Nordic Life Science 1
”WE NEED TO THINK HARD ABOUT REDESIGNING 74 HEALT
HCARE BUSINESSES IN GENERAL TO ESSENTIALLY EXIST AND GROW WITHOUT THE BENEFIT OF PATENT PROTECTION.” TIM OPLER ding this enormous amount of money without actually getting to the data. The most important thing is to not listen to what the FDA tells you to do, which is to run two phase 3 studies for this new drug for autism. Instead say, “to fund this drug for autism, what I need to do is to show five patients whose lives have been radically changed. If I can do that, then I can fund this thing probably in the public markets.” Why not go to, say, Australia, where the barrier to running a study is relatively modest, and generate that data. I TF TO always encourage CEOs to focus on the lowest cost route for getting the data set that you need to actually be able to raise money. As you said, you don’t then have to constantly struggle to put together some syndicate in Europe with hundreds of companies running around with a tin cup trying to get money right now. In a way, what I like to say is that if you’re in the Valley of Death and you can’t raise money, you wrote the wrong business plan. You have to write the business plan first so you can show how you’re going to get the data set needed, at a reasonable cost, to eventually get your drug approved. The alternative to the public markets is of course M&A. There are, and there ought to be, players who are willing to buy up companies at earlier stages. What’s your view on the M&A market going forward? Will it move down the scale as we all hope? There has always been and always will be an M&A market for early stage stories that are transformational in some way. If you’re doing earlier-stage M&A, you’re essentially giving a pharmaceutical company’s R&D division access to either a technology or a drug that they don’t already have. To state the obvious, that has to be something really quite special, quite innovative, quite interesting. There’s a lot of that opportunity out there. I do expect to see more and more M&A of platform companies and new technologies. TF At Flerie, we focus a lot on platform companies for that reason. We think that there are ways that you can also strike up partnerships with big pharma to partly fund development and therefore get to that point where you’re showing that you have a business case and for a particular drug in one area, maybe it’s also a ‘pipeline in a drug type’ play. I think there are ways, but you have to be smart and really do it. Think about it early on. That’s how you move forward. Now, to change the subject to these (M&A) transactions that you are of course involved in through your work. You’ve been involved in some really impactful transactions. Are there any particular transactions in your career that really stand out? TO There were a couple of instances when I met companies where something needed to happen. I remember meeting with Howard Pien, the CEO of Chiron, many years ago. He was in a situation where Novartis was a major owner of his company, and his company had a lot going on. He had three divisions which weren’t particularly well understood. I listened to him, and he said, “My number one goal is to make sure that the science here at Chiron gets to patients and I want to make sure that my scientists have a bright future”. We advised Chiron on its sale to Novartis. It was quite a large transaction, over USD 5 billion in size. Much of the negotiation with Novartis was about preserving what Chiron had done. To their credit, the Novartis team were absolute gentlemen. They understood Howard’s priorities, and they really made sure they were achieved. I was very proud that a major biotech company was able to be absorbed by Novartis and become even more successful under them than before. TF Flerie is a Scandinavian company, a Swedish company. You as an American, with the position that you have, you can spend your time looking at anything in the world, yet you are doing a little bit of business in Scandinavia. INVESTMENT OUTLOOK // CONVERSATION