single investor deals? How much can you trust the due diligence of the acquiring company and how much should you do yourself How much the investors’ decisions are influenced by the past and how much by future business plans Have hedge funds and their abundance of cash made the acquisition process easier? Brian Hargreaves, 3i Chris Hollowood, Apposite Capital Robin Wright, BioScience Managers
4.55pm	Closing remarks from the chair and close of conference
5.00pm	Networking cocktail party

Outstanding Speaker Panel

Simon Sturge, Chief Executive Officer, Vernalis

Simon Sturge was appointed to the Board as Chief Executive Officer in April 2003. He has more than 20 years’ experience in the pharmaceutical industry. After graduating in biology from Sussex University in 1980 Mr Sturge became Product Manager of Napp Laboratories, Head of Sales and Marketing at Portex and Business Development Manager at Astra Pharmaceuticals. He joined Celltech in 1988 and was appointed Chief Executive of Celltech Biologics plc (now Lonza Biologics plc) in 1995 before joining RiboTargets Holdings plc as Chief Executive. He founded RiboTargest in July 1997 when it was spun out from the Medical Research Council’s Laboratory of Molecular Biology with a £7 million venture capital investment.

Tim Dyer, Chief Financial Officer & Co-Founder, Addex Pharmaceuticals

Mr. Dyer is a UK Chartered Accountant who has more than 10 years of experience with PricewaterhouseCoopers (PwC) in the UK, Eastern Europe and Switzerland. His close relationships with multiple companies in his role as advisor afforded him broad and detailed experiences in finance, tax and corporate finance. He was a member of PwC’s start-up/private equity business development group, where he contributed to PwC’s service delivery to a number of start-up companies. Many of his clients were life science companies. He was a member of PwC’s International Financial Reporting Standards (IFRS) technical group and was involved in a number of client-related IFRS implementation projects. Mr. Dyer also has a Degree in Biochemistry and Pharmacology.

Onno van de Stolpe,  Chief Executive Officer, Galapagos

Mr. Van de Stolpe founded Galapagos in 1999 while he was Managing Director Genomics at Introgene (now Crucell). Prior to joining Introgene in 1998, he was Managing Director of Molecular Probes Europe. He established this European headquarters after joining Molecular Probes in the US. Previously, he worked for the Netherlands Foreign Investment Agency in California, where he was responsible for recruiting biotech and medical device companies to locate in the Netherlands. Mr. Van de Stolpe started his career as Manager Business Development at MOGEN in Leiden. He received a MSc degree from the Agricultural University in Wageningen.

Robin Wright, Head of Corporate Advisory, BioScience Managers Ltd

Robin Wright joined BML in 2005 as Head of Corporate Advisory Services. Prior to joining BML, Mr Wright held senior corporate finance positions at BZW, Citibank, Salomon Smith Barney and the Pan European Food Fund. At Citibank, Mr Wright was Head of Chemicals & Pharmaceuticals M&A, focusing on acquisitions and disposals for major chemicals and pharmaceuticals clients on a global basis. As Managing Director Corporate Finance at the Pan European Food Fund, he was responsible for the acquisition and financing of the Fund’s investment company portfolio, and the post-investment monitoring and management of those companies.  Mr Wright has completed over 100 M&A and financing transactions in over 30 countries for clients in Europe, the USA and Asia, including transactions from £1 million to £6 billion. In over 60 of these transactions he was the lead director.  Mr Wright received a BA from Oxford University (1983-1986) in Chemistry. He is a Chartered Accountant, having qualified with Ernst & Young (1987-1990) before joining BZW.

Dr. Michael Lutz, CEO, Epidauros (Now part of Clinical Data)

Dr. Michael Lutz was appointed Chief Executive Officer of Epidauros in April 2006. Michael brings to Epidauros a broad experience in the fields of biotech and pharma industry from working with several industry-leading companies in senior management positions. In these roles Michael primarily focused on the commercial and strategic aspects of drug discovery and development.
Most recently, he was Chief Executive Officer at SuNyx GmbH, where he managed the successful sale of the Bioanalytics Business to QIAGEN. Before that he worked at Evotec AG, reaching the position of Chief Business Officer in their Discovery Programs Division. In addition, Michael worked with Novartis Pharma AG, as an integral part of the company’s Global Marketing and Strategic Planning.  Michael studied chemistry and biochemistry at the Universities of Konstanz (Germany) and Grenoble (France). He holds a Ph.D. degree in Bio-organic chemistry from the ETH Zürich (Switzerland).

Brian Hargreaves, Sector Partner, 3i

Brian is 3i’s sector partner for healthcare. He has over 20 years’ international experience in the pharmaceutical industry, with several commercial roles at SmithKline, Mundipharma, Wellcome and Astra Hässle and has been involved in the development of major brands such as Zovirax and Nexium. Brian is a PhD pharmacist, a board member of several European businesses and a member of numerous professional bodies including the Royal Pharmaceutical Society.

Ken Powell – CEO, Arrow Therapeutics (Now part of AstraZeneca)

With over 30 years’ experience in the pharmaceutical industry and academia in both the US and UK, Ken’s previous posts have included Head of Antiviral Research and Head of Biology at the Wellcome Foundation Ltd.
He was Professor of Virology and Cell Biology at the Wolfson Institute for Biomedical Research (UCL) where he was also deputy director from 1996 to 2000. During his time at WIBR Ken set up three other biotechnology companies (including Inpharmatica and Ark Therapeutics) in addition to Arrow Therapeutics. Ken has been Arrow's CEO since 1998 (full time since 2000).

Tim Wright, Chief Executive Officer, Maelor

With over 15 years’ experience in the pharmaceutical industry, Tim has held senior commercial positions at Pfizer and SmithKline Beecham both domestically and internationally. His most recent roles were with Elan where he was general manager for Ireland and vice president, international marketing. During his time at Elan, Tim was instrumental in the establishment, significant growth and ultimate successful divestment of their European business.

Barry Riley, ex-CFO, Protherics

Barry Riley, 58, joined Proteus International PLC in 1995 as Finance Director, and was instrumental in its merger with Therapeutic Antibodies Inc to create Protherics PLC in 1999. Barry has overseen a number of M&A and capital market transactions including the £38 million fundraising announced in December 2006 and has helped provide the Company with a solid platform for growth.

Dr Chris Hollowood, Apposite Capital

Chris joined Apposite in February 2007. Chris attained his first degree in Natural Sciences, specialising in Chemistry, and a PhD in Organic Chemistry, both from Cambridge University. Chris trained as a fund manager during his time with Neptune Investment Management, before moving into Healthcare focused venture capital and corporate advisory at Bioscience Managers.

Jim Phillips, ex-CEO, Talisker Pharma now part of EUSA Pharma

Dr Jim Phillips, is a Medical Doctor and holds an MBA. Jim has previously held senior positions at both Johnson & Johnson and Novartis. He has worked in sales, medical & marketing, business development and general management with global board responsibilities. Jim led the buyout of Lifegard Technologies from J&J in 2000 and left Novartis to become interim CEO to Bone Medical Ltd, and led the successful IPO of that company in Australia in 2004.
In 2003 Jim founded and led Talisker Pharma Ltd, a specialty pharma company backed in 2005 by Endeavour Ventures. The Company was acquired by EUSA Pharma in mid-2006.  Jim has held a number of international board positions across both public & private sectors including;  West Sussex Health Authority (UK), Lifegard Technologies (UK), Diabetology Ltd (UK), Bone Medical (Australia), and CRF Inc (US).