Biocom‘s fifth annual Global Life Science Partnering Conference took place this week at The Lodge at Torrey Pines in La Jolla, California. The panel kicking off the event was entitled “Five Secrets of Business Development” moderated by Jack Tupman, Former VP, Corporate Business Development, Eli Lilly with panelists Karen Bernstein, Chairman, Co-Founder and Editor-in-Chief, BioCentury; Richard Brudnick, SVP of Corporate Development, Biogen Idec; Iain Dukes, SVP, Licensing & External Science, Merck; Chris Haskell, Head, US Science Hub, Global External Innovation & Alliances, Bayer HealthCare; and Bob Smith, SVP, Business Development, Worldwide Research & Development, Pfizer.
The panel focused on business development issues and strategies, and offered some insights from the panelists’ perspectives on how they manage their business.
Here are the panelists’ responses regarding some of the challenges they face with partners after the deal is signed, and what they are doing about it.
- Two really big issues for us in partnerships is one, the level of work that each side does in terms of fairness and two, cultural issues and an understanding of what the deal is. On the first case we ended up stopping a partnership where we didn’t feel the division of labor was fair, in another we changed the terms of the partnership because we felt we were doing more than the partner. And in another one, we mutually ended because we had a very different vision of what we should be doing. You do not see the cultural issues when you’re having a nice dinner together. You don’t see the differences in opinion before you’ve actually starting working on something; something that’s just a concept, not a piece of paper. For me, those are the really big issues and they come up after you’ve actually had the nice dinner and signed the paper. (Karen Bernstein)
- For alliance management, in my experience with the different hubs we have around the world, it is important to have the alliance manager sit close to the partner. Not only does this put them in the same time zone, it provides the partner with someone who can quickly answer contractual questions. The external partner needs to have one point person they can go to to get answers to their questions no matter what division they work in. One of the challenges of working with early innovation is that there is often a large component of de-risking. As well, you’re often dealing with people who don’t necessarily have the same definitions of what de-risking is or what certain milestones are. That means an added level of work that has to happen on the other side. (Chris Haskell)
- To your question about how to manage the closed deal, it’s something that we are paying close attention to at Merck. We look at the specific deals like Cubist and Idenix, and the integration of these companies was very important. You can easily lose sight of that when you sign the deal. It’s also very important to figure out who on the team will make sure all the assets are built with value, and the case for the acquisition is rementioned. (Iain Dukes)
- One of the things we did in our deals with Cellectis last May, and then with Spark Therapeutics in gene therapy in December, was we structured those deals in a way that we could leverage the expertise and infrastructure that our partners had in place. Then we built a very detailed transition plan on how we would migrate from there, taking the lead on a lot of the early development, process development and early manufacturing work, and then have a plan where that would transition into us as the programs essentially succeeded. So it’s a form of integration that benefits both our partners in terms of their ability to continue with planning and development. It also gives us the opportunity to build our own infrastructure and capabilities in a very volatile, risk-appropriate way. So that has been a real challenge. We’re still in the early phases of this and both programs are quite broad. Hopefully we started out well and will continue to do well. (Bob Smith)
- The topic of integration is incredibly important to Biogen and relevant to who we are today and to the excitement about who we will be in the future in terms of programs and partnerships. I have observed that when it’s done poorly, the first thing that happens in the partnership is that a year of progress is lost as two sides figure out who is going to fundamentally run the strategy. So it’s really important to get it right. There was a time at Biogen Idec where the belief was once ‘the deal is done, let’s get the business development people out of there because they’ll never stop negotiating.’ In fact, experience has shown that if you don’t keep the BD people involved, the first thing that happens is people who are new to the relationship start renegotiating the deal. So in addition to alliance management, it’s important that the people who understand how you got there in the first place, and all the tradeoffs that took place, who understood what the disparity in the deal was and what the parties bring to it, stay involved for a period of time. So within business development we actually initially serve as the alliance manager to make sure that we get off on good footing. (Richard Brudnick)