Session20-Sirtris

1、SIRTRIS PHARMACEUTICALS: LIVING HEALTHIER, LONGERJohn Burr Ph.D.Warm-up Question 11. According to , which of the following countries has the highest wine consumption per capita in 2008?A.Switzerland B.United StatesC.SpainD. United KingdomWarm-up Question 11. According to www.win

2、, which of the following countries has the highest wine consumption per capita in 2008?A.Switzerland B.United StatesC.SpainD. United KingdomWarm-up Question 22. Borders Bookstore derived its name from: A. The first store was built in El Paso, Texas, just two miles from the Mexican bord

3、er.B. Tom and Louis Borders, brothers from Ann Arbor, MichiganC. Borders was originally a place to order books, not buy them.hence the name Book OrdersD. Nothing in particular; the founders just thought it sounded interestingWarm-up Question 22. Borders Bookstore derived its name from: A. The first

4、store was built in El Paso, Texas, just two miles from the Mexican border.B. Tom and Louis Borders, brothers from Ann Arbor, MichiganC. Borders was originally a place to order books, not buy them.hence the name Book OrdersD. Nothing in particular; the founders just thought it sounded interestingWarm

5、-up Question 33. The common, but fallacious story behind the creation of eBay is that Pierre Omidyars wife had a large PEZ candy dispenser collection, and that he created eBay in 1995 to help her acquire even more containers. Urban myth? Maybe so, but what was the domain name that Pierre originally

6、wanted to use? A. CB. SC. BuyItHD. EchoBWarm-up Question 33. The common, but fallacious story behind the creation of eBay is that Pierre Omidyars wife had a large PEZ candy dispenser collection, and that he created eBay in 1995 to help her acquire even more containers. Urban myth? Maybe so, but what

7、 was the domain name that Pierre originally wanted to use? A. CB. SC. BuyItHD. EchoBWarm-up Question 44. What popular clothing company took its name from a derogatory term often applied to Central American countries? A. Coconut CountryB. Sugar ShackC. Mango MansionD. Banana RepublicWarm-up Question

8、44. What popular clothing company took its name from a derogatory term often applied to Central American countries? A. Coconut CountryB. Sugar ShackC. Mango MansionD. Banana RepublicCBS News 60 minutes:http:/ Study Questions1. Describe the FDA approval process of a new drug application.2. What are t

9、he three major decisions facing the company at the time of the case?3. At the time Westphal joined Sirtris, what is your assessment of the odds that the company will ever generate substantial revenues? If you were Westphal, would you have left Polaris for Sirtris?4. Should Sirtris launch SRT501 nutr

10、aceutical business? Why or why not? 5. Should Sirtris do the deal with the pharmaceutical company? Why or why not? If you recommend a deal, which equity stake (20% or 51%) would you prefer?Sirtris Study Question 11. Describe the FDA approval process of a new drug application.Sirtris Study Question 4

11、4. Should Sirtris launch SRT501 nutraceutical business? Why or why not? Fact:Nearly two-thirds of the American population takes at least one type of nutraceutical health product. Fact: The use of nutraceuticals, as an attempt to accomplish desirable therapeutic outcomes with reduced side effects, as

12、 compared with other therapeutic agents, has met with great monetary success. Sirtris Study Question 5Should Sirtris do the deal with the pharmaceutical company? Why or why not? If you recommend a deal, which equity stake (20% or 51%) would you prefer?Update Sirtris went public at $10/share in May 2

13、007, raising $60 million. In April 2008, agreed to be acquired by GSK in a $720 million deal (purchased at $22.50/share when it was trading at $12/share, an 80% premium). Westphal stayed on to lead merger integration effort. “This is likely to be the most important thing I do in my life.” His stock

14、options and restricted stock vested out to 2011. A small number of scientists left to launch other start-ups. Sirtris remained a standalone division inside GSK.GSK Abnormal Returns around Acquisition DateGSK Abnormal Returns around Acquisition DateIN SOME BUSINESS MODELS: CREATING VALUE IS ABOUT INC

15、REASING EXPECTED VALUE, NOT GENERATING NEAR-TERM REVENUE AND PROFITSLesson 1Biotech Whats it worth!Step-downs in risk and fundingJuly 2004Tatar and Sinclair report resveratrol extends life of roundwormsAugust 2004Round A -$5 millionOctober 2004Round A1 - $13 millionMarch 2005Sinclair started getting

16、 data that showed resveratrol extends lifespan in a mammalRound B - $27 millionApril 2006Confirmatory results that high doses of resveratrol affect obese miceRound C - $22 million Feb 2007Reserveratrol increased stamina of mice two-foldRound C1 - $35.9 million0.01%Time zero payoff distribution99.99%

17、E(Exit Value) = .9999 * Lose All + .0001 * Make BillionsLose AllMake BillionsTime zero payoff distribution5%95%E(Exit Value) = .95 * Lose All + .05 * Make BillionsLose AllMake BillionsAfter Christoph joins & science advancesQ4: Entering Nutraceuticals business5%95%E(Exit Value) = .95 * DCF Nutra

18、ceuticals + .05 * Make Billions?Lose AllMake Billions95%?Q5: Adding pharmaceutical deal5%95%E(Exit Value) = ? * Lose All + ? * (Make Billions / 2)Lose AllMake Billions?UNDERSTANDING MOTIVES FOR DIVERSIFICATIONLesson 2CROSS-SELLING BENEFITSECONOMIES OF SCOPEIn what businesses?INTERNAL MARKETSDIVERSIF

19、YRISKDiversify Risk Generally, not a good reason Corporate investors can diversify more efficiently themselves Makes sense if Corporation can diversify risk better than external market In “new” markets, there may not be available risk hedging alternatives for investors, so corporations have to diver

20、sify for them.IMPORTANT TO THINK ABOUT THE INCENTIVE STRUCTURES & PROS AND CONS OF STRATEGIC PARTNERSHIPS, ESPECIALLY FROM THE PERSPECTIVE OF THE SMALLER PARTNERLesson 3Big PharmaTable: Number of New Drugs Released by Top Ten Pharmaceutical Companies, listed in order of market capitalization, fr

21、om 1998 to 2002Pharmaceutical companyNew DrugsPfizer5Johnson & Johnson0Merck7GlaxoSmithKline6Novartis8Amgen0Eli Lilly & Co.1AstraZeneca2Abbot Laboratories3Wyeth4Source: Bryan Bergeron & Paul Chan, BIOTECH INDUSTRY: A GLOBAL, ECONOMIC, AND FINANCING OVERVIEW 58 (2004).Small Biotech Source of Capital Validation to partners, investors Experienced teams to go through the FDA approval process Tension: Different time frames under which pharmaceutical and biotech companies operate? Tensi