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Business Development Management Introduction
Introduction to Business Development
Tarek Ibrahim
Arabio Business Development & Strategic Alliance Manager
Introduction
 The increasing discussion about rising
healthcare cost is fueled by reports that
General Motors paid more for healthcare
than for steel per vehicle in 2004 (Ref 1), and
Starbucks paid more for health insurance
than for coffee in 2005 (Ref 2).
 The continuing rise in development costs
for drugs has increased pressure on R&D
organizations to contribute to higher
efficiency in the overall process of coming
up with new drugs.
1. M. Cervantes (12 August 2004). http://www.AutomotiveForums.com
2. USA Today (15 September 2005).
Introduction
 In the last few years the industry has
made significant efforts to address these
challenges (Ref. 3) and to increase the
productivity of the drug development
process.
 Examples are the earlier determination of
a drug’s toxicology profile and early tests
to investigate the suitability of a new drug
candidate for oral administration or once a
day dosing.
MBorman, S. (2006). Improving Efficiency. Chemical & Engineering News, 84(25), 56-78.
 Active portfolio management is
fundamental to setting the direction
for major companies in determining
their in licensing objectives.
 Portfolio management describes the
process of maximizing the value of
R&D portfolios through proper
resource allocation.
Introduction
 This requires an alignment of portfolio management
with strategic business objectives. Such objectives
should not only be general (e.g., innovation) and
quantitative (e.g., ROI or sales targets).
 They should also define disease areas of interest,
clearly outline the remaining medical needs, and specify
the indications that are considered worth pursuing.
 This will enable decision makers and functional R&D
managers to identify projects with both strategic fit and
a high value proposition.
Introduction
Major Business Challenges
Major Business Challenges
 Increasing the business performance to enhance competiveness.
 Achieving customer loyalty.
 Managing supply chain risks and increasing commodity costs.
 Improving information for decision-making by focusing on data
management and analytics.
 Managing regulatory change.
 Attracting, retaining and developing top talent.
 Realizing bottom-line value in mergers and acquisitions.
 Managing enterprise risk.
The Role
of the Business Development Manager
The Role
of the Business Development Manager
A Business Development Manager works to improve an
organization’s market position and achieve financial growth.
1. Search and identify on strategy opportunities - product
or partner candidates.
2. Coordinates and drive the due diligence process.
3. Determine a valuation of the given opportunity.
4. Leads and / or supports the negotiations.
5. Direct and / or guide the implementation / integration
of the new business opportunity.
6. Manages the partnering process.
Business Development Functions
in Pharma Company
Alliance
Management
Deal
Transaction
EvaluateDefine
Business Development in
Different Companies
Business Development in
Different Companies
1. Corporate Business Development in Major Companies
 Usually carries responsibility for corporate business
development i.e. bringing in the global opportunities
either at an early or clinical stage of development.
 Identify new pipeline opportunities to in license into the
company.
Business Development in
Different Companies
2. Business Development in Operating Units
 Have a more localized role, i.e. to maintain the portfolio
on a local basis. This will include in licensing or
divestment of local products, identifying co marketing or
co promotion opportunities that will maximize the use of
the company’s sales representatives’ time in that specific
market.
 As this role is primarily a commercial one, business
development executives will normally have marketing
background.
Partnering Strategy
Partnering Strategy
 In licensing is very widely employed by companies of all sizes
to augment their project and product portfolios.
Rationale for in Licensing
 The need to supports product portfolios.
 To supplement and fill gaps in R & D pipelines.
 Gain rapid entry into a new therapeutic field or market.
 Secure access to a certain skill set required for taking the
technology forward i.e. clinical expertise, manufacturing
capability, sales and marketing.
 Secure scientific credibility for a novel technology.
 Gain cash for the company’s future or for other pipeline
developments.
Rationale for Out Licensing
Historically,in major companies out licensing has tended to carry less
importance than in licensing whereas in contrast it is an essential feature for
Business Development personnel in small and biotech companies.
 Raise cash for development of the biotech company’s
pipeline.
 Leverage partner company’s expertise e.g. in clinical
development or marketing.
 Gain access to markets outside the companies territorial
reach.
 Freeing up resources for other higher priority projects.
 Sharing risk in a high risk therapeutic area.
 Passing on future development costs for example in a major
therapeutic area e.g. cardiovascular or diabetes.
Strategies
of Business Development
in the Pharmaceutical Industry
 According to the World Health Organization, the global
pharmaceuticals market in 2013 is estimated at $300 billion
annually. The figure will rise to $400 by 2016.
 Six of the 10 largest drugs companies are in the United
States.
 To maintain high sales volumes and stay profitable,
companies in the industry can employ a number of business-
development strategies.
Introduction
World Health Organization: Pharmaceutical Industry
Partnerships and Mergers
 Partnerships and outsourcing are a daily occurrence in
the pharmaceutical industry.
 Seeking for and actualizing sustainable mergers is a
good business development strategy for a
pharmaceutical company.
 Management Center Europe reports that mergers of
pharmaceutical companies will contribute more than 50
percent of the industry’s future growth in the global
markets. By combining their resources, pharmaceutical
companies leverage their strengths to increase market
share and influence.
Technology-Based Strategies
 Investing in technological innovations is a profitable business
strategy for a pharmaceutical business.
 Trends such as increasing competition, globalization, and
shorter product-cycle times are real challenges for the
industry.
 Technological innovations enable a pharmaceutical company
to deal with these challenges by reaching more consumers
and suppliers, receiving instant feedback at a cheaper cost.
 One such strategy is using e-detailing, whereby a company
communicates a product’s details on the Internet.
Operational Marketing and Sales
 An operational marketing and sales strategy is
paramount for a pharmaceutical company’s growth and
profitability.
 A report by the U.S. Bureau of Statistics in October
2011 indicated that the total value of pharmaceutical
drugs consumed in the U.S. market went up by 37
percent from 2003 to 2009.
 A marketing and sales business development strategy
helps U.S. pharmaceutical firms to take advantage of
the growing market.
New Markets Access
 Accessing new and functioning
markets is a critical business strategy
in the highly competitive
pharmaceuticals industry.
 Emerging global markets present a
good opportunity to pharmaceutical
companies.
 A report released by MCE in 2012
estimates that 80 percent of the
economic growth in the next decade
will arise from emerging markets.
ManagementCenter Europe: New Opportunities & Strategies in the PharmaceuticalIndustry
SOPs
in Business Development
SOPs
in Business Development
 Screening for new IP.
 The management of confidential data.
 The partnering decision making process.
 assessing new opportunities.
 Formal due diligence including regulatory and
technical site visits.
 Pharmacovigilance.
Key Performance Indicators
in Business Development
Key Performance Indicators
in Business Development
 Number of opportunities identified each year.
 Number of opportunities evaluated post CDA.
 Efficiency of review of opportunities.
 Proportion of deals aligned with strategy.
 Number of deals signed.
 Proportion of deals failures.
 Financial measures: NPV, Sales…etc
1st  Riyadh Marketing Club (Introduction to Business Development Management) byDr. Tarek Ibrahim
1st  Riyadh Marketing Club (Introduction to Business Development Management) byDr. Tarek Ibrahim
1st  Riyadh Marketing Club (Introduction to Business Development Management) byDr. Tarek Ibrahim

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1st Riyadh Marketing Club (Introduction to Business Development Management) byDr. Tarek Ibrahim

  • 2.
  • 3. Introduction to Business Development Tarek Ibrahim Arabio Business Development & Strategic Alliance Manager
  • 4. Introduction  The increasing discussion about rising healthcare cost is fueled by reports that General Motors paid more for healthcare than for steel per vehicle in 2004 (Ref 1), and Starbucks paid more for health insurance than for coffee in 2005 (Ref 2).  The continuing rise in development costs for drugs has increased pressure on R&D organizations to contribute to higher efficiency in the overall process of coming up with new drugs. 1. M. Cervantes (12 August 2004). http://www.AutomotiveForums.com 2. USA Today (15 September 2005).
  • 5. Introduction  In the last few years the industry has made significant efforts to address these challenges (Ref. 3) and to increase the productivity of the drug development process.  Examples are the earlier determination of a drug’s toxicology profile and early tests to investigate the suitability of a new drug candidate for oral administration or once a day dosing. MBorman, S. (2006). Improving Efficiency. Chemical & Engineering News, 84(25), 56-78.
  • 6.  Active portfolio management is fundamental to setting the direction for major companies in determining their in licensing objectives.  Portfolio management describes the process of maximizing the value of R&D portfolios through proper resource allocation. Introduction
  • 7.  This requires an alignment of portfolio management with strategic business objectives. Such objectives should not only be general (e.g., innovation) and quantitative (e.g., ROI or sales targets).  They should also define disease areas of interest, clearly outline the remaining medical needs, and specify the indications that are considered worth pursuing.  This will enable decision makers and functional R&D managers to identify projects with both strategic fit and a high value proposition. Introduction
  • 9. Major Business Challenges  Increasing the business performance to enhance competiveness.  Achieving customer loyalty.  Managing supply chain risks and increasing commodity costs.  Improving information for decision-making by focusing on data management and analytics.  Managing regulatory change.  Attracting, retaining and developing top talent.  Realizing bottom-line value in mergers and acquisitions.  Managing enterprise risk.
  • 10. The Role of the Business Development Manager
  • 11. The Role of the Business Development Manager A Business Development Manager works to improve an organization’s market position and achieve financial growth. 1. Search and identify on strategy opportunities - product or partner candidates. 2. Coordinates and drive the due diligence process. 3. Determine a valuation of the given opportunity. 4. Leads and / or supports the negotiations. 5. Direct and / or guide the implementation / integration of the new business opportunity. 6. Manages the partnering process.
  • 12. Business Development Functions in Pharma Company Alliance Management Deal Transaction EvaluateDefine
  • 14. Business Development in Different Companies 1. Corporate Business Development in Major Companies  Usually carries responsibility for corporate business development i.e. bringing in the global opportunities either at an early or clinical stage of development.  Identify new pipeline opportunities to in license into the company.
  • 15. Business Development in Different Companies 2. Business Development in Operating Units  Have a more localized role, i.e. to maintain the portfolio on a local basis. This will include in licensing or divestment of local products, identifying co marketing or co promotion opportunities that will maximize the use of the company’s sales representatives’ time in that specific market.  As this role is primarily a commercial one, business development executives will normally have marketing background.
  • 17. Partnering Strategy  In licensing is very widely employed by companies of all sizes to augment their project and product portfolios.
  • 18. Rationale for in Licensing  The need to supports product portfolios.  To supplement and fill gaps in R & D pipelines.  Gain rapid entry into a new therapeutic field or market.  Secure access to a certain skill set required for taking the technology forward i.e. clinical expertise, manufacturing capability, sales and marketing.  Secure scientific credibility for a novel technology.  Gain cash for the company’s future or for other pipeline developments.
  • 19. Rationale for Out Licensing Historically,in major companies out licensing has tended to carry less importance than in licensing whereas in contrast it is an essential feature for Business Development personnel in small and biotech companies.  Raise cash for development of the biotech company’s pipeline.  Leverage partner company’s expertise e.g. in clinical development or marketing.  Gain access to markets outside the companies territorial reach.  Freeing up resources for other higher priority projects.  Sharing risk in a high risk therapeutic area.  Passing on future development costs for example in a major therapeutic area e.g. cardiovascular or diabetes.
  • 20. Strategies of Business Development in the Pharmaceutical Industry
  • 21.  According to the World Health Organization, the global pharmaceuticals market in 2013 is estimated at $300 billion annually. The figure will rise to $400 by 2016.  Six of the 10 largest drugs companies are in the United States.  To maintain high sales volumes and stay profitable, companies in the industry can employ a number of business- development strategies. Introduction World Health Organization: Pharmaceutical Industry
  • 22. Partnerships and Mergers  Partnerships and outsourcing are a daily occurrence in the pharmaceutical industry.  Seeking for and actualizing sustainable mergers is a good business development strategy for a pharmaceutical company.  Management Center Europe reports that mergers of pharmaceutical companies will contribute more than 50 percent of the industry’s future growth in the global markets. By combining their resources, pharmaceutical companies leverage their strengths to increase market share and influence.
  • 23. Technology-Based Strategies  Investing in technological innovations is a profitable business strategy for a pharmaceutical business.  Trends such as increasing competition, globalization, and shorter product-cycle times are real challenges for the industry.  Technological innovations enable a pharmaceutical company to deal with these challenges by reaching more consumers and suppliers, receiving instant feedback at a cheaper cost.  One such strategy is using e-detailing, whereby a company communicates a product’s details on the Internet.
  • 24. Operational Marketing and Sales  An operational marketing and sales strategy is paramount for a pharmaceutical company’s growth and profitability.  A report by the U.S. Bureau of Statistics in October 2011 indicated that the total value of pharmaceutical drugs consumed in the U.S. market went up by 37 percent from 2003 to 2009.  A marketing and sales business development strategy helps U.S. pharmaceutical firms to take advantage of the growing market.
  • 25. New Markets Access  Accessing new and functioning markets is a critical business strategy in the highly competitive pharmaceuticals industry.  Emerging global markets present a good opportunity to pharmaceutical companies.  A report released by MCE in 2012 estimates that 80 percent of the economic growth in the next decade will arise from emerging markets. ManagementCenter Europe: New Opportunities & Strategies in the PharmaceuticalIndustry
  • 27. SOPs in Business Development  Screening for new IP.  The management of confidential data.  The partnering decision making process.  assessing new opportunities.  Formal due diligence including regulatory and technical site visits.  Pharmacovigilance.
  • 28. Key Performance Indicators in Business Development
  • 29. Key Performance Indicators in Business Development  Number of opportunities identified each year.  Number of opportunities evaluated post CDA.  Efficiency of review of opportunities.  Proportion of deals aligned with strategy.  Number of deals signed.  Proportion of deals failures.  Financial measures: NPV, Sales…etc