| If a growing biotech company wants to succeed, it | | | | join pharma. Most commonly, they select pharma |
| must create long-term sustainable value. Everyone | | | | because this provides for the fastest solution to |
| wants to partner with large pharmaceutical | | | | market. |
| companies, however, either they do it very early and | | | | Nevertheless, biotech-biotech partnerships are very |
| give away an important part of their long-term value, | | | | valuable for these companies to hold on to important |
| or they are unable to build all the capabilities on time | | | | value by giving pharma what it wants: integrated |
| to allow for their technological value to be noticed. | | | | technology solutions or product candidates with proof |
| These partnerships are difficult to manage given the | | | | of concept clinical data. |
| important cultural differences between organizations, | | | | In order to achieve biotech-biotech partnering |
| so, even though they are a fast way to build value, | | | | success, it is vital to design a carefully structured |
| they very often fail to deliver. | | | | arrangement. It is necessary to look at the |
| The most reliable way for a biotech company to | | | | relationship throughout phases, and to define |
| become successful is to develop a product that | | | | responsibilities, deliverables, and resource |
| meets a specific need and thus, is bought by many | | | | commitments for the first phase, always considering |
| customers. However, getting there is not easy. | | | | that something can change, thus, an alternative plan |
| Biotech companies normally strive to partner with a | | | | must be established in the agreement. At the end of |
| pharmaceutical company as a way to validate their | | | | each phase each partner must have the opportunity |
| technology and ensure financing. These partnerships | | | | to commit again or leave, with clear terms that |
| possess many benefits, but also pose challenges and | | | | should be agreed upon. |
| disadvantages, namely: an increasing number of | | | | The initial agreement should guide the relationship |
| biotech companies seeking partnerships; the fact that | | | | through the other phases, and it must offer a flexible |
| pharma companies really do not give extra benefits | | | | way to identify responsibilities. Given the fact that |
| like better R&D effectiveness and only pay royalties | | | | new companies change very rapidly, flexibility is |
| for well-defined product candidates; the difficulty of | | | | crucial. In truth, the shorter the partnership, the |
| managing such different working cultures; and the | | | | better. Since both parts have to compromise, every |
| fact that the big company always gets the largest | | | | partnership offers aspects of the relationship that are |
| portion of the deal because it acts as the technology | | | | less desirable for each party. Each company must be |
| integrator. | | | | able to develop its own interests and path forward, |
| Pharmaceutical companies have proven to be very | | | | so as to have a better chance of success. Three |
| inefficient in making the fast decisions needed to | | | | worthy models for biotech-biotech partnerships are: |
| take advantage of the opportunities at the drug | | | | - Barter model |
| candidate and clinical proof of concept phase of the | | | | - Baton exchange model |
| drug discovery process, a field where biotechs move | | | | - Draft model |
| very fast and where their business approach can | | | | Pharmaceutical consulting firms can provide |
| better meet the challenges of this phase. | | | | information and guidance on these three models and |
| The problem is that biotechs on their own do not | | | | how to best apply them given the case. |
| possess the range of capabilities needed to keep | | | | Through biotechs partnerships, these companies can |
| product rights after Phase IIa or to give an | | | | control their technologies for high value deals by |
| integrated technology solution. In order to address | | | | keeping product rights through Phase IIa or by |
| this, some biotechs decide to join forces with other | | | | providing an integrated technology solution. In this |
| biotechs that have complementary capabilities. | | | | way, biotechs can profit from their strengths and |
| Although this seems logical and feasible, since both | | | | move efficiently through drug discovery and early |
| have similar cultures and complementary skills working | | | | drug development, giving them the space to consider |
| together on a common purpose, these partnerships | | | | their next step: continue developing the product alone |
| have failed in the past. | | | | since it will have the financial capability to do it, or |
| What happens is that the partnership relationship | | | | consider a partnership with a pharmaceutical |
| works well great until the companies have to commit | | | | company. |
| to additional resources to take an initial lead to a drug | | | | If you liked this article, tell all your friends about it. |
| candidate, and they start discussions to partner with | | | | They'll thank you for it. If you have a blog or |
| pharma companies. Then, they start thinking what's | | | | website, you can link to it or even post it to your |
| best: to continue the 50:50 partnership that offers no | | | | own site (don't forget to mention as the original |
| revenue in the short term, or use their resources to | | | | source). |