Transaction Case Studies

Deal Structuring and Valuation Support for $1.8B Global CNS Co-Pro, Co-Dev Agreement

Situation Assessment

• Otsuka is a Tokyo-based, publicly traded, pharma company with a predominant focus on psychiatric products, led by Abilify® for Major Depressive Disorder, Bipolar disorder, and Schizophrenia.
• Two programs currently in development, Abilify ® Depot, a sustained release one monthly Abilify ® formulation and OPC-34712, a novel next generation product were the subjects of partnership discussions.
• Engaged Locust Walk Partners as its valuation, deal negotiation and strategy advisor.

Key Activities

• Worked with senior management team to define the partnering strategy and its alignment with corporate goals
• Assimilated existing Otsuka revenue and expense models for both Abilify ® Depot and OPC-34712 and integrated them on a worldwide basis into sophisticated deal negotiations model
• Continued refinement of P&L model and rNPV model running a wide range of potential P&L and deal scenarios, including the impact of each scenario on the corporate P&L
• Prepared precedent licensing transactions to guide the deal expectations and deal structuring.
• Provided ongoing deal structuring and negotiations support to help Otsuka achieve its corporate objectives

Successful Outcome

• Transaction with Lundbeck concluded November 11, 2011 with a $200M upfront and $1.8B in total deal consideration

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