How to Build and Sell a Biotech in 2024 | Transcript

Joe Coletti

Welcome to another edition of Strategic Alternatives. I'm your host, Joe Coletti. In this episode. We're diving into the fast moving world of biotech M&A and the changing dynamics of value creation. Recently, at RBCs Global Healthcare conference in New York, we convened a panel of CEOs with a combined deal value of $29 billion under their belts this year. Roberto Bellini, Mark McKenna, Bill Muery and Dan O'Connor to discuss what it takes to successfully build and sell a biotech in today's markets. The conversation is moderated by our senior biotech analyst, Brian Abrams, Luca Issi and Greg Renza. Let's get right into the debate. Let's dive into the discussion.

Greg Renza

Let's get started and good afternoon everybody. Welcome to the 2024 RBC Global Healthcare conference. My name is Greg Renza. And we are delighted to present a panel today essentially on how to get a deal done, cracking that nuts getting a company to a stage where we have a positioning that there's attractiveness from it from a strategic it also involves the attractiveness of just getting to the next step, but this can be a monumental task executing on a sale has it has its complexities, particularly when considering the assets, the pipeline, maybe the platform, even the financing environment, in the market. Maybe we'll just turn within that context. Just walk us through your respective paths to this most recent sale. But Bill, we'll start with you on Karuna.

Bill Meury

I started Karuna in late 2022, essentially, so I wasn't part of the founding team. That was Andrew Miller and Steve Hall. And look, when I started, I knew that the company had two value creation paths. No different for any company. There's the standalone path, and then there's of course, M&A. I knew that the only path that I controlled was a standalone. And I was very deliberate in not speculating about M&A. I think it destroys value and doesn't create value. When I started the company, we had about 125 people. 12 months later, we had 300 people. It was a foundation in place when I got there. But we focused, we're in the middle of phase three trials, we focused on making sure clindev, clinops, biostats pharmacovigilance, CNC. And then of course, all the SGA functions were locked and loaded and we were focused on only one thing, building the company. And I believe certainly in that situation that we could commercialize the product. It was not intimidating to me. It was not a lunar landing. It was infinitely doable. I don't subscribe to the notion that, you know, small companies are good at development and big companies are good at commercialization. I get why that myth exists. And I think it's relevant because if you build a great company, then you have optionality. Put a for sale sign around your neck, and it's not a good look. And ultimately, when a buyer does show up, if they show up, which I don't think anyone should count on, they're going to look at how the company is being operated, and their diligence is going to be sophisticated, it's going to be complete, it's going to be precise, and they're going to want to make sure that they're not acquiring a problem here. And if you have an experienced, sophisticated buyer on the other side, and we did in BMS, it made the process run relatively, relatively smoothly.

Mark McKenna

Maybe just picking up where Bill left off. You know idea of focusing on inputs, not outputs, focusing on building a great company, I think is a common theme you're going to hear from each of us out here. I don't know the other two gentlemen, but Bill and I both came from big pharma, and having sat on the other side of this of the wall, you kind of smell the sellers. And it not only destroys value, it oftentimes, you know, ruins the deal. And, you know, I came into Prometheus post B round $50 million valuation, left Big Pharma. I was running a $2 billion revenue business, and a guy named Tachi Yamada, many of you probably know, called me about this little platform coming out of Cedar Sinai, and had a lot of great prospects for bringing precision medicine into immunology, but we didn't have a development candidate at the time. So here you have a commercial minded CEO going to run like an early stage company without a DC but the tools were there, and what we had to do is put them together. And it had a commercial stage diagnostic business to enable to enable precision medicine. But what we learned really early on is that, you know, investors struggle with mixed business models, so we had to spin that out to investors. The second problem we had was we didn't have, you know, traditional venture investors involved in the company. And it took us a year and a half to raise capital in that in that environment. And once we did, you know, obviously we prepared for IPO, and the flywheel was moving. But, you know, everyone sees like, 14 billion, $11 billion outcome. You're like, ‘oh, that, you know, sounds easy.’ There are many times where there was almost a crash landing on the moon, you know, where we almost went bankrupt. I remember sitting in my CFOs office and asking her, what happens if we can't raise this round of capital? She goes, we'll just file these forms and, you know, file bankruptcy and close the doors like, ‘Okay, well, what's behind door number two’, she goes, ‘you know, we're gonna raise the money.’ And we ended up doing a partnership with a European partner on our second program in Europe, and that provided us with $20 million and confidence for investors to come in. What most people don't know about that story is, I flew over to Germany using my United Airlines points. That's how desperate things felt, true story. And so, you know, it was a scrappy team that, you know, kind of took this thing from a, you know, small idea to changing the game in INI, and you know, honored to be here today to share more of these insights.

Roberto Bellini

I probably have a very different background from these two gentlemen. I came more from the investor side on in a family office, and then move over into a couple of operational roles and became a very, very young CEO at Bellis in 2010. I was thirty years old. I ran a program for seven years that failed. Company was only TSX listed, essentially a micro-cap at that moment, in 2017 and the team, we wanted do another project, and we went out and we in, licensed a chronic cough drug that was preclinical in 2017; and interestingly, kind of like the whole investment hypothesis, Merck had just acquired Afrin, so there was, kind of, like, Big Pharma interest. And probably one of the dumbest things I could have done when I pitched, you know, doing the in-licensing at the board was I told the board. I was like, ‘Listen, just follow this path. We're going to run the same phase 2 study, we're going to get the data, and we're going to sell the Big Pharma.’ And honestly, I spent the next like seven years trying to walk that back with my board. I think very quickly, you know, I realized that it was going to take a lot of patience to kind of make that happen, and it was much more important to focus on building the business and having the ability to keep building that business over the long term. And to Bill's point, I think that as the company grew, we were we were building our own confidence up, like we were absolutely ready to launch the drug on our own. And I think that that's something when you think about the emotional state, the confidence that's in the management team, like, you need to have that kind of ability to be able to take that next step in the company. Because I think, I mean, I'm sure we're going to go through it, but I think M&A there's the stars need to line up.

Dan O’Connor

The approach I took it Ambrix really was a different situation. The company had been in existence for 20 years and done some great work, but had IPO’d and saw a pretty steady decline since its IPO I think probably within weeks, weeks of taking the role of CEO, we were getting delisted from our exchange that we were on, which wasn't a fun day. But we then really, you know, the approach was, whatever all the other gentlemen have said on the panel, I'm grateful we did it, which was that we just focused on what we needed to do to develop the company. And that was really triaging. It's not just one thing. A lot of people had said, you know, ‘You turned Ambrix from 38 million market cap to a billion dollar sale to J&J, how'd you do that?’ And my answer always is, it's not one thing. It's multiple things coming together at once. But it's definitely not focusing on selling the company, because when you do that again, it ripples into pretty much everything you do, and it becomes a virus. I specifically did not go out and solicit anybody on any of the programs. Really, what we did was just heads down, execute, build the team. You know, work with great people and, you know, show solid development and communicate. But not reach out, not knock on the door of, you know, the potential Pharma partners. Only, footnote I put there is, if you have an asset you're looking to sell, then by all means, you should look to sell it, right? There's things you're not working on that you should sell, because maybe somebody else can do something with it. But if it's your active developmental program, you know, doing any kind of overt knocking on the door of Pharma to sell, I think is a bad thing. It generally doesn't work. It makes you lose your focus doing and eventually, if you do good work, they're going to come to you anyway.

Greg Renza

And certainly a common theme that we're hearing is just the commitment to focus and what those results yield, certainly in the image of uncertainty. Talk a bit about having a real failure, a clinical failure, where you had to pick things up, redefine a program, run another phase to study and basically reestablish the value proposition that you probably remember as you were in licensing the product.

Roberto Bellini

Yeah, absolutely, and I'm happy to do it in the context of kind of thinking about it from an M&A perspective. So the as I was mentioned, it was a preclinical program that was a fast follower to Merck. Even based off of phase one data, we showed differentiation on the side effect profile compared to Merck that enabled us to do a NASDAQ IPO. So we cross listed, raised a lot of money, brought in a whole lot of great investors. Market cap of the company was over a billion dollars going into our Phase 2 readout. And I'd say that, you know, very largely, all investors thought that that trial was going to be positive. So there are very high expectations. And at the same time, in the background, we were talking to a number of Pharmas, and one of them in particular, made it very, very clear to us that if we were going to have positive data, that they were going to make an offer. And so there was a lot riding on the data, and the data came out negative that day. So it was a surprise to all of us. Stock went down 80% and I think we saw a path forward. There was a pre-specified subgroup, and I'm not going to go through all the details of that, but you know, we saw that patients that cough less were diluting the results. We ended up running an enrichment trial with patients that cough more, and had really great phase 2b data. But from an M&A perspective. What was very interesting was that thereafter that big pharma cooled completely on the space. And so even as kind of like moved into our phase 2b data and read out on that phase 2b data, their priorities had changed. They were no longer in the market to do M&A. They were ready to kind of offer us, you know, a licensing deal, which we're not interested in. So maybe just another kind of, like, interesting view of how the results and the timing of those results, and aligning that with the priorities of potential acquirers is very important,

Brian Abrahams 

Maybe to further build on that, Dan a little bit, but Ambrix was a significant turnaround story from when you joined until you ultimately sold the company. I'm curious, were some of the key aspects to that?

 

Dan O’Connor

Yeah, I think actually does pay attention to markets reception of a company. You know, it's sometimes people will say, ‘Well, if you're, you know, if your stock is at $2 a share, that's a great buy for pharma, what? They'll just come in and scoop you up.’ I think it's the opposite. There's a psychology to that that impacts it's also another third party validation. The market is validating this technology. In terms of, actually, I wanted to add one other thing, even though you don't just going back to that last question, always be ready for it, right? Build your data room. You know that was always something that, you know, actually from the beginning, just we actually had the skeleton of one existing when it came to the company, but work to get that in ship shape. Just because you, if you do end up having those conversations, you're going to want a very well honed data room. And it's, I think Bill said, it's one of the things that you've got a scorecard when they're looking at you, or you mature company, do you have yourself, your self, organized properly, and a good data room definitely demonstrates that. I think, you know, it's really all the things we all know to do, but just going and doing them right, finding the right people, putting them into the right positions, developing a strategic communications messaging, don't be a CEO in the closet, right? I think at Ambrix really getting the right people in, and being very fortunate that I had colleagues who were willing to work with me again. A couple in particular had the opportunity to really start to dig into our data. And, you know, the kind of, the more we looked, the better, you know, kind of the more we liked it. I think, to your other question before about when things you know, when studies don't work out that reaction, it can be the opposite too. You can have great data and the market doesn't react, which is, I think, even a worse situation sometimes.

Mark McKenna

I think, just to add on real quick, when you think about the overlay between the investment community and the strategics, you know, the last thing the head of M&A wants to do is go out and do a deal to and see a negative reaction, and they do look at analyst reports and they look at price targets to when they when they show the board, to better understand, you know, are we overpaying or underpaying? Like, how should we think about this, feel? So ratings do matter in that context. I get it some investors. Ratings matter in the context of investors, I get it, most people that go overlook that, but in the context of strategics, there is a value there. And the only other thing I would add there is on the question about data room, I think it's a really good point to be organized. But there's also a mistake that a lot of companies make by showing too much too early. And strategics are going to be naturally doing. They may not even be interested in your company. They're looking at all the different compounds in that particular space, competitive intel here. And so I think you really need to be very thoughtful about when and how you disclose anything, and to what end? What is your like being able to understand from, you know, having been on the other side? Well, what are you trying to achieve? Are you looking at a an acquisition? This is a category you're looking to build? Where would this slot in? Like having some of those clarifying questions in advance kind of sends a signal to them that you're not for sale. So it's a fine line. You don't want to be overly like, standoffish, but you also don't be like, here, let me show you everything I have.

Greg Renza

Mark, maybe building on that. How do you protect that, that that focus, but also acknowledge the potential blood at blood in the water, and the blood in the water is essentially off of great data that that you had disclosed a few months prior. Just walk us through the complexities of all those parties.

Mark McKenna

Yeah. So we decided, as a board and management team that based upon the amount of people that were around the hoop, we wanted to see who was actually real, and we also had data coming in a few months. And so what we did is we ran a partnership process. And again, this is not for everyone. Each situation is bespoke and proceeded at your on risk. There's no such thing as a non-dilutive deal like from a partnership perspective. But what we wanted to do was create optionality. In the event that data was mixed, the data was bad, you know, obviously, you know, we got 17 parties under CDA, you know, we educated them, and then the data came out, and I remember on Saturday morning calling CEOs of 17 companies to let them know that we didn't… there's was no need for their teams to work over the holidays. We we're not going to be licensing this, this drug. So we're proceeding to phase three. And some of them really appreciate it, but others were like, well, this makes me want you more. And, you know, see, we went pencils down, went to the holidays. JP, Morgan comes up. And, you know, we, we were working these parties to optimize for the best outcome for the company. And it, you know, we never were not anyone about it. But we also made sure that, you know, the only way to get to an optimized outcome, in our view, was to have multiple parties bidding, and the FTC, you we're going to get into that later, honestly played a big role. In thinking through who we were going to sell to, and at what value and what would what would XYZ company need to pay who competes in that space to be commensurate with Merck? And at that time, you know, things were at height of the FTC, thinking about Amgen-Horizon. You know, our board was, you know, very skeptical about, you know, if we had to wait six months, 12 months, the time value of money, it just made sense to optimize the outcome, knowing that we had one horse that was clean, they didn't compete in the category, and were the ones that had done the most work.

Luca Issi

Super helpful. Maybe just quick question on valuation, once you do get offer, and that offer is on the table, how you're thinking about valuation, like, let's say there is a scenario where there's an offer on the table that is a substantial premium your stock, but still substantially below what you think is the MPV of the company. What do you do in that scenario? Like maybe walk us through your thinking, Bill?

Bill Muery

If you're running a company, you should have a very well developed point of view. Not the CFOs point of view, not a banker's point of view of what the intrinsic value of your business is. When you're managing the balance sheet and cash flow, you're worried about the low end of the range, and when you're trying to sell your company, you're thinking about the upper end of the range. And I think you really have to be realistic, because in my experience, if there's a mistake companies make, the smaller companies, biotech or emerging biopharma, is you overestimate the marketability your product and you underestimate about five things. Time to market. Investment basic risk. And you underestimate the inertia in the market, how hard it is to get market access. All those things and if you have that well developed view, your buyers are going to have it too. They know exactly what they think it's worth. And it doesn't matter what you think it's worth. It only matters what they think it's worth. And then, of course, if it turns into a competitive process, then all of a sudden, intrinsic value is here, and then there's a market value. And there are a number of different reasons these premiums reach 70, 80, 90% or more. But start with, what's the intrinsic value of the business? And people can debate all the assumptions. The assumptions and say, ‘well, they're just assumptions.’ You have to go on if someone's going to write a check. The decisions that some of these large companies, they serious decisions. They need. They don't want to get too many of them wrong. I think the equity research analysts and the point of view in research is incredibly valuable for buyers and sellers, because they'll think about it different, will challenge the conventional wisdom of a management team, and there is validation when investors believe in the potential of business, when analysts believe in the potential of business, as long as it's a balanced sort of presentation of the fact, I think it's really important to make do some of these deals, especially the larger you know, when you get into 5, 10, 15 billion or more, those are not small bets, no matter how much money people have.

Greg Renza

And maybe just looking at, Mark, you brought up FTC and hearing about the and the deals mattering… are you using that to inform your decision?

Bill Muery

It was part of it. It wasn't, I don't think the top three in our specific situation, but even if you look more broadly, it was a light touch antitrust era, and that changed two or three years ago. But even still, I think my numbers are right. Only less than 2% of all HSRs filings receive a second request. In the healthcare sector, it's 11% right? The bigger the deal, the more likely. Now, if you get a second request, the numbers are also a little bit alarming… 35 to 45% of those deals will get recut or not done at all. It wasn't a major factor. It's not a mystery what the FTC is looking at. We were in the middle of an NDA filing 450,000 pages and making sure that in a transaction, the operations of the company between signing and close were not interrupted was important to us, and you have to think about that. But it's not at the top of the list. I think it's great headlines because of CGen and Amgen. But when you think about the numbers, 10% get a second request, it's normal regulation.

Mark McKenna

So the only thing I would challenge that is how many are pulled and refiled. That number looks different…

Bill Muery

But then it goes faster.

Mark McKenna

It does. But I would just say that Ceravil. Good example, they got a second request, and I think that it's a factor. I think we both agree on that it's a factor. It's not the deciding factor.

Bill Meury

That's right. It does get more mysterious when the legal principle is not about market concentration or eliminating competition or preventing an entrant. It's when they're looking at the practices of one company relative to how those practices apply to a target, and I don't think that's a strong principle, and that's why many of these deals ultimately get cleared. And I think for the larger deals, it's probably, as Mark suggested, it could become a much bigger factor.

Dan O’Connor

And on the law firm too, getting a group that's actually done it before multiple times, is who you want. There's specialty firms out there that do justice, and there's the folks at work, that's right.

Brian Abrahams 

What about broader market and macro factors? Things like stock volatility, overall, biotech sector sentiment, interest rates, even recession fears? How did that impact not only the development and maturity of your businesses to get to a point where they were attractive acquisition targets, but just the overall process in talking to potential acquirers?

Bill Meury

Yeah. I mean, look, you have to be aware of all the things that you just talked about when, when there's uncertainty around interest rates, that's going to depress values, that's going to complicate financing. I think, when your stock is acting like a mood rather than a true measure of value, that can, that can complicate things too. Those generally should be more transient than permanent. You know, if, if you, if you owned a small business before the pandemic and it was a weak business, you probably didn't have a business after the pandemic, sure, but all the strong businesses before the pandemic are thriving today. And I think when you think about your company, all the macro factors that could impact that, whether it be the market or interest rates or the overall economy, regulations. If you're building a good business, you will you get through these periods, and by the way, and I think the investors think about it this way too. Buyers see it too. They know the difference between what's transient and what is permanent. And if you have someone that really understands a particular understand your business. They have a need. They have the fire power to do it. The macro is not going to stop them, because they're serving. They're trying, as you know, you're solving for earnings and cash flow that's sustainable and long term. We don't have forever assets, unfortunately, like in the consumer world, but that that's ultimately what you're solving for,

Mark McKenna

I think matters with regards to purchase price, because of the fact that there's only so much premium that they want to put out there, because they're concerned about the precedent that it's setting for future transactions. And so if one stock price is depressed, you know, it takes a lot more for a board to rally around a 300% premium than it does a more traditional premium, right? And I think that the inverse is also true. I think about the cardiometabolic space, how many of those companies now have more than 5 billion dollar valuations and have kind of gotten overheated a little bit because the sector's hot, have almost become not transactable, because the price and the amount of R&D dollars that are going to have to go against that to run phase two, phase three studies. And so I think it goes both ways here, and it'll be interesting to see. You know, what these cardiomelabolic companies do, because of the fact that, there may not be a pharma there willing to pay the premium. And these are very these are expensive trials to run, and so they're probably struggling with, like, how do I actually advance the company, while the there's a normalization of my market cap as data matures.

Roberto Bellini

Yeah, I want to reemphasize the point around the premium. Because obviously, the absolute number and how that matches up to an NPV estimate is very, very important, the value driven there, but the premium is extremely important as well. So you're playing with both of those factors. And as someone that lived through that very specifically, I can tell you that it was very frustrating. So our stock, we had generated very, very strong phase 2b data stock went up, did financing, and there was a lot of buzz around, like, oh, like, there could be M&A with a one product company, very strong. And a phase two regulatory interaction that… Set up the phase three. We also raised money off of that. And we said we're ready to move into Phase 3 and as we got closer and closer to phase three, and eventually started that phase 3, investors started thinking that, ‘Oh, M&A is not going to happen right now, right?’ So some of some of the M&A premium in the stock was coming out. And then you’re in that one moment. I don't know you could say no and like, see if it works again in six months or 12 months. But otherwise, you're kind of like committing yourself to going a much, a much longer period of time. So you're in that one moment, and you got to make the decisions about, like, is this the right moment?

Luca Issi

Maybe just quick question on your broader views on how M&A and the outlook for M&A, more broadly for the rest of 2024…

Mark McKenna

I personally think we're going to see significant amount of activity. Everyone's busy, and it is the perfect storm with $320 billion of LOE going out over the next seven years, you can either cut your way to a future or you need to start buying things. I think the challenge that I see right now is mature assets that have already been taken, and it's going to force pharma to move earlier. And they're also what my understanding is, there's a lot more conversations going on around private companies now than private companies now than public companies. And so I guess a trend that we're going to see for a while. But the the big companies have to make moves. I think BMS, you know, they got a $30 billion delta they got to solve for and yes, Karuna is going to help with that, but they got to do a lot more. And the question is, how much money they're willing to put on the table. And I think you're starting to see pharma making cuts so they can justify further deployments of capital into M&A.

Roberto Bellini

Yeah, maybe the only thing I want to add to that, just a tidbit of info, like, just through our kind of, you know, discussions on the M&A side, the companies that were the most interested were where there was high synergy, right? So the respiratory companies, okay? And then the LOE impacted companies, like those are the ones that had interested in us. Because, the LOE impacted companies are desperate, like they will build something new if they if they think that that's the right move, right? It's forcing them to think much further outside the kind of like normal kind of box.

Dan O’Connor

Yeah, the only thing I'd add It's inevitable. They have to, right? Unless they do it themselves. They have to bring assets. Most of the times it was the late stage assets and how much revenue could that bring in and increase their, you know, their EPS numbers, versus how much they're going to have to spend? Because they have the money there to spend. It's just to make, you know, an accounting feature for them and how they get judged on the street.

Brian Abraham

I want to build on that a little bit more and really understand what Pharma wants these days. You all sold companies with lead assets that were post proof of concept. Is that what Pharma is looking for now, are they looking at your earlier stage, later stage, then just maybe even building further? Did you find in the process that Pharma companies were really more interested in leveraging and building on their strengths and areas of expertise, because that would enable synergies and help facilitate their diligence, or as their franchise and they're looking towards LOEs, if they're genuinely looking to diversify and get into new areas,

Bill Muery

If you're running a diligence process, one of the things you want someone to focus on are threshold questions. Diligence can last months, there can be hundreds of people in it, and it's important for you in running your company, that you understand what the threshold questions are. And they're not surprising. I think the first one is strategically. Do I want to be in an area? And I think if they go outside of an area of expertise and they build a new vertical or product line, they got to be sure that they have the capabilities to do it, and that there's new product flow through that new vertical, so that, the hurdle there is going to be higher for any buyer. Same if you're building the company and you want to enter, you got to be smart, because you can get your face ripped off pretty quickly if you don't do that right. That's number one. I think the second thing the look at is, do I have an approvable asset. Yeah, it's got to be novel. It's got to be marketable. But is the development and regulatory path here a mystery? Is it a minefield. And then the third thing is IP, you can't replace a patent cliff with a patent cliff. That's like beachfront real estate. It becomes very, very important. I think those are threshold, threshold questions. Okay, then, of course, the layer in, well, what should the peak revenue potential? What does the P&L earnings and cash flow look like on this business? And I think that's how they think about it, and that's how they should think about it.

Dan O’Connor

I think there's bias towards them buying assets that are in the footprint of their existing programs. I think it's pretty rare that they want to expand into some therapeutic indication that they don't have a presence in. I think the change to that, though, is if it's a platform technology and/or if it's like something that happened with the checkpoints a while ago. So when you saw the PD-1 checkpoints, and checkpoints really starting to come in. I think you see that a little bit with the ADCs now, to a certain extent that you know they're looking and saying, We need a presence in this space, because it is the future kind of thing.

 

Mark McKenna

I think, going back to the cardiometabolic space, you know, I think that CEOs of these companies are all getting questions from the board and from investors, if they're not in it today. Well, you know, how is it you're going to be a top 10 pharma company? You're not competing in the biggest category in the world. So I think that, my bet is, that over the next 12 months, you're going to see those that are not in the space make bets because they want those questions to die down.

Greg Renza

What does pharma think of a platform versus single?

Mark McKenna 45:56

Yeah, we were a broken record at that point talking about multiple ways to win to both of investors in strategics. But no one wants to buy a drug and have one indication reading out, don't have it not work out that's not a good day job. People lose jobs. And so I think that it's, it's, it's less likely that you see a big takeout on a platform itself. Like you think about a lot of these platform type of companies, until they actually generate assets. You know, you're seeing, like, more partnerships. You're seeing smaller transactions. Why is that? Because, Pharma doesn't want to take the next 10 years to, you know, add on to their own development efforts. You know, they're looking for near term revenue. And I can tell you, time to market matters probably more than anything else in your DCF, right? And so your ability to demonstrate your launch timing with some conviction be one of the most important aspects to your dialog with pharma. Because if they have 2032 in their model, and you're saying a 2028 that four years of sales matters. And if you know helping them, give them the rationale, the backup as to why it's 2028 well, can get you a much better proposal.

Dan O’Connor

I actually don't think they really look at platforms too much honestly. I think that they pretty exactly what you just said. They're looking at the asset. The reality is, you know, they're focused on something that's been de risked as much as humanly possible. You know, there's a saying you don't get fired for the deal you don't do. And then everything else is upside to them, right? And they'll tell you, you know, sometimes, like, yeah, we acquired this company and we didn't even consider this asset in the pipeline. And then I think, was the meta X or metabean, rather acquisition BMS and where Merck found an add on, type of thing. But that does happen. But I think in terms of the dialog you're having, it's mostly almost always, what do you have in front of me? When's it going to get to the market? How much revenue is it going to kick off, and what's the PLS?

Greg Renza

Bill, Mark, Roberto, Dan, thank you very much for joining me.

Joe Coletti

Thanks for listening to another episode of strategic alternatives, the RBC Capital Markets podcast. Remember to subscribe to the podcast to stay up to date on all our future episodes. This episode was recorded on May 15, 2024. If you'd like more information or to continue the conversation, please contact your RBC representative or visit rbccm.com/strategic alternatives. See you next time.