The Poliwogg BioPharma M&A Index

Transcription

1 The Poliwogg BioPharma M&A Index Q4 2016

2 Industry Background Scientific Innovations Driving Opportunities: Increasing Understanding of Disease Mechanism Genomics Enabling Precision Medicine Better Therapeutics Increasing Investor Opportunity 2

3 Index Rationale Mergers and Acquisitions in Biotechnology and Pharmaceutical ( Biopharma ) Industry Driven By Constant Expiration of Patent Exclusivity on Marketed Drugs and Lack of Productivity in Internal Development Programs The Loss of Pharmaceutical Patent Exclusivity for 2014 was $34 billion and Estimated to Approach $66 Billion in 2015 $219.4 Billion Worldwide Biopharma M&A Transaction Volume (Including Completed and Announced Deals, Asset Deals, Acquisitions of Divisions) $81.8 Billion Upfront Transaction Volume of Completed US and European Biopharma Company Trade Sales Up from $48.5 Billion in 2013 $87.7 Billion Overall Deal Value Including Contingent Payments Additional $78.8 Billion Value of Announced US & European Transactions Including $66 Billion Acquisition of Allergan by Actavis and $8.4 Billion Purchase of Cubist by Merck & Co. Mid-Sized Pharma Companies Spent Substantially More on Acquisitions than Traditional Large Pharma Firms 3

4 Industry Background Demographics Drive Demand for Healthcare: Aging Population (More Than 1.4 Billion Over 60 by 2030) Increase in Life Expectancy Increase in Rate of Chronic Illness Globally Half of All Lifetime Care Expenditures are from 65 On Source: United Nations, Department of Economic and Social Affairs, Population Division (2015). World Population Ageing Highlights (ST/ESA/SER.A/368). 4

5 Index Description Equity Index Designed to Isolate US Biotechnology Companies That Are Potential Takeover Targets Comprised of Three Main Business Segments Biotechnology Pharmaceuticals Life Sciences Tools & Services Inclusion Criteria Constituents Must Be Principally Engaged in the Biotechnology Industry Listed on Recognized Exchange Minimum Capitalization USD 1 Billion Maximum Capitalization USD 15 Billion Minimum Average Daily Trading Volume Greater Than 1 Million USD Existing Constituents Remain in Index Until Market Capitalization Exceeds USD 50 Billion Weighting Methodology Modified Capitalization Weighted Maximum weight 3.00% Minimum weight.5% The Poliwogg BioPharma M&A Index Embraces Companies That Mainly Participate in the Biotechnology Industry in the US. 5

6 Index Constituents & Performance

7 Historical Performance 8000 Poliwogg Biopharma Merger & Acquisition TR Index vs. Benchmarks* (12/31/ /31/2016) Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 PBMATR XNBI SNHLTHT SN500T *To ensure fair comparisons, all of the starting index values are normalized to 1,000 as of December 31, Source: Bloomberg, as of 12/31/2016 7

8 Calendar Year Price Appreciation Year PBMATR XNBI SNHLTHT SN500T 12/31/ % % % % 12/31/ % 15.84% 21.52% 26.18% 12/31/ % 15.25% 5.10% 14.94% 12/31/ % 12.08% 11.42% 1.45% 12/30/ % 32.29% 19.20% 15.84% 12/31/ % 65.97% 41.31% 33.02% 12/31/ % 34.40% 25.80% 13.75% 12/31/ % 11.77% 6.93% 1.34% 12/31/ % % -2.23% 11.65% 12/31/ % % % % Source: Bloomberg, as of 12/31/2016 8

9 Market Capitalization Profile Market Capitalization Profile Number of Constituents 73 Total Market Capitalization Largest Market Capitalization Smallest Market Capitalization Average Market Capitalization Median Market Capitalization Billion USD Billion USD Million USD 3.65 Billion USD 1.75 Billion USD Source: Bloomberg, as of 12/31/2016 9

10 Sector Distribution The Poliwogg BioPharma M&A Index: Sector Distribution Biotechnology 71.91% Pharmaceuticals 28.09% Source: Bloomberg, as of 12/31/

11 Historical Acquisitions Year Total Acquisitions Total 43 Source: Bloomberg, as of 12/31/

12 Top Ten Constituents Company Ticker Country Weight Grifols Sa GRFS US Spain 3.33% Jazz Pharmaceuticals Plc JAZZ US United States 3.28% United Therapeutics Corp UTHR US United States 3.23% Tesaro Inc TSRO US United States 3.18% Perrigo Company Plc PRGO US United States 3.11% Alkermes Plc ALKS US United States 3.08% Biomarin Pharmaceutical Inc BMRN US United States 3.08% Ionis Pharmaceuticals Inc IONS US United States 3.07% Incyte Corp INCY US United States 3.07% Dr Reddy'S Laboratories Ltd RDY US India 2.99% Source: Bloomberg, as of 12/31/

13 Statistical Profiles

14 Statistical Profile I Total Return Appreciation PBMATR XNBI DZOTR SNHLTHT SN500T 5 Year % % 99.49% % 98.31% 3 Year 17.40% 18.15% 6.66% 31.52% 28.70% 1 Year % % % -2.23% 11.65% Compound Annual Growth Rate PBMATR XNBI DZOTR SNHLTHT SN500T 5 Year 20.83% 21.00% 14.81% 17.24% 14.68% 3 Year 5.49% 5.72% 2.17% 9.56% 8.77% 1 Year % % % -2.23% 11.65% Source: Bloomberg, as of 12/31/

15 Statistical Profile II Annualized Monthly Standard Deviation PBMATR XNBI DZOTR SNHLTHT SN500T 5 Year 26.72% 22.85% 24.45% 12.16% 10.48% 3 Year 30.90% 25.47% 27.82% 13.02% 10.84% 1 Year 37.05% 31.12% 33.64% 14.15% 10.30% Sharpe Ratio PBMATR XNBI DZOTR SNHLTHT SN500T 5 Year Year Year Source: Bloomberg, as of 12/31/

16 Statistical Profile III Information Ratio vs. SN500T Index PBMATR XNBI DZOTR SNHLTHT 5 Year Year Year Jensen s Alpha vs. SN500T Index PBMATR XNBI DZOTR SNHLTHT 5 Year 0.10% 0.22% -0.26% 0.28% 3 Year -0.33% -0.29% -0.57% 0.14% 1 Year -4.58% -3.92% -4.26% -1.20% Source: Bloomberg, as of 12/31/

17 Statistical Profile IV Treynor Ratio vs. SN500T Index PBMATR XNBI DZOTR SNHLTHT 5 Year Year Year Downside Risk vs. SN500T Index PBMATR XNBI DZOTR SNHLTHT 5 Year 15.83% 12.84% 14.08% 4.82% 3 Year 19.55% 15.69% 17.17% 5.77% 1 Year 27.29% 21.89% 24.18% 8.03% Source: Bloomberg, as of 12/31/

18 Statistical Profile V Sortino Ratio vs. SN500T Index PBMATR XNBI DZOTR SNHLTHT 5 Year Year Year Correlation Matrix (5 Year / Monthly) PBMATR XNBI DZOTR SNHLTHT SN500T PBMATR XNBI DZOTR SNHLTHT SN500T Source: Bloomberg, as of 12/31/

19 Statistical Profile VI Beta Matrix (5 Year / Monthly) PBMATR XNBI DZOTR SNHLTHT SN500T PBMATR XNBI DZOTR SNHLTHT SN500T R-Squared Matrix (5 Year / Monthly) PBMATR XNBI DZOTR SNHLTHT SN500T PBMATR XNBI DZOTR SNHLTHT SN500T Source: Bloomberg as of 12/31/

20 Index Methodology & Distribution

21 Index Methodology Eligibility Criteria Market Capitalization > $1 Billion and < $15 Billion ADTV > $1 Million Must Be Principally Engaged in Biotechnology/Pharmaceutical Industry Fundamental Screens Must Have At Least One Drug in Phase II or Phase III FDA Clinical Trials -- or -- Must Have YOY Net Sales Growth Companies Remain in Index Until Market Capitalization Exceeds $50 Billion Weighting Methodology Weighting Based on Full Market Cap Weights Capped at 3% Weights Floored at.5% Complete data availability and index transparency facilitate more effective benchmarking and investment analytics. 21

22 Index Details & Data Distribution Index Values Distributed in Real Time (15-second snapshots) in USD and EUR Total Return Index Calculated Daily in USD and EUR Index Values Distributed via Consolidated Tape Comprehensive Historic Data (including simulated back-tests from 12/29/2006) Daily Prices for Price-Only + TR Indexes in USD + EURO Quarterly Portfolio Snapshots (Historic Constituents and Weights) Extensive Analytic support Quarterly Reports ( Index Insights ) Industry Overviews Extensive Statistical Data Comprehensive website Broad data distribution via third party vendors S&P/Bloomberg/Yahoo, etc. S-Network contribution page on Bloomberg: SNET 22