PharmaTelevision - Recent Deals Discussion: Eli Lilly/Imclone and BTG/Protherics

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Video title: Recent Deals Discussion: Eli Lilly/Imclone and BTG/Protherics

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In this programme Fintan Walton talks to Tibor Papp and Steven Renwick of PharmaVentures Consultancy. They discuss the recent deals between BTG and Protherics and Eli Lilly and ImClone.

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Acquisition of Protherics by BTG.

Fintan Walton:

Hello and welcome to PharmaVentures Business Review here live in London. On this special show we look at some deals that have been done recently. We have Tibor Papp, who Heads up the Advisory and Transactions Team at PharmaVentures. And Stephen Renwick, who is a Consultant in the Advisory and Transactions Team. Welcome to the show both of you. The two deals that we want to look at are specifically acquisitions one is the acquisition by BTG here in the UK of a relatively small biotech company called Protherics. And also the other deal we want to look at is the Lilly deal and their acquisition of ImClone in the United States. So Tibor, I just want to turn to you with regard to the BTG acquisition, BTG a relatively larger organization to Protherics tell us what's actually happened there?

Tibor Papp:

Well first of all I'd like to know that this is more like an acquisition of equals than a large company acquiring the small company, although BTG share price and the market cap is larger. The deal was 280 million pounds offered for Protherics, at the time of the announcement the Protherics share price was around 40 pounds and the deal offered the investors 60 pounds this around 50% premium we have to know it was already on a very depressed Protherics share price which has been in declining the past three-years, on the other hand the BTG share price has appreciated, appreciated significantly and they back up some good clinical data in the second and third quarter, so it was right situation for BTG to make this acquisition.

Fintan Walton:

Right. You talked about the relative size, we talked about the relative size but obviously we could talk about the size of the company but also the share price it's really important that the share price plays obviously an important role when you've got two publically quoted companies attempting to get together, but beyond the size issues you said this is a as a good fit, why it is a good fit?

Tibor Papp:

Well I believe it is a good fit both strategically as well as operationally. I mean both of this companies are in the business of developing products for the niche markets the specialist markets in that combined companies will would generate products and market products in neurology, critical care and oncology, there is an alignment in their pipeline although admitted the BTG only has one program in oncology in preclinical but they have the definite intention in increasing their presence there. And just considering the products of Protherics they have two marketed products CroFab and DigiFab these product generated more than $30 million in royalty revenue to Protherics last year, we need to consider that BTG on the other hand has benefits which is a hemophilia product generating about again $30 million for them last year but that is facing a patent expiry in 2011. So just looking at that it's a good fit for BTG, it makes a lot of sense for BTG's investors, for Protherics well it is questionable know that the share price of BTG has declined it's a question of how much value it can generate from Protherics investors.

Fintan Walton:

Right.

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Stephen Renwick

Consultant

Tibor Papp is a senior strategy advisor to leading companies, he has 16 years of experience in the healthcare/life sciences industry in corporate strategy, investment appraisal, portfolio development, business transformation, licensing/M&A deal making, marketing strategy, and risk management. He has advised health care and private equity companies about acquisition and transaction strategies in pharmaceuticals, biotechnology, medical devices, drug delivery systems and medical supplies globally. Currently, he is Head of Consultancy at PharmaVentures and focuses on commercialization strategies, product/technology licensing, mergers & acquisition, divestments and alliances. Dr Papp is also an experienced surgeon and has a PhD from the University of Aberdeen and an MBA from the University of Oxford. Stephen is a consultant at PharmaVentures. He joined the company in September 2005 and until recently he was the manager of the Strategic Intelligence department responsible for the development and production of PharmaDeals. In his work with the transactions group he has built up experience in company screening and relationship building for licensing and M&A transactions. Recently he has worked closely with the Licensing Executive Society on the execution of the LES BioPharmaceutical Royalty Rates and Deal Terms Survey. Stephen holds a PhD in genetics from University College London and an honours degree in biochemistry from University of Dundee.

PharmaVentures

PharmaVentures Consultancy is a leading specialist healthcare business advisory group assisting corporations in all aspects of deal transactions, from strategy formulations to implementation. They occupy a special position among advisors because of their strong analytical capabilities, proprietary deal making database and associated information assets, expertise in strategy formulation and extensive experience in deal transactions. They are proven experts in deals and alliances and have worked with over a 1000 companies from 38 countries worldwide.