1. “Biogen Idec: Evaluating a Potential Acquisition”
Team Stratecore
Abby Kowaloff
Clay Quint
Pasquale Cirone
Reshma Singh
Victor Fok
YBPS Case Competition
November 30, 2007

2. Agenda MS Disease Overview Therapeutic Landscape
Acquisition Evaluation
Opportunity Assessment
Plan of Action
Conclusion
Pfizer Competitive Strategy in MS

3. Multiple Sclerosis: Disease Condition
Chronic inflammatory demyelinating CNS disease leading to impaired motor and sensory function
Frequency:
Most common debilitating illness in young adults
Indicence 0.5 – 1 % per 1000 people
Onset: age (median: 24 years)
350,000 – 500,000 pts US; over 1 million worldwide
Prognosis:
PPMS: often need walking assistance in 6-7 years
RRMS often maintain walking ability for years post onset
1/3 patients will work after 15 years

4. MS Therapies: Mechanisms of Action
Blood brain barrier
TYSABRI*
macrophage
B cell
Autoreactive
T cell
Lymphocyte
Lymphocyte
Secrete
antibodies
COPAXONE
AVONEX*
BETASERON
REBIF
Destroy myelin
NORMAL
myelin
BG12*
Fingolimod
Laquinmod
Cladribine
teriflunomide
Demyelination MS

5. Changing MS Therapeutic Landscape Crowded and moving towards oral therapies
Expected Date to Market and Patent Expiration
I.M.
I.V.
ORAL
S.C.
U.S. MS Drug Sales ($MM), 2006
Current Therapy
Phase III
Future landscape:
Oral Therapies
Crowded Space
Lack of clinical efficacy for BG-12
Oral therapy: better convenience
Phase II

6. Is Biogen Worth Buying? Pipeline Assessment
Phase
Preclinical/
Phase I
Discovery
Phase II
Phase III
Market
Pipeline
AVONEX
NPV: $5.0 B
TYSABRI
NPV: $236 MM
BG-12
Clinically Inferior
RITUXAN
Cancer Indication/Injectable
Daclizumab
Clinically Inferior
Avonex is sole viable profit generator
Goes off patent in 2011
CDP 323
Already licensed
Anti-
LINGO-1
Early stage; high risk
NgR-Fc

7. Pfizer Will Not Buy Biogen is Overvalued
Biogen Market Cap (2007): ~$21 B
Biogen Valuation: $5.3 B
Epidemiologic Assumptions (RMRS):
20,000 new cases/year
25,000 incidence less other forms of MS, discontinued therapy, death, etc.
Slow increase of % affected patients treated (+1%/yr)
Commercial Assumptions
Mid-range sales growth case
Valuation only includes MS portfolio (~98% of 2006 sales)
Adjusted according to year-by-year competitive landscape
Terminal growth rate (post-2015): 3% (standard)
Pfizer WTP (including premium): $7 B
Overvalued!
Small +/-: 9% (plus 3% constant)
Medium: 17%

8. Unlocking Synergies: $135 MM Pfizer/Biogen Collaboration
Pfizer strategic priorities: Compete in the MS space and expand presence in biologics
Proposal: Collaborate with Biogen on Anti-LINGO-1 or NgR-Fc
Novel mechanism to promote remyelination
Deal Structure
Milestone
Compensation/Assistance
Upfront (2007)
$20 million
R&D Assistance
$10 million
Phase I (Assumption: 2009)
$5 million
Phase II (Assumption: 2011)
Phase III (Assumption: 2012)
$50 million
Approval (Assumption: 2014)
$30 million
Royalty Agreement
65-35% Pfizer/Biogen Revenue-sharing
Other major companies have licensed all of the Phase II/III MS drugs

9. Pfizer Competitive Strategy in MS Partnerships for the Future
No short-term licensing for oral immunomodulating therapies
BG-12 not likely to gain significant market share
Focus resources on remyelinating mechanisms
Capture future MS market to pre-empt competitor licensing moves
Investigate further indications for biologics
Collaborate to develop cell-based therapies

10. Questions?

11. Additional Slides

12. Future Competitive Landscape: Oral Therapies Dominate
Biogen Anticipated Oral Drug
Market Share
Biogen Current Market Share

13. Restorative Strategies for MS
Strategy
Mechanism
Phase
Phenytoin and Flecainide
Block Sodium Channels
Clinical Trials
Antagonists Jagg-Notch
Promotes oligdodendrocyte differentiation
Animal Studies
Neural growth factors
Promote neuronal survival
Antagonitsts of Nogo2/Lingo-1
Animal studies
Progenitor Cells (MSC/OEC)
Initiate myelin repair
Early Human Trials

14. Mechanism of NgR-FC and Anti-LINGO-1