For a small healthcare company, partnering with a larger company is critical. Timing, balancing risk vs. reward is also critical. It tunrns out that there are objective researched parameters on the best stage to partner.

1. Why should a early-stage healthcare company strategic partner with larger,
regional or international, company?
Negative: may lose control of product and process.
Positives:
 Usually non-dilutive financing, do not lose control of company; in fact,
vivifies and makes company more credible and valuable to VCs. VCs want
late stage and/or partnered company.
 Get partner which has capabilities you would not have at early stage:
o GMP manufacturing;
o Marketing and knowledge of market;
o Clinical trial experience and personnel.
How to partner?
 Do it yourself with BD staff;
 Hire advisor;
 License BD database with and without consultation;
Ideal time to partner:
Torreya-Deloitte Recap Database (TDRD) shows progression of upfront
payments:
 Preclinical: $7.3million;
 Phase 1: $17million;

2.  Phase 2: $34.4 million
 Phase 3: $43million
 Registration: $60 million
 Approval: $102million.
Company must balance time, fund raising ability and critical requirements
by potential partners:
 Preclinical proof ;
 Clinical endpoints reached;
 CMC;
 IP robust;
 Large market need, high reimbursement , cost saving;
 Regulatory environment favorable;
 Company able to meet its obligations.
Bottom line: best time to partner, balancing risk and upfront, is as you
finish Phase 2.