Dissecting monoclonal antibody mega-deals

Figures & data

Figure 1 Mechanism of deal terms in the Regeneron Sanofi-Aventis contract. The final value (columns on the right) is built by many components. These components do not always impact the value in the same way for licensor and licensee..

Figure 2 Rationale for value distribution.

Figure 3 Value development for Bristol-Myers Squibb, calculated with ri:val.

Figure 4 Value development for PDL BioPharma, calculated with ri:val.

Table 1 Recent mega-deals with monoclonal antibodies

Licensor	Licensee	Year	Deal value	Phase	Comment
Genmab	GlaxoSmithKline	2006	$2,059 Mio	III	Genmab receives double-digit royalties and a $357 Mio equity investment.
OncoMed	GlaxoSmithKline	2007	$1,400 Mio	Pre-IND	Deal value excludes upfront payment, but includes milestones of several projects.
PDL BioPharma	Bristol-Myers Squibb	2008	$1,155 Mio	I	Deal includes option and milestones on second product.
Regeneron	Sanofi-Aventis	2007	$1,122 Mio	Pre-IND	Deal includes projects generated over the next five years.
MorphoSys	Novartis	2007	$1,000 Mio	Pre-IND/I	$600 Mio in committed payments over the next ten years. The remaining $400 Mio are probability adjusted milestones

(Source: BioCentury, press releases).

Table 2 R&D valuation assumptions

	Phase I	Phase II	Phase III	Review	Source
Success Rates	77%	60%	81%	100%	Reichert et al.4
Costs ($ Mio, per indication)	5.2	15.9	43.1	3.5	Avance
Duration (months)	25.4	38.2	42.9	18	DiMasi et al.,2 Reichert,5

Table 3 Milestones usually keep increasing with progress of project

	Phase I	Phase II	Phase III	Review	Launch	Sum
1^st Dataset (Discovery)	1	2.2	3.3	4.4	20.7	31.5
2^nd Dataset (Preclinical)	1	1.9	3.3	5.7	26.3	38.1

The table reveals the relative amounts of milestones extracted from two datasets.

Table 4 Possible milestones for elotuzumab

Milestones	$ Mio
Upfront	22.5
Phase II	49
Phase III	73
Filing	98
Approval	260
Sales Milestones	200

Table 5 Possible milestone structure for elotuzumab

Milestones	1^st indication	2^nd indication	3^rd indication	Non-cancer	Total
Upfront	22.5				22.5
Phase II	25	15	10		50
Phase III	40	20	10		70
Filing	50	25	25		100
Approval	100	60	60	40	260
Sales Milestones	200	on aggregated sales			200
TOTAL	237.5	120	105	40	702.5

Table 6 Results for various sales scenarios, calculated with ri:val

Scenario	Value BMS	IRR BMS	Value PDL	Value share
Peak Sales	$469 Mio	25.2%	$446 Mio	51-49%
1,000/1,000/500
Peak Sales	$188 Mio	19.8%	$269 Mio	41–59%
1,000/500/500
Peak Sales	$34 Mio	15.6%	$165 Mio	17–83%
500/250/250

Reichert J, Rosensweig C, Faden L, Dewitz M. Monoclonal antibody successes in the clinic. Nat Biotechnol 2005; 23:1073 - 1078

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DiMasi J, Grabowski H. The Cost of Biopharmaceutical R&D: Is Biotech Different?. Manage Decis Econ 2007; 28:469 - 479

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Reichert J. Biopharmaceutical Approvals in the US Increase. RAJ Pharma 2004;

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