Getting The Most Of Your International Alliance July 18 19,2011


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Getting the most of your international strategic alliance by maximizing your partner\'s resources.

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Getting The Most Of Your International Alliance July 18 19,2011

  1. 1. GETTING THE MOST OF YOUR ALLIANCE INTERNATIONALLY BY MAXIMIZING YOUR PARTNER’S RESOURCESPharmaceutical Licensing Partnerships and Alliance Management Conference July 18-19, 2011 Philadelphia, PA Daisy Rivera-Muzzio, R Ph, MS, MBA Managing Partner, DRM BioPharmSource
  2. 2. IntroductionAlliances between small players (biotech, academia, small companies) and bigpharma have been driving the innovation in the biopharma industry for years.Small companies / inventors aspire to be acquired by big pharma to leverageits financial, regulatory and commercial capabilities to market the inventions andmaximize their value.The current partnering landscape has become increasingly competitive. Both selland buy side experience an intense pressure to be selected as the partner ofchoice. An effective partnership requires the understanding of each other’sperspective. The value of the initiative goes above and beyond the financialtransaction and could bring learning and growing opportunities.International alliances brings additional dimensions if both partners are willingto be creative in the deal structure leveraging each other core competencies. July 18-19, 2011|DRM BioPharmSource
  3. 3. Overview¨  Sell and Buy Side expectations/ perspectives¨  How to address the gaps, leveraging partner’s resources¨  Considerations to maximize the partnership July 18-19, 2011|DRM BioPharmSource
  4. 4. Rational for Partnership:Mutual Benefit : Incremental Value Drivers for collaboration :¨  Buy Side : Big Pharma ¤  High Value, fast speed, low cost innovation to fill the gaps of their pipeline n  Buy side is continuing to increasing its emphasis on late stage deals, shorter term revenues and lowered risk n  Partners selection based on institutionalized due diligence process for risk assessment. A seamless product introduction and reliable quality and supply as if the product is developed/ manufactured internally¨  Sell Side : Small Bio-tech/Start ups/Academia ¤  Commercial ( Sales, Marketing, P &R) Regulatory Capabilities, to market its invention and maximize its value n  Partners who can clearly demonstrate a credible value maximization, solid capabilities, risk sharing and creativity in deal structures. ¤  Financial Resources n  Sell Side, struggling with the balancing act of raising capital and the challenges to get regulatory approval may choose as a best alternative partnering/ selling out to cash rich big pharma ¤  Development of additional capabilities July 18-19, 2011|DRM BioPharmSource
  5. 5. What each partner brings to the tableSmall Companies Big PharmaRestless / Results oriented Reliable Business ProcessUnconventional/ Entrepreneurs Global Regulatory and Commercial StrengthsRisk affined Calculated risksInnovation minded Global Manufacturing Network CapabilitiesFlexible, adaptable Pursue differentiation as a competitive advantageExternal Funding Dependent High Financial resourcesBroad Network of Collaborators Established Business Process, Logistics, Supply Chain July 18-19, 2011|DRM BioPharmSource
  6. 6. What a partner continues to look for - value creation(Sell Side Companies Perspective)
  7. 7. Synergies and Gaps¨  There is synergy between the expectations of the sell side and the strategies of the buy side on : ¤  SellSide looks to complement the Regulatory and Commercial capabilities they are lacking ¤  Big Pharma continues to strengthen their commercial and regulatory capabilities. ¤  Deal structure considers expanded roles for licensors¨  GAPS: Both Sell side and Buy side Outsource R&D and Mfg. which may increase the risk of the initiative ¤  Big Pharma has increased the outsourcing of R&D and Manufacturing, placing more emphasis in selection of CMO’s and supportive entities for product development. n  Sell side could enable Buy Side resources to address this potential risk July 18-19, 2011|DRM BioPharmSource
  8. 8. How to address the gaps leveraging the partner’sresources?¨  Seek for synergistic/complimentary/ reliable partnerships in earlier stages ¤  Value Chain of Key players: CMOs/ Academia/CROs/others small to mid-size companies¨  Considerations ¤  CMO’s - Highly reputable, reliable quality and supply (Patheon, Catalent, DSM, Lonza, etc.) n  Using the partner’s network of strategic suppliers and global external supply resources n  Incentives n  Small company: De-risk due diligence process n  CMO: Commitment to M&S ¤  Academia- Low Cost, great reservoir of expertise n  Leverage on Pharma and Academia and Regulatory Agencies joint initiatives ( ex. Rutgers University -NSF Engineering Research Center on Structured Organic Particulate Systems n  Overcome the IP disputes that delays opportunities for collaboration ¤  CRO’s : Cost and Risk management of clinical studies n  Low Cost locations- Highly reputable CRO’s used by big Pharma n  Use of technology to predict rate of success of clinical studies §  BioVista §  Absorption Systems
  9. 9. Contract Manufacturing Organizations July 18-19, 2011|DRM BioPharmSource
  10. 10. Reputation:DSM and DSM Pharma are recognized for Innovation and Sustainability 2010 Dow Jones Sustainability World Index DSM #1 in the Global Chemical Industry 5 of 7 yearsDSM recognized June 2011 by Patent Board in the top ten (of 167) most innovative chemical firms due to ‘research intensity and industry impact’DSM Pharma received:¨  Profiles in Sustainability Award 2011 for Green Innovation¨  European Outsourcing Award 2010 for carbon footprint reduction¨  Profiles in Sustainability Award 2010 for Green Chemistry Toolbox¨  Safe Bridge Certification for handling of potent compounds Good Corporate Citizenship Endorse obligations in the chemical industry’s International Responsible Care® Program July 18-19, 2011|DRM BioPharmSource
  11. 11. Vertical integration:DSM is a Leading Global Provider of Custom Manufacturing andDevelopment Services for the Nutritional, Consumer and Biopharmabusinesses Pharma Chemicals Dosage Forms Biologics •  DPC: Custom manufacturing of •  DPI: Secondary manufacturing of •  DSMB: Custom manufacturing of API and Intermediates of sterile injectables, non-sterile biopharmaceutical ingredients •  Broad technology toolbox for liquids, and oral dosage forms •  Leaders in innovative process process innovation and •  Experts in technology transfer technology commercial manufacture projects July 18-19, 2011|DRM BioPharmSource
  12. 12. AcademiaJuly 18-19, 2011|DRM BioPharmSource
  13. 13. Partnership with Academia¨  Universities can be great partners: Great reservoirs of expertise at a lower cost -  Extensive instrumentation and modeling methodologies -  Inexpensive, highly trained labor (Graduate Students and postdocs) -  Forum for collaboration between Pharma and Regulatory Agencies¨  To maximize these positives:-  Overcome struggles about IP: -  Restrict the scope of the university contract to roles that are not likely to generate IP: perform measurements, obtain access to instrumentation, generate data, provide analytical services, etc.   Such services can be accessed through "service agreements” that are much faster to negotiate and do not compromise IP -  For scientific support, retain the academic as a consultant.-  Students, once they graduate, are excellent recruits that already know the company – and the company has a chance to get to know them while they work on company- sponsored projects July 18-19, 2011|DRM BioPharmSource
  14. 14. Partnership with Academia Resources of Big Pharma are dedicated to sponsor industry driven¨ research: ¤  Drug discovery ¤  Drug Delivery ¤  Quality by Design and Process Analytical Technologies ¤  Support for product/process development ¤  Participation in research consortia and centers Big Pharma often builds long-term alliances with academic institutions¨ of interest ¤  Eli-Lilly foundation $20 million gift to Purdue University to establish a center of excellence in pharmaceutical sciences ¤  Novartis $65 million award to MIT to develop continuous manufacturing technology ¤  J&J long term “partnership for innovation” with Rutgers in drug discovery ¤  Most Big Pharma-Rutgers University -NSF Engineering Research Center on Structured Organic Particulate Systems
  15. 15. Contract Research Organizations Innovative technologies to enableearly decision making, reduce the cost and risk of clinical studies July 18-19, 2011|DRM BioPharmSource
  16. 16. Absorption Systems:  A Comprehensive Preclinical CRO offeringToxicology Services    Innovative research tools and services to better predict human outcomes Lead   Candidate   Toxicology  &   FTIH  to   OpJmizaJon   SelecJon   Safety   Phase  II   Biowaiver  of  Human  Studies   Human  Bioequivalence  Study                    •    Clinical  Drug-­‐Drug  InteracJon  Studies      •    Significant  savings  in  development  Jme    BA/BE     Clinical  DDI   Cost  Comparison       Human  BE  study           In  vitro  study:  ≈$50k       In  vivo  human  BE  study:  ≈$250k                   Clinical  DDI  study     Discover  Clarity  in  Transporters:   In  vitro  study:    ≈$100k  to  assess     CellPort  Technologies®   mulJple  interacJons  (  transporters     Class  I  &  Class  III=61%  of  classified  drugs   and  CYPs)     FDA/EMA  experience     In  vivo  study:    ≈$100k  to  1M   Projected  savings  of  biowaivers  for  all   Enabling  waiver  of  clinical  DDI   depending  on  number  of   Class  I  &  Class  III  ≈$128M  to  150M   studies   interacJons    Absorption Systems Exton, PA US; Asia Sapporo, Hokkaido, Japan ; Western US -San Diego, CA www.
  17. 17. BioVista¨  COSS™ is a proprietary very large scale profiling technology specifically developed to address the need for pipeline value enhancement and improved patient cohort stratification.¨  It uses very large scale mechanism of action (M o A) profiling to generate four solutions: ¤  Find novel indications for any drug, beyond the ones they were initially developed for ¤  Identify novel, mature chemistries against targets and mechanisms ¤  Identify new biology and novel targets for diseases of interest ¤  Develop M o A- based patient cohort stratification and inclusion /exclusion criteria that may be used in RMPs by profiling M o A of AE’s of any drug prior to or during clinical trials¨  The technology helps prioritize and “kill” programs with elevated risks of MoA based attrition due to Safety or efficacyBioVista- SA Charlottesville, VA USA ; EU Ellinikon, Athens, GREECE
  18. 18. Partnership Value Creation July 18-19, 2011|DRM BioPharmSource
  19. 19. Maximization of Value Creation throughPartnership ( Sell Side) Buy-Side Resources increase the value to the Sell Side¨ Partner •  Commercial and Regulatory Global outreach •  Established business process •  Access to a global network of external suppliers already qualified •  Economies of scale through strategic CMO’s partnerships •  Reliable Supply Chain and Logistic Process •  Sponsored Academic research •  In house resources to International partners to monitor and July 18-19, 2011|DRM control Quality and EHS controls BioPharmSource
  20. 20. Terms and Conditions to ProvideGrowth Opportunities to Sell Side ¤  Retain responsibilities for worldwide technical support ¤  Retain commercial rights for strategic markets •  Build its own sales force •  Seek local markets partnerships ¤  Co-marketing opportunities, synergies between both partners portfolio July 18-19, 2011|DRM BioPharmSource
  21. 21. Buy Side - Alliances with local playersin International Markets offer¨  The potential to leverage local market partner’s resources: ¤  Untapped science resources in newer markets… n  India – Cardiovascular work, clinical study data gathering and analysis n  China – Chemistry, Chemical intermediates n  Eastern Europe - Clinical Research n  Latin America- Biotech, Clinical studies ¤  Treating diseases found primarily in newer markets¨  Strong local network: political/ regulatory/ commercial July 18-19, 2011|DRM BioPharmSource
  22. 22. In summary¨  Resources of Big Pharma enhance the value of the strategic partnership: ¤  Providing complimentary capabilities ¤  Enabling the use of a network of qualified collaborators ¤  Providing Access to global markets¨  Big Pharma could also benefit from alliances with local markets partners unique resources and competitive advantage in international markets¨  Each partner’s definition of value and expectations lay the basis for creative deal structures to achieve mutual benefit July 18-19, 2011|DRM BioPharmSource