Biopharma Partnering: Striking a Deal with Big Pharma

Biopharma Partnering: Striking a Deal with Big Pharma

Small-Boat-Pulling-a-Larger-Tanker

As what used to be healthcare’s busiest meetings week is going to be a week of virtual interaction around the globe, we thought it worthwhile to share a few considerations on partnering between biotech and large pharma from the perspective of the developing biotech.

Fishing for a Big Pharma Partner

A good fly fisher knows exactly what the trout are feeding on, and ties up a fly that best reflects the fish’s appetite. The same holds true in Big Pharma partnering, only there are a few more layers of complexity to contend with. In essence though, there are similarities and a few best practices should be followed

  • Know who you are fishing for and get to know them
  • Understand with whom you are competing and be sure to have the best lure
  • Cast your asset past their eyes a number of times to gauge early reactions
  • Remember, they are also hungry, so when they bite, pull hardscience? What are the optics of the dea

Business Development executives at Big Pharma see hundreds of partnership opportunities every year, and they quickly cut through them by having a clear strategy both in terms of therapeutic areas of interest, therapeutic and technological priorities but also in terms of desired project maturity. Furthermore, these priorities are fluid as a result of their evolving pipeline and portfolio requirements, general scientific advances in the field and competitive dynamics amongst others. Being on top of these Big Pharma priorities is just as much a part of a biotech BD executive’s role as the fishing itself.

Know who you are fishing for

Knowing your asset and the context in which it sits (disease setting, market/patient needs, competitive landscape etc.) is basic knowledge. Knowing which pharma players are actively searching in that space is also basic knowledge. However, understanding how your prospective partners believe that the market will evolve, what type of assets will be winners and consequently what data an asset should be supported by – are all critical insights that set you up for success.

In most organizations Business Development is closely aligned with R&D, as it should be. Ongoing discussions with prospective partners are a generous source of feedback that should be incorporated into research and development planning. If a partner is looking for PET-based receptor occupancy evaluations, not providing those will obviously require explanation and put you behind others who have delivered. While we are not advocating to our biotech clients to do everything big pharma asks, their feedback should always be carefully considered. Very importantly, for most developing biotechs, the large players are the “ultimate customers”, whose yes or no will determine the fate of a product and its originator company – which in turn focuses the primary objective of biotech research and development on delivering to Big Pharma (or, of course, have a strategy how to succeed without them).

As fields evolve, the parameters for deal making may also change quickly. In fields like gene therapy or CAR-T, for example, Big Pharma were initially eager to partner with companies that had early stage assets or assets that were targeting very niche indications, but as one BD executive recently recounted, today most big pharma in these areas are insisting on human proof of concept data before even considering a program for partnership. Given the speed with which big pharma policies can evolve, having a deep network with prospective partners’ Search and Business Development teams, and maintaining regular touch points is the best way to stay abreast of these changes.

Try not to share the same spot on the river: Differentiate

If a big pharma company is looking for an asset in a specific area, they will be looking at all projects in the space. Know how you differentiate, know which of those differentiating attributes will appeal to the prospective partner and continue to build on that differentiation.

Differentiation comes in a variety of colours. Clearly product differentiation is the most obvious of these, and that story will need to be clear. A strong Target Product Profile articulating key indications, expected comparative efficacy and safety, quality of life, dosage and route of administration, are all fundamental. Having a smart development approach that aims to highlight valuable secondary endpoints, that goes much further to address unmet need, or that improves the positioning of the asset for future market access, will help you stand out. Additionally, having early regulatory agency feedback that paints a clearer picture of the path to approval will further differentiate you against others without such insight. Finally, differentiate in your interactions with prospective partners. Be close to them, be engaged, have a great pitch deck that explains the science as well as the commercial aspects of the project clearly. Stating you are playing in a multi-billion dollar market often just elicits eye rolling.

Casting your lure: Share your evolving story early

There is always a balance between maintaining the confidentiality of an evolving project and sharing the exciting story with prospective partners. While that balance needs to be met, it can be very impactful to introduce a prospective future partner to a project at an early stage, even if there is no immediate intention to strike a deal. In this way you get to know them and they have the time to get to know your asset, understand its value and get a leg up on diligence if it does come to partnership discussions. Share of mind is also a powerful tool to compete with other projects in the same space, or conversely, not having any bait means you will not catch the fish.

Numerous ambitious CSOs relish the idea of building a bullet proof data set and then having a big coming out party to get the big pharma companies to come begging. While that may work if you are at the absolute forefront of a novel technology, in general it is not a recipe for success and can often backfire.

When they bite be ready to reel them in

When a big pharma company expresses real interest in your asset, they will get serious quickly. It is important not to find yourself unprepared for the level of activity that will likely begin. Have your data room ready and organized. Have a clear perspective of what kind of deal you are looking for, and to what degree you want to remain involved with the asset during development and commercially. Identify a legal and advisory team to represent you during the upcoming negotiations and bring them up to speed. It will also be important to build a transaction team internally that includes members from each discipline to ensure that questions can be quickly addressed during diligence. Such a team should not just work reactively by answering questions when they come up but should be aligned on the strengths and weakness of the asset and have a prepared narrative, especially for the weaknesses including a clear path to addressing them if needed. There is a cultural element that needs to be fostered with the team, which is conducive to rather than protective from Big Pharma diligence.

Finally, at this stage, senior management need to engage to demonstrate enthusiasm, articulate the importance of the emerging relationship and begin to lay the ground work for the future collaboration. The cultural alignment between both organizations begins to be highly relevant at this stage as both organizations evaluate their compatibility to work well together and whether they have shared values. Catch-and-release should not be the policy here.

Subscribe to our mailings!

Thank You

Please choose your subscriptions:

Unsubscribe any time using the footer of our emails. For information about our privacy practices, please visit our privacy policy.

We use Mailchimp as our marketing platform. By clicking below to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp's privacy practices here.