FCB 금융학회

M&A Pitch Book Project – Global

Exelixis M&A Pitch Book

Project Background

본 피치북은 Kite Pharma, Inc.를 인수한 Gilead Sciences, Inc.에게 Exelixis, Inc.를 인수제안하는 피치북이다. 바이오/제약 세계 시장에서 손꼽히는 회사로서, Gilead Sciences, Inc.는 주로 Anti-Viral 제품을 팔며 흥행에 성공했다. 하지만, 세계적으로 사람들이 안전한 성관계에 대한 인식을 갖기 시작하며 Anti-Viral Market이 하락세에 입게 되었다. 이러한 상황때문에 Gilead Scineces, Inc.는 매출 저하와 비용관리를 잘 못하게 되었으며, 다른 시장으로의 경영을 넓힐 필요가 있었습니다. 바이오/제약시장에서 가장 유망한 시장은 암을 치료하는 Oncology market이며 Gilead Sciences, Inc.는 Oncology market에서 가장 유망하다는 제품인 CAR-T 제품을 판매하기 위해 Kite Pharma, Inc.를 인수하게 되었다. 이러한 시점에서 Gilead Scineces, Inc.에 큰 매출 증가 효과를 주지 못하고 있는 Kite Pharma, Inc.뿐만 아니라 Exelixis, Inc.의 흥하고 있는 제품을 판매하며 Oncology 시장 점유율을 늘릴 필요가 있다고 판단하여 Exelixis, Inc.를 인수제안하게 되었다.

  • Part 1. Target Overview: Exelixis, Inc.
  • Part 2. Industry Overview: Oncology Market Overview
  • Part 3. Transaction Overview: Football Field
  • Part 4. Transaction Overview: DCF Analysis
  • Part 5. Investment Overview: Investment Rationale

Project Leaders

Choi, Dong suk

Junior Finance Analyst
FCB Finance Institute

Concentration Area: M&A Advisory

Rhim, Jong uk

Junior Finance Analyst
FCB Finance Institute

Concentration Area: M&A Advisory

Kim, Won woo

Junior Finance Analyst
FCB Finance Institute

Concentration Area: M&A Advisory

Finance Project Portfolio

Part1. Target Overview: Exelixis, Inc.

Exelixis, Inc. is a biotechnology company that discovers, develops, and commercializes oncology products for cancer patients. The company successfully commercialized two products: COMETRIQ in 2014 and CABOMETYX in 2016. Revenue from CABOMETYX has been growing rapidly since its commercialization, and it increased 100% from last year’s first two quarters. Moreover, its revenue from collaborations is also rapidly increasing as Exelixis, Inc. started to focus on selling its products to their partners. As Exelixis, Inc. can give Gilead Sciences, Inc. an instant growth to their revenue, Exelixis, Inc. is a good target for Gilead Sciences, Inc. to acquire.

Part2. Industry Overview: Oncology Market Overview

As cancer is common among people around the world and as it’s hard to treat, patients’ demand in spending on oncology products is expected to increase in the future. By 2022 the global oncology market is expected to grow with a CAGR of 12.7% from 2016 by sales. Moreover, the oncology sector is the sector that is expected to outperform any kind of pharmaceutical markets. As Gilead Sciences, Inc. is experiencing a decline in revenue from its anti-viral products, it should look into expanding its business fields into oncology to ensure its place in the biopharmaceutical market.

Part3. Transaction Overview: Football Field

Compared with peer companies from biotechnology and oncology for trading comparables, EV/EBITDA multiple range for the acquisition of Exelixis is 20.5x. For the transaction comparables the EV/EBITDA multiple is 18.6x. Calculated numbers are based on the medical presses and reports that contain optimistic expectations for health-care sector.  Premium for the transaction will be between 5.8% to 22.7% for Exelixis’s current stock price.

Part4. Transaction Overview: DCF Analysis

The calculated Enterprise value for Exelixis was $5.5 billion based on the assumptions that Exelixis will meet its terminal growth rate at 2%. For the next five years, the revenue stream will continue its increase and expect to grow at the size of more than 5x. Economic drivers such as demographic factors and insurance policies will be play a crucial for the industry since, the demand for oncology products are showing a sharp increase and the insurance coverage is expanding.

Part5. Investment Overview: Investment Rationale

As moving in to the European market is a late move for Gilead for oncology products, by acquiring Exelixis it can be an alternative way to expose its brand value in the new market. Exelixis occupies a certain portion of the European market with the help from IPSEN group, thus after the acquisition Gilead can use Exelixis’ brand reputation and establish a marketing strategy for Yescarta. Since, Cabometyx and Yescarta are different oncology treatments respectively, Gilead can expect a positive revenue stream in the future. Current revenue growth for Exelixis which showed an impressive increase in 2018, will continue that will diversify the risk for Gilead of entering in the European market.

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