COMPETITIVE INTELLIGENCE WORKSHOP

CTN – CISTI - FPTT

February 14, 2001

Competitive Intelligence in Life Sciences Sector

A Case Study – ParaTecH Therapeutics Inc.

Godfrey Marchand; Manager, Business & Administration, IBS

CONTENT

Background on the case

Process we followed

False starts and lessons learned

Impact of CI on planning

Information sources

OBJECTIVES (What I hope you get from the talk)

Multi-dimensional nature of CI

Impact of CI on strategic and operational planning

The need to identify Decision Makers (drivers)

The need for analysis – segmentation

Some tips on information sources

Keep it up to date

BACKGROUND

(1993 – 1996)

A tissue engineering project that had been terminated

Continued as a ‘skunk works’ project for 3 years

Exploiting the bone generating properties of PTH

Research and technical successes

No business evaluation

BACKGROUND- Osteoporosis the disease

Gradual deterioration of bone as we age

Bone is continually ‘remodeling’

Two cell types Osteoclast/Osteoblast

Aging and menopause - imbalance

More bone resorption than bone formation

Asymptomatic ‘silent disease’

BACKGROUND– Current Treatment

All current treatments are Anti-resorptive

Work by slowing down the bone remodeling process

They are effective Anti-resorptive,… however

They can not restore lost bone

Fewer than 10% receive any treatment at all

Fewer than 1% comply sufficiently to be effective

BACKGROUND: Statistics:

One of every two women will suffer a Fracture

One of every eight men will suffer a fracture

100 million to 200 million at risk

Hip fracture alone costs $14 Billion/year in US

Costs will increase to $130 billion by 2050

World Therapy market is $4 Billion/year

Market will grow at 15% compounded annually

BUSINESS EVALUATION - 1997

No effective product/Large unmet need

Bisphosphonate success

All major pharma companies interested in disease

More than 140 products in the pipeline

Very few products true anabolics

We planned a strategy to license the product

PROCESS –LICENSING

Established criteria for the prospective partner

We researched the 10 to 15 large Pharmas based on criteria

CI consisted of:

Purchased information, Edgar,

ReCap, Scientific Literature

Company publications Market information

Patent data bases Some contacts

Selected 5 target companies

PROCESS –LICENSING

Licensing package:

Described technology, research results

We determined our product strengths

Presented our strong patent position

Presented the market study

Tailored presentation to each company

We had studied their portfolio

PROCESS –LICENSING

Had completed a valuation different measures

Had received the mandate from IBS management

Initial contact, non-confidence

Visited each Company under confidentiality

LICENSING PROCESS:

From Feb 1997 to Jun 1998

Large Pharma Companies:

AHP, HMR, Astra, RPR, Roche, Sanofi

Small to mid Pharma:

Ares Serono, ICN Pharma, Debio

LICENSING PROCESS - CI Lacking

Product related:Concern with injectibles

The PTH Uncertainty

Perception of the stage of our product

Manufacturing process unknown

Unknown stability

Weak Product differentiation/advantage

The need to repeat everything we had done

The pharmacoeconomics Patents were still ‘pending’

LICENSING PROCESS - CI Issues

Industry knowledge

Big pharma dynamics/Who to talk to

Identifying the champion in each company

The company investment approval processes

We knew little about the regulatory process

LICENSING PROCESS - CI Issues

Other Issues

Industry Consolidations

Perceived high investment requirement

High current investment in the category

Regulatory barrier

Timing issues

IMPACT ON PLANS

We recognized that we could not take the next steps easily within NRC

For various reasons the Institute wanted to spin-off the technology

Recognized we did not have the in-house expertise

Identified a partner who has expertise synergistic to NRCs

We addressed each Issue from our licensing experience.

LICENSING PROCESS - CI Lacking

Product related:Concern with injectibles

The PTH Uncertainty

Perception of the stage of our product

Manufacturing process unknown

Unknown stability

Weak Product differentiation/advantage

The need to repeat everything we had done

The pharmacoeconomics Patents were still ‘pending’

LICENSING PROCESS - CI Issues

Industry knowledge

Big pharma dynamics/Who to talk to

Identifying the champion in each company

The company investment approval processes

We knew little about the regulatory process

LICENSING PROCESS - CI Issues

Other Issues

Industry Consolidations

Perceived high investment requirement

High current investment in the category

Regulatory barrier

Timing issues

Competitive pipeline

Antiresorptives:Many antiresorptive products being launchedMost from same class as current

AnabolicFluoride - no significant entriesIGF - 6 projects in the pipeline

Merck is the most significant, Phase II

Several genomics based projectsAll in research stage but several will likely be successful

PTH

Competitive pipeline

PTH

Eli Lilly 1-34 Phase III?

NPS-Allelix Starting Phase III

Aventis, Rhone Poulenc

Takeda, Suntory, Korea Green Cross

Most companies have a PTH program now

OUR PRODUCT POSITIONING

We see a clear distinction between treatment & prevention

We will be positioned in the treatment market

We will be the second or third product in the market

Strategy will be the next generation, safer, more effective product

Our research indicates that to be a significant feature for this product with the clinician

A next generation ‘oral’ product will target both prevention and treatment

CI SOURCES:

Market research web sources:

Edgar Strategis ReCap

Biospace SEDAR NIH

CISTI Medline Yahoo Finance

Biospace-Canada Derwent IBM

USPTO MicroPatent Alert Each Co www

AUTM Associations Generally

Personal News Sites

CI SOURCES:

The real sources (People):

Your network, Conferences Industry Associations

Prof. Assoc Lawyer Accountant

Peers Consultant Ven Caps

Entepreneurs Your management Experts

Community leaders IRAP TT experts

Your network is Key to your success; Get involved

CI SOURCES: Other

Directories

Financial pages

Personal news pages

Conference audit pages

Scientific Journals