Panel: Anatomy of a USD 200 million option deal
A rare opportunity to examine the details of a landmark deal by questioning partners on both sides of the negotiating table presents itself at BIO-Europe 2009 during a panel discussion Monday, November 2 at 1:00 pm.
Representatives of Novartis Venture Funds and Avila Therapeutics will participate in the panel session entitled “Option Deals: Fad or Long Term Trend?”
“This deal is valued at USD 200 million, that’s true,” said Katrine Bosley, CEO at Avila, “but remember much of this revenue is tied to milestones for the project, so it is not like we have that money in the bank!”
In July, 2009, Avila and Novartis entered into an option agreement on Avila’s advancement of a novel covalent drug program that included upfront and milestones payments to Avila, as well as an equity investment.
The Managing Director for Novartis Venture Funds, Henry Skinner, is now a member of the Board at Avila and will join Bosley in the panel discussion.
Glen Giovannetti, the Global Biotechnology Leader for Ernst & Young will moderate the discussion that also includes panelist Nigel Clark, VP for Business Development at Vernalis Ltd.
The Novartis deal represents a third program moving forward from the Avila platform for covalent drugs that offer the potential to treat many serious diseases through a novel mechanism called protein silencing. See the related story in partneringNEWS™, “Exquisitely targeted, compelling chemistry”.
“I am sure there is enough data for people to say there is a trend for option deals in the industry,” Bosley told partneringNEWS. “But in my experience the best deals always take into account the specific interests of the respective partners.”
“In our option deal with Novartis, there were terms that made good sense for Avila and we found the right terms that made sense for Novartis,” she said.
“Apparently it is not an easy period to be raising capital,” she said. “We were fortunate to have a high quality of investors in our Series A financing (USD 21 million) who remain very supportive. As we approached the Series B round earlier this year it became exciting to find Novartis Venture saw the potential of the Avila’s platform and wanted to discuss a project.”
The Novartis vote of confidence help Avila close a Series B round of USD 30 million that included Abingworth, Advent Venture Partners, Atlas Venture and Polaris Venture Partners.
“Capital wants to be where there is a lot of upside potential,” said Bosley.
There is a fertile field for future option deals, according to Bosley, may well be in chemistry.
“The spotlight is turning back to medicinal chemistry, which at the end of the day remains the backbone of the pharma industry,” she said. “In recent years there has been a marked resurgence of small molecule chemistry. It is great to see this new and innovative work coming from young companies fueling this re-emergence.”
“I think it is an important trend and big pharmaceuticals are open to the developments in this space, which is essential for encouraging the creation of these young companies and sustaining the innovation.”
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