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EisnerAmper Blog

Technology and Life Sciences Blog

Pfizer Bolsters Oncology Business with Medivation Acquisition

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August 23, 2016

By Amar Bhatkhandé  

Pfizer announced it will acquire San Francisco-based Medivation Inc., for $14 billion.  

Medivation’s portfolio includes the successful prostate cancer medication Xtandi, which may also have applications for both advanced breast cancer and for liver cancer. Medivation also has a pair of promising drugs in its R&D pipeline: another one for breast cancer (Talazoparib) and one for blood cancer (Pidilizumab). 

With this purchase, Pfizer is continuing its focus on taking a leadership position in oncology, which it considers one of its key product lines—some of the others being immunology, inflammation, cardio vascular, metabolic and neuroscience.  

Pfizer’s bid of $81.50 per share in cash far surpassed Sanofi’s April bid of $52.50 per share. Merck & Company, Gilead and Celgene were also thought to be interested in acquiring Medivation. 

Medivation was founded in 2004. The company’s Xtandi product has generated more than $2 billion in worldwide net sales since 2015 and is forecast to reach $5.7 billion in sales by 2020.  

This is Pfizer’s first major acquisition since its ill-fated attempt to purchase Allergan in April. The U.S. Treasury Department had blocked that deal citing it as a “tax inversion,” where a U.S. firm attempts to merge with a company in a country with a lower tax rate. 

The deal was approved by the boards of both companies, and Pfizer expects to complete the Medivation acquisition later this year.

Hyperloop to Debut in United Arab Emirates?

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August 23, 2016

By Marc Fogarty

When a metal sled sped down the football-length track in the Nevada desert at a 2.4 gravitational force in May 2016, the founders of Hyperloop One called it a “Kitty Hawk moment.”  

Originally conceived by Elon Musk, hyperloop is powered by passive magnetic levitation technology. Transportation pods will be enclosed in depressurized tubes; by eliminating friction and air resistance, designers expect hyperloop to reach speeds of more than 700 miles per hour. That could take people from Los Angeles to San Francisco in 35 minutes. While those speeds may seem unsettling to potential travelers, hyperloop developers liken it to riding in an elevator. It remains to be seen if hyperloop will be above ground, below ground, underwater or some combination. 

Hyperloop One is targeting 2019 to be able to move cargo and 2021 to move people. In fact, Hyperloop One and DP World, the third-largest terminal operator in the world, agreed to do an economic feasibility study on how to deploy the system at Dubai's Jebel Ali Port. DP World is interested in a possible submerged, floating hyperloop system to rapidly move cargo. 

There is widespread optimism that hyperloop will revolutionize travel not only by its speed, but by doing so without carbon emissions. However, hyperloop still faces a variety of challenges, including safety and land use rights. Furthermore, some estimates have pegged the LA to SF construction costs at anywhere from $6 billion to $100 billion. 

Hyperloop One is headed by venture capitalist Shervin Pishevar, whose firm is a major funder of Uber. But  the Hyperloop project is a collaborative affair that includes other VC firms, transportation specialists, technology experts, dozens of engineers, and those with a political background, as well as hundreds of open source participants.  

To date, Hyperloop One has secured $120 million in funding. Pishevar has indicated that additional cash generated by Uber could go into hyperloop development. 

 

Facebook Not Taking the (Click) Bait

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August 19, 2016

By Amar Bhatkhandé  

Have you ever scrolled through social media and saw an irresistible headline like: “Young couple buys a house. You’ll never believe what they find in the attic!” You then click on the link and the article is different or woefully disappointing. 

That type of headline, where it withholds or gives misleading information, is called clickbait and Facebook wants to minimize it. The social media giant is taking significant steps by identifying thousands of phrases that may or may not be common clickbait headlines. It then uses a specially designed algorithm, similar to spam detection, that then places these stories less frequently or lower in readers’ newsfeeds. It can also determine possible clickbait by looking at how much time people spend reading an article, how quickly they unlike an article along with website traffic patterns. 

This move by Facebook comes on the heels of a report earlier this year that it suppresses conservative-leaning news from its trending topics. Facebook denied the news bias allegations. 

The clickbait initiative will impact content publishers eagerly trying to reach Facebook’s 1.7 billion users. They may have to adjust their content or look at using other social media platforms. It remains to be seen if native content, which is paid for by advertisers, would be similarly affected.

 

Remember the Ice Bucket Challenge? It’s Paying Big Dividends!

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August 18, 2016

By John Pennett  

It’s been 2 years since millions posted funny yet “chilling” videos of people dumping buckets of ice water on their heads. The Ice Bucket Challenge was created to raise money and awareness for amyotrophic lateral sclerosis (ALS), commonly known as Lou Gehrig’s disease. ALS is a degenerative disease that affects the brain and spinal cord and kills approximately half of those diagnosed within 2 years. 

The challenge became a viral sensation during the summer of 2014. More than 17 million videos were posted, which were seen by nearly half a billion people. The challenge ultimately raised $220 million, most of which was designated for research to treat and cure the disease.  

Donations from the Ice Bucket Challenge led to the founding of Project MinE, a global gene sequencing initiative where scientists in 11 countries studied thousands of ALS patients. These scientists were able to identify a gene common among those with the disease: NEK1. This may help researchers develop a gene therapy to treat the disease as well as possibly improve the quality of life for those living with ALS. 

According to the ALS Association, this is not the first breakthrough using research dollars from the Ice Bucket Challenge. Last year, Johns Hopkins researchers discovered the protein TDP-43, an important marker of those with ALS.

 

The Augmented Reality of Pokémon Go

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August 17, 2016

By Amar Bhatkhandé  

Most of us are familiar with the term virtual reality (VR) where, through technology, someone enters a completely artificial environment. But there’s another type of reality that is asserting itself on the tech landscape: augmented reality (AR). 

What Is AR?

AR enhances one’s perception of reality by supplementing his or her experiences with help of computer-generated sensory inputs such as sound, video, graphics or GPS data. Dating back to the 1960s, AR is just now starting its march to the mainstream via hardware and software development, particularly in handheld devices. 

AR Uses

The biggest impact of AR is currently in gaming and sports. The current Pokémon Go craze is a great example of how AR can suddenly go mainstream with the right combination of hardware, software and imagination. Another AR example is the yellow “first-down” line seen not at the actual football games, but on television screens during game broadcasts (or, for those of us staying up late to watch the Olympics, the “world record” line leading/chasing/right on top of the swimmers). AR technology can be further developed for a wide range of practical applications—including architecture, health care, education and the military, to name a few. 

Concerns

Because AR depends on someone’s device to record and analyze the environment, a major concern is privacy. Recording voluminous amounts of data can become an issue if proprietary/copyrighted information is captured. There are also data security issues should AR developers capture user information.  

The Future

We’ve only scratched the surface of AR. (While VR is expected to be a $30 billion industry by the end of this decade, AR is projected to reach $90 billion by 2020.) As the hardware and software get more powerful, there’s little doubt AR will become more prevalent in our daily lives.


The Numbers Behind Walmart’s Acquisition of Jet.com

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August 15, 2016

By Richard Cleaveland  

The NJ Tech community is abuzz about the recent news of Walmart’s acquisition of Jet.com for approximately $3 billion. A closer look at how the proceeds will be divided reveals a deal that appears to be a win for all concerned. According to Pitchbook, Hoboken, NJ-based Jet.com did a total of 4 rounds of financing in a little over 2 years. Pitchbook further reports that the preferred shareholders of Jet.com had only a 1x liquidation preference, the preferred shares were non-participating and they had non-cumulative dividends. Where we generally see 2x and 3x liquidation preferences, cumulative dividends and participating preferred, the founders and other common shareholders—including option holders— appear to have benefited from more favorable terms.     

Given the amount paid by Walmart, even with less-favorable rights and preferences, the preferred stockholders also did very well. Based on Pitchbook data, it made sense for the preferred shareholders to convert to common, which would yield more in proceeds than the liquidation preference and accumulated dividends. Since they owned approximately 65% of the company, we estimate they took about $1.9 billion of the total proceeds. The Series A round investors earned a total return over 2 years of approximately 969%, while the B1 and B2 holders earned total returns of 329% and 30%, respectively, over 9 months. This still left about $1 billion for the common shareholders and option holders, which presumably are the employees and founders.  

While many have lamented that Jet.com was gobbled up before it could grow into the next Amazon, it was a great deal for everyone involved, including the NJ Tech community. Because investors made money, it shows the VC community that there are great investment opportunities in NJ. The founders and employees appear to have made money, which they will hopefully use to start and fund other tech companies in NJ. And Jet.com, now a part of Walmart, has access to a lot more capital to continue building its business, which may mean more jobs at its Hoboken location.  

 

The Technology Behind Pokémon Go

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August 1, 2016

By Amar Bhatkhandé  

If you’ve recently seen people bumping into things or wandering into the street while holding their smartphones, chances are they’re playing the hottest game around: Pokémon Go. But what is the technology behind these masses going to multiple Poké Stops and using Poké Balls to capture colorful, exotic characters? 

History

Niantic Labs—a Google spinoff whose creator was instrumental in the creation of Google Maps—uses augmented reality, a concept dating back to the 1960s. Where virtual reality takes place in a completely fabricated environment, augmented reality digitally enhances someone’s actual environment. 

Technology

Pokémon Go uses a trio of smartphone elements: GPS, camera and clock. The player creates an avatar that, through GPS mapping technology, can travel through real-world environments to capture characters at street corners, stores, parks and other places. The more characters a player catches, the more points they accumulate and the higher the level they go. The game uses a complicated algorithm to place characters in an environment and the smartphone’s clock to help create day- or evening-specific characters and settings. One of the drawbacks users report is that, because Pokémon Go uses a single server, the app often freezes and the game is a huge drain on the phone’s battery.  

Success

Despite some technical glitches, and because augmented reality is somewhat more user-friendly than virtual reality, the game has become a runaway hit. With more than 50 million downloads worldwide, it is the top iOS and Android app and has increased Nintendo’s share price by 60%. In fact, daily use is twice that of Facebook.  

Residual Benefits

Players are intrigued by the nostalgia for the 1990s game, the game’s custom experience and the social aspects of meeting other players. It is even cited as a positive way to get often-sedentary gamers some fresh air and exercise. 

Other Applications

This may be, however, the tip of the iceberg. As the technology progresses, augmented reality can be used to help in health care, disaster recovery, manufacturing and a litany of other non-gaming areas.  

Monetization

Pokémon Go is a free game that offers some in-app purchases. (These purchases alone have generated $35 million thus far and may top $3 billion within 2 years.) But there are a variety of ways to generate additional revenue streams. Some stores are using virtual “lures” to make their establishment a Poké Stop and thus attract potential customers. There is also the possibility of incorporating advertising and sponsorship opportunities into the game. Niantic may even start licensing its technology to other gaming sites, which raises privacy and security concerns. 

Is Big Brother Watching?

Many game users log in through their Google accounts. And according to the permission fine print, Niantic has access to players’ email accounts, Google Drive documents, search history, photos and more. Further, Niantic has the right to sell/share the data with “unspecified” third parties.  While no security breaches or hacking episodes have been reported as of yet, all parties concerned should stay vigilant.


EisnerAmper is an independent member of Allinial Global.
EisnerAmper is an independent member of EisnerAmper Global.