bhc 4:3 template 2010 june 2011page 1 bhc 4:3 template 2010 june 2011page 1 wayne leech head of cid...
TRANSCRIPT
• BHC 4:3 Template 2010 • June 2011Page 1 • BHC 4:3 Template 2010 • June 2011Page 1
Wayne LeechHead of CID ANZ
Centre for Innovation and Development
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Topics Background
Animal Health Industry
Bomac
Bayer
The Acquisition Process
The Integration
Where to from here
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Bomac – NZ Animal Health Company
Consumed by
Bayer – German MNE
And survived!!
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Bomac Private NZ
Bayer German Corporate
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Bomac – No 1 in NZ, 2 in AU, 70 export markets300 staff, fully integratedManufacturing, S&M, R&D, AdminNo cashHeavily courted, PE, PF, TSBayer persistency became attractive
Ok let process begin…..
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$20B
Twist existing compounds
FAP
CAP
Regulatory Environment
Business Science interface
Create value in all ways
Animal Health Market
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Why Bomac – •Fast, decisive, flat Org•Innovative, creative, connected •Track Record, growth achieved (products and sales)•Full service•140 patents•Swot pioneer and improve, no copies•Very close to market, have to be
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Portfolio Approach•Solution provider
• Pregnancy• Anthelmintic• Wounds
R&D Approach•Target animals•Mice models•R - Universities•D - Internal
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Auckland University ProjectsBlood Milk BarrierConception ratesCell delivery
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Revenue58,000,000,000 (NZ 194,000,000,000)
BHC 27,700,000,000
(Fonterra 19,000,000,000)
AH 1,900,000,000
R&D 5,100,000,000
People 118,000
Scientists 12,000
Process oriented
Directives, Circulars, Guidelines, SOP’s
Accurate, precise, measured, perfect
Major decisions and strategy from far above
Ruthless, financial drivers for output
Bayer – Science for a Better Life
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CID
PS M&S
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Design parameters for NME
incremental change, no commercial value
step change, regulatory barriers
Twisted generics, milk life from old NME
gap left by poor LCM or refining API’s
But they are Germans
Own TLA language
Punctual, want in writing, no glam, deliver on promises
Time crucial, accurate, clean shoes, 1 month notice for appt
Predictable, when you know how to predict!
Bayer – Science for a Better Life
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The Acquisition Process
•Courting•Dating•Relationship building•Key Decision Point•Information Memorandum•Offers•DD•Binding Offer•Completion, settled 6 Jan 2011
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The Acquisition Process
Bayer - delighted with speed and efficiency of a fast close
Ex Bomac / MacQ - longest, slowest, tedious, most inefficient process ever!
Welcome to German Corporate world!
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Integration time!
Press releases, legal, financial, restructuring in backgroundStaff securedUpgrades announcedIntegration process laid out6 months to reach one face to customer12 months for Bomac to disappearFew staff lost, either by plan or attritionSales substantially maintained
Did the zipper jam?
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Of course!!
Remember the different organisational strengths
Remember the corporate cultural differences
Remember the country cultural differences
Remember the time zone difference
Remember the operational standards differences
But miraculously it is coming together
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M&S now operating like a Bomac team (dominant)PS heavily corporatized, GMP SOP’s Global Compliance
CID has maintained its autonomy while capturing a doubling of budgetmore new products to more countries, fasterwe are in a hurry to get products to marketbut not reckless either as we/market always insist on good Science
Mutual influence has been very healthy for CID
Infrastructure, approach, centring concepts
Global support on tap not on top!
CID ANZ firmly established as only 3rd Bayer R&D Hub
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• Is there a time to hand over, yes
• Market driven science is all that matters
• Get your project in the strategic plan of the potential acquirer
• It will take forever, include incubation time – don’t rush it or you will chase them away
• Not invented here is very strong in Global R&D groups
• How big a potential do you really need to chase? Is global domination of a little market as good/better than chasing a star without your feet on the ground.
• Bayer moved smartly to understand how other parts of the market work and have listened, sometime by insistence
• You can shift the momentum, bit by bit.
The Lessons
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Was it all worth it?
•Bomac had out grown its infrastructure and was starting to creak
•R&D and Regulatory costs were ever increasing
•Market entry costs becoming higher
•Hard for privately funded coy to grow through the next level
•Merging 2 diverse cultures requires the presupposition of mutual respect
•Integration needs time and resources and cannot be rushed where significant thought process changes are needed
•Good science is stronger than the owner
The Learnings
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Thank you!