Bayer Schering Pharma: Michael Yeomans on Growth in Pharma and New Deals

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Video title: Bayer Schering Pharma: Michael Yeomans on Growth in Pharma and New Deals
Released on: August 17, 2010. © PharmaVentures Ltd
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In this episode of PharmaTelevision News Review, Fintan Walton talks with Michael Yeomans, VP Business Development & Licensing at Bayer Schering Pharma*. Filmed at BioChicago 2010 in Chicago, USA, they discuss:

• Strategy after merger and key focus areas

• Michael Yeomans' role at Bayer Schering Pharma

• Biggest growth in speciality pharma areas

• Clinical stage deals vs research stage collaborations

• Bayer Schering Pharma's competition and advantages in the venture environment

• Bayer Schering Pharma's perspective on funding difficulties in the biotech industry

• Deals in female healthcare area

• Future growth from a licensing perspective

*Information correct at time of filming. Michael Yeomans has since left Bayer Schering Pharma.
Strategy after merger and key focus areas
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at BIO International Convention. On this show I have Michael Yeomans, who is Senior Vice President of Global Business Development and Licensing at Bayer Schering Pharma , welcome to the show.
Michael Yeomans:
Thank you.
Fintan Walton:
Bayer Schering Pharma is a result of the merger several years ago now between obviously Bayer and Schering the German pharmaceutical company that changed and altered the shape of Bayer in some ways particularly obviously in the whole area of pharmaceuticals, so from that merger developed a strategy, tell us little bit about that strategy and how that then has an impact on your function within Bayer Schering Pharma ?
Michael Yeomans:
Yes, okay I will be happy to do that. So the company today Bayer Schering Pharma was formed through the merger of the bio healthcare pharmaceuticals business into Bayer Schering into Schering AG [PharmaDeals ID = 23751] of Berlin to create a combined pharma business. And of course after the merger the companies reviewed the strategy and laid out the cause for the future so the focus is clearly on the development and commercialization of specialty pharmaceutical products however still building on the base of primary care general medicine products which came mainly from the Bayer side. So today we are focused on four key areas, four therapeutic areas which are general medicine that's made up of primary care products plus cardiology products, specialty medicine including oncology, multiple sclerosis and hematology. Then we have women's healthcare which is a quite specialized business that Schering traditionally had invested in over a long period of time and the fourth piece the fourth business is diagnostic imaging also a quite specialty and specialized business derived mainly from the Schering side. So these are the four areas where the company today is investing the bulk of its research and development money and hopes to focus on in the future.
Role and functions of Michael Yeomans
Fintan Walton:
Right, so very clear defined areas but at the same time quite a broad range of and so forth, So how does that then relate to your role and obviously your role is to bring in products that fill those different pipelines so how do you organize yourselves at Bayer Schering Pharma with respect to business development and licensing?
Michael Yeomans:
Okay, alright well we have three main I would say functions or customer groups. The first important customer group is what we call the business units so these are the four entities I mentioned that run the strategic and manage strategically the portfolio of products. So from our side we support each of those four areas with dedicated licensing teams, so that's the first part. The second part is that we also support our drug discovery group by licensing in early stage technologies, early stage compounds to help improve that number one their efficiency, their innovative capacity and also the early stage pipeline and that's a special group which is let's say very highly scientifically qualified to do that. And then thirdly and not less important is that we support our regions so the commercial business in the regions to build and expand their presence in the market.
Fintan Walton:
Right, but of course the regions have their own specific needs, so it's in a way it forms a matrix of activities that you have to perform?
Michael Yeomans:
That's right. So we are working across all of these three areas and also you know managing and coordinating these because very often we are dealing of course with the same partners, same partner companies we might be talking to about an early stage collaboration something in a region somewhere and so forth.
Biggest growth would occur in speciality pharma area
Fintan Walton:
Now clearly you've mentioned the four areas and one of those area is general medicine, primary healthcare quite different to secondary healthcare or even specialty pharmaceuticals so where do we expect the biggest growth to occur within Bayer Schering Pharma is it more likely to be in the specialty pharma area or in general medicine?
Michael Yeomans:
It's most likely to be in the specialty healthcare area this is where we are investing most of the R&D money, so the new products are mainly going to be coming out of this field. Having said that our general medicine business is also growing particularly in emerging markets where this forms really the key growth driver at the moment.
Clinical stage deals vs Research stage collaborations
Fintan Walton:
Sure, and that's not unusual for number of pharmaceutical companies doing similar things, so when it comes to try to do these deals now are you focused on what's your clinical phase, I mean obviously you would like the product that's already in the market I am sure, but how you are focused in terms of clinical stage and particularly in early stage research and development?
Michael Yeomans:
Yes, okay well everybody likes to have late stage products, they come with less risk, they are closer to the market obviously, but these are hard to find and expensive. So depending on the area we are also willing to look at early clinical compounds and even back into research stage collaborations if it make sense, but this we will only do in areas where we have the internal R&D expertise.
Bayer Schering Pharma's competition and advantages in venture environment
Fintan Walton:
Sure, so when we look at the types of activities most pharmaceutical companies are involved in some of those companies have for an example venture arms they've got specific like for an example GSK have got their CEDD's and Seeds and so forth how do you how does a company like Bayer Schering Pharma compete in such an environment for products?
Michael Yeomans:
Well we think we can offer competitive deals terms but this doesn't include at the moment equity positions in these companies usually and we don't have at least not at the moment any venture capital arm that's an idea that has been thought about it may be as something for discussion again in the future.
Fintan Walton:
Right, but you don't see that necessarily as a disadvantage for Bayer?
Michael Yeomans:
We don't see it as a competitive disadvantage, in fact sometimes the smaller companies actually prefer not to have the partner taking a stake in the company I mean we are prepare to pay competitive you know upfront money milestones, royalties and so on and we think we can compete fairly on that basis.
Fintan Walton:
Yes, well what are the advantages of licensing is non-dilutive funding in a form?
Michael Yeomans:
That's right.
Bayer Schering Pharma's perspective: Funding difficulties in biotech industry
Fintan Walton:
So when we look at the current environment for doing deals, biotech companies not exactly a great boom time for them, funding is difficult, from your perspective are you getting to see the deals that you want to do and are you seeing difficulties out there amongst the biotech industry?
Michael Yeomans:
Well I think it's true and clear that the last two-years or so has been very tough not just for the biotech industry also for the economic conditions had been challenging for everybody also for us, so while it's clear on the one hand that biotech's have been very short of cash many of them down to six months or a year of cash, yes some of them have disappeared but I think the ones that had the really interesting assets and have still been able to command you know the deals that they wanted. And we haven't noticed particularly any real let's say reduction in prices and we have competed on that basis. On the other hand from our perspective we have also had to be more selective. Our company like others has also tried to preserve cash in the last couple of years so we have been even more selective and the choice of the collaborations that we have entered.
Deals in Female healthcare area
Fintan Walton:
So again one of the areas that you've emphasized is specialty pharma, a subset of that is female healthcare, so how does a company like yours do deals in that particular area, give an example of a deal that you've done recently in female healthcare.
Michael Yeomans:
Yes, well as I think I mentioned this women's health is an area where not some many of the large companies are investing anymore. It gives us a little bit of a unique and strong competitive position but on the other hand there are not so many projects out there, so we are having to go somewhat earlier back in the pipeline to look for projects on the other hand we have been successful recently to secure a deal with a company with a product in Phase III actually a small Canadian biotech company called EndoCeutics [PharmaDeals ID = 35906]and we have made a licensing arrangement with them for their new product called Vaginorm and we will take that into our development pipeline.
Future growth from Licensing perspective
Fintan Walton:
Quite interesting, So how do you see your Bayer Schering Pharma business growing in the next few years particularly from a licensing perspective, how dependent are you on in licensing for the growth of the company going forward?
Michael Yeomans:
Well we think we have a strong late stage pipeline currently, but if you look at that you will see that several of those products are in partnerships either they were discovered by us and partnered out, so Xarelto for example Factor-Xa-Inhibitor is partnered with Johnson & Johnson [PharmaDeals ID = 22148] in the United States so we have a strong partner there. Our oncology flagship product Nexavar is the result of a collaboration with Onyx [PharmaDeals ID = 14977] a US based company. And we have also in Phase III development the VEGF-Trap product for ophthalmologyAMD that's licensed and partnered with Regeneron [PharmaDeals ID = 25581] of the US.
Fintan Walton:
Yes, so you have got a good reasonable history in doing deals.
Michael Yeomans:
Yes indeed, I mean these are three major assets of ours which are all in partnerships and we are looking clearly to build on that, I mean we are on the lookout for new collaborations or products derived from collaborations, so for example last year we signed a deal with a small Norwegian based biotech company Algeta Pharmaceuticals [PharmaDeals ID = 33815] for a Phase III project called Alpharadin for treatment of metastasis in prostate cancer. And we've concluded a deal with a small biotech company called Ardea [PharmaDeals ID = 33203] for a clinical stage so called MEK-inhibitor for intervening in a new oncology pathway, so we've been actually quite active in the last two or three-years.
Fintan Walton:
Michael Yeomans, thank you very much indeed for coming on the show.
Michael Yeomans:
Okay, thank you very much.
Fintan Walton
Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Michael Yeomans
Senior Vice President
Michael Yeomans is Senior VP of Global Business Development & Licensing at Bayer Schering Pharma *. Previously Michael Yeomans had served as Senior VP, Global Business Development at Biovail Corporation and Senior VP, Global Business Development at Aventis. *Information correct at time of filming. Michael Yeomans has since left Bayer Schering Pharma.
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialisation.
Bayer Schering Pharma
Bayer Schering Pharma is one of the ten largest specialty pharmaceutical companies in the world. We market our products in more than 100 countries, and in 2009 generated sales of over " 10.4 billion. Approx. 36,300 members of staff currently work for Bayer Schering Pharma worldwide " more than 5,900 in research and development alone. We aim to improve people's quality of life with our products. To achieve this, we concentrate on the research and development of innovative drugs and novel therapeutic approaches. At the same time, we are constantly improving established products. In this context, Bayer Schering Pharma uses experience it has gained from over a century in the business. We concentrate on four business units in which we make essential contributions to medical progress.