Alright, so let's talk about Strategic Alliances and Deals in 2015. I'm going to try to give you a picture of what happened on 2015 in a number of the deals. Unlike these pictures, not all the strategical rises as hurtful even though in this picture, what is kind of interesting is that I think the bird is actually helping the rhino. Anyway, let's go through that. So, if we look at the number of deals throughout the past since 1995, and you have, again, access to all these reports, you can see that number of deals have been really increasing. Substantially. You can see, I put on the slide really the larger deals that were in billions of dollars. The largest one was actually the Pfizer- Warner-Lambert deal that happened in 2000. But there are many, many more deals that have happened since then. 2015 was a record year in the M&A sector both in the US and Europe, about eight billion, I'm sorry 208.8 billion total transaction volume including biodollars, what do biodollars mean? I think a lot of you already know this. But basically, it includes the totality of the deal if all the milestones, all the payment, were to be met. Unfortunately, that does not happen all the time, and you can see that a big chunk of the deals were really completed for US companies. So one of the questions one could ask and people ask this very often. This is another study that was done by McKenzie, if I remember correctly, where they looked at what is the impact of deals. And if you do a large deal and you are the acquirer, does it really work? Does it creat shareholder value, does it also work for the companies. And I this slide really shows that the top 20 survivors have been really thriving and have been doing really really well. So, from that perspective when people argue that Megamerger don't, I think if they are don well they work very well. If we look at the number of VC Backed companies, all including all the Bio dollars as I mentioned, you can see that in 2015 it was actually pretty big. It has been increasing substantially nicely over the past five seven years which is quite nice for the bio-tech sector. Which has been doing really well. And a number of the VCs have been very pleased with that, because this is basically means that pharma has been doing larger deals with higher upfront payments for these companies. That is also probably due to the fact that a number of companies have brought their products to later stage of development than just being very, very early stage. Okay, so now let's talk about the different types of alliances. And at the end of the day, these alliances, as you see on this graphic, have to be win-win, otherwise, what's the point? So, strategic alliances and merger and acquisitions are quite different. Very often, as I mentioned, what you are looking for in a strategic alliance Is really a joint R&D, or a joint R, joint product development, potentially joint manufacturing if you're doing pharma to pharma, joint marketing. And as well, long-term sourcing of agreement from the perspective that you really want to be in it together. I'm not going to go over informal collaborations on contractual agreement. Which means fee for service, we will cover the different type of alliances and they include non-equity alliance, equity alliance, joint venture, collaborations with academia, I won't cover to much measure in acquisition, because from an academic standpoint it's not always, there's not really much M&A from that standpoint, you'd never see A company really acquiring [INAUDIBLE] .I've seen in the tech world companies acquiring or actually, taking the whole department of [INAUDIBLE] institutions. But, that's a different story. All right. So, really, at the end of the day, research collaboration is either you invent the product or the technology, you swap it, meaning that you exchange it,or you buy it, which is really what strategical lines are really about. The RMAs. Here are the different types of collaborations, so we have research collaborations, which can be very basic, may be one to two years,or maybe. Multiple years depending on developers. You have drug development alliances, if it's too expensive, multiple companies will go in especially here for example in the cardiovascular area and join their fundings as well as their resources. Joint ventures, asset swaps, again I talked about a number of this one, I'm not going to repeat everything Let's cover R&D alliances, sharing risks and rewards through enhanced collaborations. Obviously, when you are doing an alliance, you want to reduce the risks, you want to diversify your risk by doing an alliance, you want to potentially reduce the cost. And you want to enhance the breadth and depth of knowledge because people are different, different companies or in academia versus companies and you want to have access to basically more brain power. The alliance focus is basically getting IP, getting innovation. And in some instances, technology platforms. One other thing that is absolutely key is what are the best practices. Well, you want to define very clearly the scope of the alliance. What does it entail. What deliverables are going to be delivered. You want a strong governance. Very often you want a team that is going to be a joint team on both sides, that's going to work together. That's going to be basically managing the process. The objective have to be clearly defined from the beginning with the common process. Everybody needs to agree. It has to be completely transparent, meaning that you need to be able to share the knowledge and everything that goes through, otherwise, it's never going to work. And then importantly. You need to have legal protection and it came from property and you need to define all this very early on. Let's talk about model Academic industry collaboration. So, fo example research relationship with a single investigator. This are usually very easy to do. Because you don't have too many layers. You have fee-for-service agreement, you have unrestricted research support and master agreement. For example, Sanofi and UCSF, a major alliance where basically they were looking and sharing expertise in diabetes research, and identifying new drug targets. UCSD did that also with Pfizer for example. So, there is really these are very big type of master agreement. And then there is also potentially bio clusters creating centers of collaboration. So for example, AstraZenca and University of Pennsylvania did this to generate new Alzheimer's drug candidates where they provided a lot of money. I mentioned the Pfizer Center for Therapeutic Innovations. Again, with a number of academic institutions where they provided basically funding up front and continues funding to improve productivity throughout their research. Let's talk about between pharma, other pharma and academia alliances. Gilead Sciences did this with Yale A $100 million deal over 10 years in cancer research. These deals are not too frequent. Sanofi-Aventis, for example, with Columbia University and diabetes, and with Harvard and Translational research. GSK, GlaxoSmithKline were in the Stem Cells Institute for five years. So, as you can see, these are really, really big deals. Not all of them are like that. There's other types of collaborations, for example, a Bayer Grant4 Target. And all these are with academics and so it really helps. And I think that industry has been really transforming from that perspective in really going to academic centers and gaining the research from academic centers. Let's talk about financial terms. This is going to be reasearch which is very interesting and again I give you the link to the research itself that you have access online but I just want to summarize it here. This evaluates about 2000 deals between 2007 and 2015 Upfront cash goes from anywhere from $80,000 a year to $1.1 million, you know it really depends on the scope. Again there is no cookie cutter type of deal it really depends on what you're looking at. Up to 5 years of license maintenance and payments, sometime up-front equity Especially when you're dealing with small biotech companies with big farmers companies you usually don't have they don't give equity to academic centers. Deal size overall can range any where from $80000 to ten million but I just showed you in the previous slide that you can have much larger deals with upfront and milestone which is basically bending on the deliverables. The other non-regulatory and sales milestone can be also very, very the median for this milestone about 1.1 million. And it really depend on IND filling, phase two, phase three kind of a try which you covered before, new drug application either at the FDA or that EMA and first approval. Sometime, you can get also development and secondary indication by stone, so for example if the drug has been approved for one indication. And then there is novel indications or maybe novel formulations that is approved, then you can get additional milestones which usually by a tech or academia is very pleased about. And the royalty are going to be based on the sales and so very often it is tiered Royalties in the sense that depending on how big the sales of the product is, then you can have decreasing royalty but the medium is about 3.5%. And again it depends on the stage as to which when you license or you do a collaborations of the product And then, if there is a sublicense, there is also revenue that usually is shared anywhere from 10 to 45%. Marketing alliances, this is really primarily between pharma And Biotech or Pharma and Pharma. The objectives here in marketing alliances is really to have marketing access, increase the market share and really be able to have a much broader access let's say you have a company that is only US based, a company that's only European based, well if they do marketing alliance it allows them to have then much broader market access. Market segmentation. They are going to focus primarily on how to measure success by Market Share. Also, by revenue and sometime by profit. Because, revenue is not the only thing. You can increase your revenue and not increase your profit. For example, Joint Venture doing Pfizer and GSK 2009. Where they basically wanted to have much broader access in the deficiency market virus, treating HIV and wanted to have a better development and research and have better marketing to make the business a lot more economically valuable. For example, AstraZeneca build their biologic pipeline that way by both M&A and strategic alliances, half of their pipeline today was basically through M&A and strategic alliances and this as I say in this slide many at a time by acquiring companies from 2005 they quite kudos, they acquired from 2006-2007 a number of other companies that are listed here are antibody and then they continue doing deals even as of today. And companies continue to do this to have access again as I mentioned earlier to build their pipeline and really transform themselves. Portola Pharmaceuticals which is a small biotech company, for example did a $120 million deal. In 2013 they started a non-exclusive clinical collaboration with Bayer & Janssen. To support primary there phase two and three study of their product in US and Europe. In 2016, the license the same product for Japan to BMS and Pfizer, so again expending the market. And to actually use their product and other factor. With their antidote. And what's interesting is BMS and Pfizer was then responsible for development, regulatory activities and commercialization in Japan because Portola Pharmaceutical didn't know how expertise in Japan. So, what do Portola get out of this? $15 million up-front payment. $90 million potentially in regulatory and sales-based milestones and double-digit royalty based on net sales in the territory of the drug, which is Andexanet Alfa. For Bayer, it includes, it allow them to include Rivaroxaban in this clinical development programme, which is quite important. Bayer is providing technical support and is funding the clinical study. What does Portola get in addition to this? Another milestone upfront payment of $5 million. And of course, milestones of approval when the Japanese Ministry of Health and Labor and Welfare approves the drug. So, as you can see, this is a very creative and innovative deal where basically on the same drug by segmenting the market and segmenting also Co-administration or co-collaborations with other product, in this case an antidote to this Factor Xa inhibitor can have a substantial influence and generate substantial revenue for Portola Pharmaceuticals. Let's now move to another type of collaboration, and this is New Consortiun. This is basically a consortiun that was established Several years ago, but in 2016, a number of other companies joined that consortium. Astra Zeneca, Pfizer, and Lily joined AbbVie, Biogen, Merck, UCB, and the project founder Critical Path Institutes or C-Path to basically streamline and accelerate discovery and development for Parkinson's disease. This was something that was developed in the UK where they committed a million pounds and really what they wanted to do is pull a number of companies to work together. And to share data on a disease that has been very difficult. And doing that it allows all these companies to have a lot more access and hopefully come up with new treatment.