WSO has been instrumental in helping me break into this role so I want to offer some of my insights to anyone else who's looking to break into the industry.
Brief background: Graduated last December from a target school and now I'm finishing up my first year as an analyst in the corporate development team at a mid-sized pharma company. Happy to answer any questions regarding this role!
Let's cut to it, comp?
Many thanks for doing this. I recall some of your other posts which were very insightful so this AMA should be useful to many folks in each case :). I had a few questions if you don't mind:
1) Did you start the role as part of a broader rotational program, or was it specifically a hire for the corporate development team? (I do know that some companies have M&A/strategy baked in to their broader rotational programs, with this being the one way to circumvent pre-requisite banking experience as a way to get in)
2) When you've received a buy/sell side mandate from an operating division within your company on a potential opportunity, is corp dev tasked with running the entire process? Or do you hire outside advisors? I know that in some cases, the corp dev team runs with the entire M&A process (e.g., Drafting the CIM, conducting diligence, transaction document negotiations), but wasn't sure if this was the case here
3) Do you have a sense of where folks exit/depart to at the junior level and expected comp say 2 years out from starting? presumably the option is there to move up, but I imagine there are a few more opportunities at the analyst level than otherwise.
Thanks for doing this, +1 SB.
Also in CD, albeit I landed here as an associate after a rotational program and am in Med Tech now. You mentioned that your firm is more interested in de-risked mature assets. That's extremely expensive place to play in....
1) what's the deal flow like, even the big boys are hesitant to do a lot of activity on mature (thinking post POC)?
2) How do you guys naturally structure your transactions? I've seen a lot of co-development agreements with options to in-license based on trial results in my eyes, but curious to your thoughts.
Also, how do you like it compared to your expectations? Do you have a desire to go into to the operations side one day?
These are great questions, I'll try to answer them as best as I can
Our deal pipeline is pretty robust. Our team usually looks at anywhere from 5-10 deals at a time. My words earlier about de-risked assets were a bit misleading. We generally only consider assets that have some sort of proof of concept (P2, P3 or commercial stage), but that does not mean that they're completely de-risked. They may still have some clinical risk or commercial risk (e.g. awaiting results from a confirmatory trial, asset is in an indication that may have many failures before, competitive market with lots of existing assets or potential future competition)
Generally our deals are structured with an upfront payment and a few commercial and development milestones. I've also been on a few deals where we split the cost of developing the drug, EBITDA splits and option agreements to in-license based on trial results.
I've been enjoying my time in this position so far, but to be completely honest, I'm not 100% sure if I want to stay in pharmaceuticals. My life and work experience thus far have been really great and I'm in no rush to leave. Although this may be challenge, I have a desire to look at investments from the perspective of a financial acquirer vs. a strategic acquirer.
Let me know if you have any follow-ups to this.