Introduction to BioArbitrage

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What is BioArbitrage?

Who is Harrison Hayes?

Harrison Hayes and BioArbitrage

The Tools

Contact Information


What is Arbitrage?

Arbitrage involves earning a risk-free profit without the outlay of capital.

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Arbitrage takes minimal investment for the guarantee of high return

BioArbitrage Defined

In BioArbitrage, an asset is identified where the owners undervalue the asset against the market value.

A BioArbitrage fund purchases the asset and then sells it on the open market for an immediate return.

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How it Works

Economics of BioArbitrage

Market Value

Buy Line

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Buy Asset Here

Sell Asset Here

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The Tools

Contact Information


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Harrison Hayes – Who Are We?

Harrison Hayes is a strategic consulting firm to the life, chemical, and material science industries. Specific areas of expertise reside in our unique and proprietary research methodologies that support strategic and tactical decision making processes for our clients.

Harrison Hayes: Timeline

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1991:

Addison Whitney founded by Bill

Smith

1995:

Addison Whitney sold to Interpublic

Group

1998:

Bill Smith re-acquires Addison

Whitney

2001:

Innovation comes to light

2001:

Innovation practice spun-off from

Addison Whitney

2007:

Addison Whitney sold to Inventive Health; Harrison

Hayes is born

Harrison Hayes: Bill Smith

Bill Smith Bio

Founder and Managing Director of Harrison Hayes, LLC, a strategic consulting firm with an emphasis on the creation of disruptive innovation products and platforms. Prior to Harrison Hayes, Bill was the Founder and CEO of Addison Whitney, which today, is the third largest branding consultancy in the world. Bill sold Addison Whitney in 1995 to Interpublic Group (NYSE:IPG) and led their Healthcare Acquisition Team for three years which was responsible for over $3 Billion in transactions. He re-acquired Addison Whitney in 1998. Bill acted in a dual role with Addison Whitney (Chairman) and Harrison Hayes until 2007.

Education B.A., Berklee College

M.A., Colorado State University

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The Tools

Contact Information


Harrison Hayes and BioArbitrage -Initiation

A General Partner will shape the investment charter with specific criteria and areas of investment interest.

The General Partner has the Right of First Refusal to acquire the Funds portfolio of assets.

In the event of non-acquisition, the General Partner maintains the opportunity of financial gain from the asset’s exit strategy.

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Harrison Hayes and BioArbitrage -The Option

There is typically a designated Managing Director of the Fund.

The Managing Director and Owner of the identified asset will agree on appropriate acquisition value.

The Managing Director will perform its PIPV proprietary analysis to determine that the acquisition price is less than market value.

The Fund will exercise the option to purchase the asset within a time period of 12 to 18 months.

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Harrison Hayes and BioArbitrage -The Auction

The Managing Director will market the asset in a controlled auction.

Managing Director and asset’s Owner will determine the appropriate strike price.

The asset will be auctioned to buyers who are willing to pay more than the agreed strike price.

The fund pays the owner the agreed Strike Price and retains the differential.

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Harrison Hayes and BioArbitrage -Terms

A General Partner will invest an previously agreed upon amount.

Managing Director to receive a 2.5% Annual Management Fee.

Managing Director to receive 20% of the “carry”.

Fund will be for a term of seven (7) years.

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Harrison Hayes and BioArbitrage -Why Invest?

The Fund is a key piece in building an innovation pipeline.

The Fund has the ability to deliver novel technologies and intellectual property unlike traditional methods.

This Fund will provide exposure to global investments “off the grid”.

Creates selective investments at reasonable valuations.

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The Tools

Contact Information


Tools for Success: Technology Scouting Technology Sourcing includes the identification of technology developments and the facilitation of the sourcing of technology.

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Technology Intelligence

Technology Scouting

Technology Management

Identification, assessment and usage of information on technological developments Acquisition, development,

storage, usage and selling of technological knowledge

Building and using a network of experts for competitive advantage

Scouts identify and assess new technologies Scouts facilitate the sourcing of

technology

Provisioning of Technology Intelligence to facilitate the Technology Management

Tools for Success: Technology Scouting

Technology Scouting Process consists of five Technology Intelligence steps plus the step of Technology Sourcing.

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Definition of search

areas

Selection of information sources and methods to

employ

Collection of data

Filtering, analyzing,

interpreting of data

Evaluation

and decision making

Usage of information

and sourcing of technology


Fuzzy-front-end of Innovation

Product specification and

development

Prototype validation and

testing Market Launch

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Innovation Management

Technology Sourcing supports the external sourcing of technology and the product specification and development.


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External Technology Sourcing

Storage, Internal generation and usage of

technological knowledge

Technology selling or licensing

Technology Management

Technology Sourcing supports the external sourcing of technology and the product specification and development.


Factors Management

Areas Scouting Success Factors

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Defined Process

Functional interweavement

Formalized connection to R&D

Formulized connection to Marketing

Methodological interweavement

Boundary spanner capabilities

Network Size

Technological competence

Internal Network

Incentive System

IT-Support Tools

Balanced scout portfolio

Role Differentiation

Organizational

Characteristics

Characteristics of the scouts

Management of Scouting Network

Stimulation of Innovation

Facilitation of Technology

Scouting

Input for R&D projects

Triggering of new R&D projects

Triggering of new business field

Help in assessment of technology

Contact to relevant sources

Sourcing needs identified

Support in acquisition of technology

Successful acquisition of technology

Framework for Empirical Research: PLS –path analysis will be used to analyze the success factors of technology scouting and how to organize it best.

Project Planning: PLS-path analysis and in-depth case studies will be used to study organization and success factors of technology scouting.

Quantitative Interviews/Case

Studies

Qualitative Interviews

Writing of Dissertation

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Model Building

Model Valuation

In depth interviews with 10 multinational companies

Modeling a framework for research on success factors of technology scouting

Build on the Hypothesis of the framework – 50 qualitative Interviews are conducted.

In depth case studies will be conducted for six companies.

Based on the qualitative data, partial least-square path analysis is used to validate the hypothesis

The case studies are analyzed to gain knowledge of best practices

The dissertation will discuss technology scouting as of a method of technology intelligence and technology management


Motivation and Research Question: Further research on Technology Scouting is needed to identify success factors and to give recommendation on how to organize it.

Motivation

Research Gap

Research Questions

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Increase in technology complexity

Globalization of R&D

Shorter product life cycles

Increasing volatility of markets

No sufficient research on ….

…success factors and

…organization of technology scouting and

...interaction with other function of the organization

What are the aims of Technology Scouting?

What are important success factors of Technology Scouting?

How should Technology Scouting be interweaved within the company?

What organizational forms of Technology Scouting have proven to be effective?


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Tools for Success: Transforium™

The Transforium™ database is proprietary and unique to Harrison Hayes. The Transforium™ contains over 3,000,000 in-licensing, out-licensing, and transactional opportunities. Transforium™ provides our clients with an additional resource of “off the grid” opportunities.

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Tools for Success: PIPV™

Our Proprietary Intellectual Property Valuation (PIPV™) service utilizes a proven methodology specifically designed to:

Identify promising compounds.

Provide important market and competitive analysis.

Assess patents and their legal defensibility.

Estimate the likelihood that a specific compound will gain FDA approval.

Perform valuations on individual compounds or entire pipelines.

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Tools for Success: PIPV™ -Commercial Analysis

Harrison Hayes provides independent, third party research designed to maximize the value of identified intellectual property. Harrison Hayes can identify the compounds and targets with the greatest potential for commercial success. Our team members combine expertise from both the scientific and commercial realms of the life sciences industry.

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Tools for Success: PIPV™ -Financial Analysis

Properly valuing assets is paramount to the Fund’s success. Harrison Hayes possesses the valuation experience and domain expertise necessary to accurately assess the value of your products or technologies.

Identify market comparables

Perform quantitative analysis

Assist in development of pro forma financial statements

Calculate "burn rate" and other financial projections

Develop schedules and timelines for product development

Estimate likelihood of milestone success

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Tools for Success: PIPV™ -Legal Analysis

Harrison Hayes can evaluate the legal status of your identified intellectual property.

Investigate all relevant patent initiatives

Assess legal defensibility

Determine overall strength and scope of intellectual property rights

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Tools for Success: PIPV™ -Feasibility Analysis

Harrison Hayes will render an opinion on the feasibility of specific opportunities.

Assess experience and track record of management team

Evaluate development progress and timelines

Perform competitive and substitute analysis

Analyze potential exit strategies

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The Tools

Contact Information

BioArbitrage

www.harrisonhayes.com

Phone: 704.906.3402

Email: [email protected]

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mailto:[email protected]

Introduction to BioArbitrage

Documents

Transcript of Introduction to BioArbitrage