A FREE guide to out-licensing in generic pharma (by Asa Cox)

A GUIDE: OUT-LICENSING in GENERIC PHARMA

What Who
Introduction

Step 1: Internal capability
Step 2: Market research
Step 3: Product selection
Step 4: Marketing strategy
Step 5: Sales strategy
Step 6: Client engagement
Step 7: Commercial essentials Asa Cox
Step 8: Heads of terms Founder - Genericlicensing.com
Step 9: Contract negotiation
Step 10: Post deal asa.cox@genericlicensing.com

Very Important to Remember Find me on:

VITR: 1 Communication
VITR: 2 Market intelligence
VITR: 3 Building a network
VITR: 4 Building trust

“ The future depends on what we do in the present” Ghandi
Step 7: Commercial essentials
Step 8: Heads of terms
Step 10: Post deal

Introduction
● Out-licensing is vital to the generic industry

● Companies of all sizes need new products to grow

● It is the most efficient mechanism to grow a portfolio quickly

● The premier route for internationalising a business

● Potential for supply to multiple countries with one client

● Needs strategic thinking and professional management

Asa Cox
Founder – Genericlicensing.com
asa.cox@genericlicensing.com

“ Coming together is a beginning. Keeping together is progress. Working together is success ” Henry Ford
Step 10: Post deal

Internal Capability
● What are the technical abilities of the development team?

● What formulation technologies are available to work with?

● What are the manufacturing constraints? (handling, dose form, machinery)

● What are the production capacities available?

● What international quality approvals are in place or planned?

● What regulatory expertise is in-house?

Asa Cox

“Wise men put their trust in ideas and not in circumstances” Ralph Waldo Emerson
Step 10: Post deal


Market Research
● Identify the products that are in demand
- Sales data (e.g IMS)
- Client 'wish lists'
- Future patent expiries
- Niche technologies

● Select the attractive markets
- Newly regulated markets (CEE, MENA)
- Improving healthcare standards (Asia, Russia, Latin America)
- Established generic markets. Higher volume, lower price.

● Discover the timelines target customers work to
- X years before patent expiry
- Y products within Z years
- ASAP

Asa Cox

“A spoonful of honey will attract more bee's than a gallon of vinegar ” Benjamin Franklin
Step 10: Post deal


Product Selection
● Determine the business strategy
- Best utilisation of manufacturing assets
- Focus on select technologies, therapy area or product type
- Lower risk, lower profit or higher risk, higher profit
- Financial and human resource requirements

● Outline timetable and milestones
- Balance risk, reward and probability
- Identify perfect client and likely product requirements

● Combine needs of local, regional and international demand

● Consider supply chain & customer performance expectations

Asa Cox

“Creativity is the natural extension of our enthusiasm” Earl Nightingale
Step 10: Post deal


Marketing Strategy
● Select which attributes of the company will help differentiate
- Price
- Quality
- Service
- Manufacturing
- Technology
- Management

● Create a plan that will create maximum awareness amongst clients
- Online engagement (LinkedIn, Twitter, Blogs etc)
- Direct email/post/fax/phone
- Partnering events and exhibitions
- Advertising & sponsorship of relevant publications & websites
- Networking
- Agent, Broker, Trader

Asa Cox

“Asking is the beginning of receiving. Make sure you don't go to the ocean with a teaspoon” Jim Rohn
Step 10: Post deal


Sales Strategy
● Define criteria for target clients
- Multi-country or local
- Market share or project value focused
- Preferred supplier program or deal-to-deal

● Establish sales objective
- Highest possible sales value
- Highest possible product volume
- Establish relationship with key clients
- One major deal or many deals with bigger network

● Sales proposition
- Lowest cost
- Best timeline
- Best legal position
- Best regulatory position
Asa Cox

“ The length of time it takes to reach your goal depends on the intensity of your desire” Michelle Ustaskeski
Step 10: Post dea


Client Engagement
● Provide all the essential information
- Formulation
- Strengths
- Development status
- Regulatory plan
- License fee structure
- Product cost structure
- Deal terms (exclusivity, duration, key clauses)

● Establish credibility
- Professional company presentation & website
- Customer referrals (if non-confidential)
- Outline company strategy and future plans

Asa Cox

“Always do your best. What you plant now, you will harvest later ” Og Mandino
Step 10: Post deal


Commercial Essentials
● Don't insist the customer gives you information first

● Give the customer 'draft' commercial information to work with

● Give batch size prices so the customer can make calculations

● Show an understanding of customer markets in proposals

● Provide timely and well detailed responses

● Get a clear decision making plan from the client

Asa Cox

“Life is a succession of lessons which must be lived to be understood” Helen Keller
Step 10: Post deal


Heads of Terms
● Detailed HoT saves a lot of time in wasted contract negotiation

● Outline all:
- Commercial terms
- Key roles & responsibilities
- Major clauses expected

● Create a formal signature document

● Liaise with legal team for contract continuity

Asa Cox

“Eyes & ears are your gateway to the world. Keep them wide open ” M.K Soni
Step 10: Post deal

Contract Negotiations
● It is OK to suggest using a client template
- Especially if a big client with separate legal process
- A poor or unprofessional contract will reflect poorly

● Start with a balanced contract
- Credibility & trust could be damaged with a very one sided draft

● Always attempt to find common ground & easy concessions

● Identify critical items and explain the reasoning for a strong position

● Attempt to understand cultural negotiation tactics

● Where possible; meet face-to-face for final negotiations

Asa Cox

“Opportunities are like sunrises – if you wait too long, you miss them” William Arthur Ward
Step 10: Post deal

Post Deal
● Establish a detailed action plan
- Regulatory
- Logistics
- Financial
- Manufacturing
- Legal

● Maintain contact at all times through implementation
- Licensing contact should maintain lead connection with client
- Responsibility for project through to delivery of product
- Clear channel of communication for problem resolution

● Find another product to discuss
- Use the momentum to begin discussion quickly
- Successful negotiation provides opportunity for another contract

Asa Cox

“Communication is the real work of leadership” Nitin Nohria
Step 10: Close deal


Communication
● Don't make the client chase
- Always communicate within agreed timelines
- Reliable response times help build confidence

● Bad news is better than silence
- Clients need information to make decisions
- Disappointing a client is better than frustrating them
- Openness and honesty is very well respected

● Make it easy to find your information
- Clients will have hundreds of emails daily
- Updated discussion documents or summary tables useful
- Creates a positive impression for the company

Asa Cox

“ The victorious strategist only seeks battle after the victory has been won. ” Sun Tzu
Step 10: Close deal


Market Intelligence
● Know your client
- Type of deals to they normally do
- Strong existing partner base or open to new suppliers
- Seeking to add more markets or existing market share
- First in, last out strategy or launch with the masses

● Know your product
- Supply chain costs likely to support price decrease
- Manufacturing challenges
- Opportunity for IP or market differentiation

● Know your competitors
- How many
- Launch timetable
- Likely cost position
- Relationships with target clients
Asa Cox

“What we hope to do with ease, we must first do with diligence” Samuel Johnson
Step 10: Close deal


Building a Network
● Always continue to grow client contacts
- May need options if key client pulls out
- All part of establishing company within market

● Seek to develop deep connections within major clients
- Regulatory, purchasing, supply chain, legal etc
- Helps with problem solving during new projects
- People may move to alternative clients

● Smaller clients may offer information
- About target clients
- About competitor products

● A strong network online enables quick and effective communication:
- Solicit feedback on new product ideas
- Gain access to client connections
Asa Cox

“Losers make promises they often break. Winners make commitments they always keep” Denis Waitely
Step 10: Close deal


Building Trust
● Business is about people
- Clients need to believe you will deliver
- License partners are strategically important
- Buyers have targets, objectives and bonuses to consider too!

● All projects will have problems
- Bad situations do not break strong relationships
- Demonstrate you value the trust of the client

● You will always have competitors
- Focus on building reliability as a key business foundation
- Key clients look to give more projects to trusted partners

Asa Cox

“ The secret of success is to be ready for an opportunity when it comes” Benjamin Disraeli
Step 10: Close deal


Summary
● Carefully select products to develop

● Understand the market from a client perspective

● Have clear sales and marketing strategy

● Make it easy for the client to do a deal with you (not just price!)

● Commit to: communication, quality information & openness

● Secure the future of your business through a trusted network

Asa Cox

Interested in Knowing More
● How to reach licensing clients worldwide
More
Strategic Generic Product Portfolio Selection
FREE
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resources ● How to be seen by major clients online

● International business development services

● Out-licensing consultancy services

Contact: asa.cox@genericlicensing.com
skype: asa_cox
tel: +44 (0)845 453 1376

A FREE guide to out-licensing in generic pharma (by Asa Cox)

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