Licensing Executives Society Announces 2006 Deals of Distinction Awards
Tuesday, September 12, 2006
New York, Sept. 12, 2006 -- Intellectual property (IP) is a powerful force behind innovation in all types of products and services. To honor the best IP deals that make these types of advancements possible, the Licensing Executives Society (USA and Canada), Inc. (LES) recognized several companies with its 2006 "Deals of Distinction" awards.
This program aspires to recognize worthy transactions involving licensing and transfer of IP and promote creative and innovative solutions to business issues involving contracts announced over the prior year, in each of the LES six industry sectors.
The awards were announced in connection with the LES Annual Meeting in New York City, held September 10-14, 2006.
"This year, we are proud to recognize six transactions that exemplify the theme of creation through licensing", said Jake Schaible, Chair of the LES Deals of Distinction Award Committee. "It is especially satisfying to highlight several of these deals which not only are good business, but aim to improve the health of society or the quality of our environment."
A Record Deal in the Consumer Products Industry
- Procter & Gamble and Gillette in the Consumer Products Industry Sector
- BASF and the University of Alabama in the Chemicals, Energy and Materials Industry Sector
- Paul Capital Partners and Verus Pharmaceuticals, Inc. in the Financial Markets Industry Sector
- Biogen Idec and PDL in the Healthcare Industry Sector
- Los Alamos National Laboratory, Sandia National Laboratories, Science and Technology Corporation at the University of New Mexico, New Mexico State University, New Mexico Institute of Mining and Technology, The MIND Institute, and the National Center for Genome Resources in the High Technology Industry Sector
- The Global Alliance for TB Drug Development and Bayer Healthcare AG in the Industry/University and Government Laboratory Transactions Industry Sector
The 2005 $54 billion dollar deal by Procter & Gamble for Gillette is considered a seismic event for the consumer products industry. P&G, already the largest consumer products company in the United States, expanded its global leadership with this acquisition. The deal also opens up several markets for Gillette, including China and Japan, while allowing P&G to significantly raise its annual revenue growth projections.
P&G agreed to issue 0.975 shares of its common stock for each share of Gillette common stock, targeted to provide an 18 percent premium to Gillette shareholders. To protect P&G's shareholders from dissolution effects, P&G announced a plan to buy back some $18 to $22 billion of P&G common stock to yield the equivalent of a deal structure of 60 percent stock and 40 percent cash.
"As the largest consumer products deal in history," stated Susan Vaughn, 2006 Chair of the LES Consumer Products Industry Sector, "the Procter & Gamble acquisition of Gillette combines two best-in-class consumer products companies with a strong brand portfolio of twenty-two $1 billion dollar brands, supported by proprietary technologies, superior know-how, and a proven track record of innovation."
Collaboration to Advance "Green Chemistry"
BASF and the University of Alabama in Tuscaloosa (UA) earned honors for a deal on "The Ionic Fluids for Cellulose Processing Transaction." Cellulose, derived from the cell walls of trees and other plants, is the most abundant bio-renewable organic chemical, and is used in the creation of many products, including paper. Processing of cellulose using ionic solvents greatly simplifies cellulose processing and minimizes waste.
This collaboration expands BASF leadership as a supplier and developer of ionic liquids by granting it access to technology developed by a U.S. research team, headed by Dr. Robin Rogers, Director of UA's Center for Green Manufacturing, and provides UA with a partner that intends to develop practical applications of the technology while providing UA resources to ensure it retains a leadership role in this area of research.
According to Bob Payne, 2006 Chair of the LES Chemicals, Energy and Materials Industry Sector, "the award-winning licensing deal between BASF and University of Alabama Tuscaloosa is a great example of how a major chemical company and a university can build new and promising relationships through technology licensing".
Using Intellectual Property to Generate Start-Up Capital
Paul Capital Partners and Verus Pharmaceuticals, Inc., struck a deal which brought in $20 million in funding for Verus. A product-specific royalty financing transaction, it is recognized as innovative because it expands the practice of monetizing intellectual property, in this case as a source for start-up funding. This deal was completed in conjunction with $78 million in Series A financing, yielding a total of $98 million to Verus.
According to Michael Schein, 2006 Chair of the LES Financial Markets Industry Sector, "The novel Verus-Paul Capital financing deal is a terrific example of how companies can use product licensing in combination with traditional financing efforts to access complimentary and alternative sources of capital."
Biotech-Biotech Portfolio Deal
Biogen Idec and PDL created a global alliance to develop and commercialize three Phase II antibody therapeutics. Structuring the agreement around three therapeutic candidates provides Biogen Idec with access to a portfolio of late stage opportunities, which hedges some of the risks inherent to drug development. By working together on multiple opportunities, they create the potential for substantial synergies in the relationship, which could provide benefits in improved efficiency and effectiveness of the development and commercialization activities for these programs. While portfolio deals are not new to healthcare dealmaking, this is one of the first between two mature biotech companies and highlights the growing competition for big pharmaceutical companies to use in-licensing to fill product pipelines.
"I'm very pleased to offer our congratulations to this year's winners of the LES Deals of Distinction Award in Healthcare for this innovative, late-stage co-development deal around three potential antibody-based medicines that may one day prove to have use in treating multiple diseases," said S. George Simon, 2006 Chair of the LES Healthcare Industry Sector. "This agreement demonstrates the growing trend in biotech-to-biotech deal-making and reflects the synergies that can exist between two biotech companies."
Patent Bundle to Ease Access to Technology
Los Alamos National Laboratory, Sandia National Laboratories, Science and Technology Corporation at the University of New Mexico, New Mexico State University, New Mexico Institute of Mining and Technology, The MIND Institute, and the National Center for Genome Resources forged an inter-institutional agreement that aims to improve access to technology and ease complexity of negotiating intellectual property license agreements by forming a contract which allows bundling of patents. The agreement was an experiment designed to provide rapid response and flexibility, so that when commercial opportunities arise, the parties can quickly capitalize on them rather than spending time negotiating contracts between themselves. Creating such patent bundles has been shown to reduce the barriers for licensing and accelerate adoption of new technology. "This award-winning deal between these seven New Mexico research institutions is a great example of building an inter-institutional agreement involving transfer and licensing of intellectual property using creative and innovative solutions to business issues," said Gaby Khouri, 2006 Chair of the LES High Tech Industry Sector.
Healthcare Public-Private Partnership
The Global Alliance for TB Drug Development and Bayer Healthcare AG are coordinating a clinical trial to study the potential of moxifloxacin to shorten tuberculosis (TB) treatment. The program aims to study the potential of Bayer's fluoroquinolone antibiotic, moxifloxacin, to shorten the standard six-month treatment of TB infection. (The drug is already sold in the United States under the trade name Avelox® as a treatment of other bacterial infections.) The agreement is important in the global health community because mycobacterium tuberculosis infects one-third of the world's population, resulting in nine million new cases of active TB and two million deaths each year. Public health experts note that a shorter TB regimen would help ease the estimated $16 billion annual economic burden and enable healthcare workers to treat more patients. A shorter protocol could also reduce side effects, improve patient adherence to therapy, and save lives. The deal is an excellent example of a public-private partnership between a major pharmaceutical company and a not-for-profit organization which balances the competing needs and issues inherent with expanded drug development of a marketing medicine for new uses.
"The partnership between the Global Alliance for TB Drug Development and Bayer Healthcare is stepping out of the comfort zone to leverage both public and private strengths to look for a shorter and more effective regimen of treating a deadly and debilitating disease that impacts especially poorer nations," said Bob Gruetzmacher and Isabelle Gorrillot, the 2006 Co-Chairs of LES Industry/University and Government Laboratory Transactions Industry Sector.
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About the LES Deals of Distinction Awards Program
The LES Deals of Distinction Awards Program aspires to recognize worthy transactions involving licensing and transfer of intellectual property and promote creative and innovative solutions to business issues involving contracts. Nominations with the support of a LES member are considered and recommended by the LES Deals of Distinction Awards Committee, with input from the industry, and ratified by the LES Executive Committee. The criteria for the 2006 awards include distinctive deals in structure or objective, announced in 2005, with at least one party having a presence in the U.S.A. and Canada. While opinions are solicited on the nominees, the ultimate winners are chosen exclusively by the leadership of LES (USA and Canada), Inc, and their specifically delegated representatives.
About Licensing Executives Society (U.S.A. and Canada), Inc.
Established in 1965, the Licensing Executives Society (U.S.A. and Canada), Inc. (LES) is a professional society comprised of over 6,000 members engaged in the transfer, use, development, manufacture and marketing of intellectual property. The LES membership includes a wide range of professionals, including business executives, lawyers, licensing consultants, engineers, academicians, scientists and government officials. Many large corporations, professional firms, and universities comprise the Society's membership. Licensing Executives Society (U.S.A. and Canada), Inc. is a member society of the Licensing Executives Society International, Inc. (LESI), with a worldwide membership of over 12,000 members in 30 national societies, representing over 80 countries. For more information on LES, please see our website at http://www.usa-canada.les.org/aboutus/
About Procter & Gamble (NYSE:PG)
Three billion times a day, P&G brands touch the lives of people around the world. The company has one of the strongest portfolios of trusted, quality, leadership brands, including Pampers®, Tide®, Ariel®, Always®, Whisper®, Pantene®, Mach3®, Bounty®, Dawn®, Pringles®, Folgers®, Charmin®, Downy®, Lenor®, Iams®, Crest®, Oral-B®, Actonel®, Duracell®, Olay®, Head & Shoulders®, Wella®, Gillette®, and Braun®. The P&G community consists of over 135,000 employees working in over 80 countries worldwide. Please visit http://www.pg.com for the latest news and in-depth information about P&G and its brands.
BASF is the world's leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics, performance products, agricultural products and fine chemicals to crude oil and natural gas. As a reliable partner to virtually all industries, BASF's intelligent solutions and high-value products help its customers to be more successful. BASF develops new technologies and uses them to open up additional market opportunities. It combines economic success with environmental protection and social responsibility, thus contributing to a better future. In 2004, BASF had approximately 82,000 employees and posted sales of more than €37 billion. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA), New York (BF) and Zurich (AN). Further information on BASF is available on the Internet at www.basf.com .
The University of Alabama is a student-centered research university. Its mission is to advance the intellectual and social condition of the people of the state through quality programs of teaching, research and service. The state's flagship university, UA's research, creative activities, and instructional programs form a foundation for extensive service activities, establishing a number of partnerships with business, nonprofit organizations, and government through applications of new knowledge. These relationships often extend beyond the bounds of the state as the University assists developmental efforts at regional, national and international levels.
About Paul Capital Partners
Paul Capital Partners manages nearly $5 billion in equity capital commitments for its three investment platforms that include Healthcare Royalty and Revenue Interests, Private Equity Secondaries and Top Tier Fund-of-Funds. The firm has offices in New York, San Francisco, Paris, London and Toronto. The Paul Royalty Fund is one of the largest dedicated healthcare funds globally, with approximately $1 billion in equity capital commitments. The Paul Royalty Fund has made investments in the pharmaceutical, biotechnology, and medical device sectors valued at more than $625 million. These investments are focused on commercial stage companies and products, and consist of investments in the form of royalties, revenue interests and equity. For more information on Paul Capital Partners and the Paul Royalty Fund visit www.paulcapital.com.
Verus Pharmaceuticals is dedicated to improving the lives of children and those who care for them. Verus is building a portfolio of products for the unmet medical needs of children through acquisitions and alliances, with an initial focus on the treatment of asthma, allergies, and related diseases and conditions. Verus is differentiated by its pediatric orientation and its strong financial position and experienced management team, which allows the company to capitalize on an extensive network to build its product portfolio and pursue complementary transactions. The company's rigorous, disciplined approach to strategic decision-making and core competencies in development and commercialization is expected to provide significant value to its partners. More information about Verus is available on the company's corporate website at www.veruspharm.com.
About Los Alamos National Laboratory
Los Alamos National Laboratory is a multidisciplinary research institution engaged in strategic science on behalf of national security. The Laboratory is operated by a team composed of Bechtel National, the University of California, BWX Technologies, and Washington Group International for the Department of Energy's National Nuclear Security Administration. Los Alamos enhances national security by ensuring the safety and reliability of the U.S. nuclear stockpile, developing technologies to reduce threats from weapons of mass destruction, and solving problems related to energy, environment, infrastructure, health and global security concerns.
About Sandia National Laboratories
Sandia is a multiprogram laboratory operated by Sandia Corporation, a Lockheed Martin company, for the U.S. Department of Energy's National Nuclear Security Administration. With main facilities in Albuquerque, N.M., and Livermore, Calif., Sandia has major R&D responsibilities in national security, energy and environmental technologies, and economic competitiveness. About Science and Technology Corporation at University of New Mexico
Science & Technology Corporation @ UNM (STC) is a nonprofit corporation formed by and owned entirely by the University of New Mexico (UNM) (formed in 1995 by the Regents of UNM) to protect and transfer its faculty inventions to the commercial marketplace. STC licenses innovative technology developed at UNM, including optics, microfluidics, and high performance materials as well as therapeutics, diagnostics, medical devices, and drug discovery tools.
About New Mexico State University
New Mexico State University, which began in 1888 as an agricultural college and preparatory school, is a comprehensive land-grant institution dedicated to teaching, research and service. The university offers academic programs at the undergraduate, master's degree and doctoral levels. Total fall 2006 enrollment for the university's main campus and four community college campuses was more than 24,500.
About New Mexico Tech
New Mexico Institute of Mining and Technology was originally founded in 1889 as the New Mexico School of Mines. Over the years, our mission has expanded, and we are now an outstanding research university, specializing in areas of science, engineering, and related fields. New Mexico Tech is a world leader in many areas of research, including hydrology, astrophysics, atmospheric physics, geophysics, homeland security, information technology, geosciences, energetic materials engineering, and petroleum recovery.
About The MIND Institute
The MIND Institute was founded in 1998 to conduct basic research searching for true understanding of normal brain function, as well as mental illness and neurological disorders, by exploring all aspects of brain imaging technology. It brought the unique medical imaging research capabilities then available at selected national sites together into a single effort against brain disease, while creating a world-class neuroscience research institute in New Mexico. Today, MIND scientists continue their quest to fully map the brain, advance imaging technologies, and discover the causes behind brain disease.
About The National Center for Genome Resources
The National Center for Genome Resources (NCGR) in Santa Fe, New Mexico, is a non-profit research institute dedicated to improving human health and nutrition through collaborative research at the intersection of bioscience, computing and mathematics. NCGR is a pioneer in the use of software and computation to advance personalized medicine, diagnosis and treatment of infectious diseases, legume crop improvement, food security, and clinical decision support systems. www.ncgr.org
About TB Alliance
The Global Alliance for TB Drug Development (TB Alliance) is a not-for-profit, product development partnership accelerating the discovery and/or development of affordable, new anti-TB drugs that will shorten treatment, be effective against multi-drug resistant strains, treat HIV-TB co-infection, and improve treatment of latent infection. Working with public and private research laboratories worldwide, it is leading the development of the first, most comprehensive portfolio of TB drug candidates in three decades. It operates with the support of the Bill & Melinda Gates Foundation, the Rockefeller Foundation, the UK Department for International Development (DFID), the United States Agency for International Development (USAID), the Netherlands Ministry of Foreign Affairs (DGIS) and Irish Aid. For more information on TB drug development and the TB Alliance, please visit www.tballiance.org.
About Bayer HealthCare
Bayer HealthCare, a subsidiary of Bayer AG, is one of the world's leading, innovative companies in the healthcare and medical products industry and is based in Leverkusen, Germany. Bayer HealthCare generated sales amounting to some 9.4 billion euros and employed 33.800 people worldwide in 2005.The company combines the global activities of the Animal Health, Consumer Care, Diabetes Care, Diagnostics and Pharmaceuticals divisions. The new Pharmaceuticals division was established on January 1, 2006, and comprises the former Biological Products and Pharmaceutical divisions. Pharmaceuticals now has three business units: Hematology/Cardiology, Oncology and Primary Care. Bayer HealthCare's aim is to discover and manufacture products that will improve human and animal health worldwide. The products enhance well-being and quality of life by diagnosing, preventing and treating diseases.aceuticals divisions. Bayer Pharmaceuticals Corporation is part of the new Global Pharmaceutical Division, established January 1, 2006, which consists of the former Biological Products and Pharmaceutical Division and now comprises three business units: Hematology/Cardiology; Oncology and Primary Care. Bayer HealthCare AG employed 33,800 people worldwide in 2005.