The document discusses creating and managing strategic alliances between pharmaceutical and biotech companies. It defines different types of alliances from informal collaborations to equity alliances and joint ventures. Key factors for successful alliance management include compatibility between partners, clear definition of rights and responsibilities, and creating joint value. Strategic alliances allow partners to gain new skills, resources, and market access while sharing risks and costs. Examples provided include alliances between Lilly and Genentech, Roche and Genentech, and MannKind and Sanofi.

1. Creating and Managing Alliances
Corporate Strategy
Thomas Mark
Yasmine Benlounes
Mathilde Béraud
Diane Bugeaud
Lucie Saby
Cecilia Sarrazin
Kevin Tran
Alexandre Trichies
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2. What are
alliances ?
Pharma
R&D: low
productivity
Biotech:
lack of
resources
BENEFIT
for both
● “A mechanism to access or transfer
technological knowledge and to facilitate
innovative efforts” (Baum et al)
● Inter-firm co-operative relationship:
2

3. Informal
collaboration
Contractual
Agreement
Non-equity
alliance
Equity
alliance
Joint-Venture
No contract,
Networking,
Barter
system
Control and
Degree of
integration
Licensing,
cross-
licensing
Joint R&D,
marketing…
Pool the
ressources
Higher level of
alliance:
A has a
consequent
number of
shares in B
A+B
=
A+B+C
Money and Time
Investment
Lilly and Genentech on Humulin
Roche and Genentech
GSK and Pfizer on OTC
The different types of alliances 3

4. Informal
collaboration
Contractual
Agreement
Non-equity
alliance
Equity
alliance
Joint-Venture
No contract,
Networking,
Barter
system
Licensing,
cross-
licensing
Joint R&D,
marketing…
Pool the
ressources
Higher level of
alliance:
A has a
consequent
number of
shares in B
The different types of alliances
Strategic Alliances
Control and
Degree of
integration
Money and Time
Investment
A+B
=
A+B+C
4

5. • 2015: 17 strategic alliances
with a total potential value
greater than
US$1 billion
• 2014: 12strategic alliances
• 2013: 5strategic alliances
Key figures overtime
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6. Why are alliances so important?
New skills
and
resources
Establish
standards
in market
Save
time and
money
Risk
sharing
Enter
new
foreign
markets
Face
patents
cliff
(expiry)Synergy
and
competitive
advantage
Develop
patents
Face
regulatory
changes
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7. Key to Successful Alliance Management
• Meets both organizations objectives and needs
• Performing due diligence
• Creating a flexible and understanding
agreement between both firms
- Relationship goals
- Contingency plans
- Agreement on resources/rights distribution
• Alliance should serve both sides in a beneficial way
• Create a positive and collaborative environment/culture 7

8. Key to Successful Alliance Management
Formation
Design and
Governance
Sustainability
• Compatibility
• Commitment
• Complementarity
• Agreement
• Relationship Structures
• Implementing agreement
• Development of trust
• Conflict resolutions 8

9. Key to Successful Alliance Management
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10. XenoGesis Ltd. & Juniper Pharma Services
● UK company
● Founded in 2011
● Independent CRO
Expertise: Drug metabolism and
pharmacokinetics
● UK company
● Acquired by Catalent
● CDMO
Expertise: Early phase development
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11. Failure Factors in Alliance Management
● Incompatible business strategy
● Unclear definition of rights and duties
● Unequal contributions of all partners
● Core competencies not upheld by both parties
● Low strategic flexibility
● Non-established coordination & information
● No joint value creation
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12. Responsible for :
Global commercial, regulatory
and development activities
Responsible for: Manufacturing
MannKind Corporation received
an upfront payment of $150
million and potential milestone
payments of up to $775 million
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13. Conclusion
● Strategic Alliance can be perceived as:
○ a success by one party and
○ a failure by another.
→ Partners should develop criterias that both
consider as key success factors.
● Overall alliance success or failure ≠ black or white.
● Each strategic alliance is unique and partners must
understand the uniqueness and management of the
alliance.
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14. Work Citations
Abbato, S., & Young, M. W. (2015, June 14). Process & Management of Strategic Alliances. Retrieved from https://www.bio.org/sites/default/files/Process and Management of Strategic
Alliances_Abbato & Young.pdf
Backhaus, K. (2015). The Role of International, Technological and Social Context in Considering Strategic Alliances in the Biotech–Pharmaceutical Industry. Organizational Management Journal,
12(3), 109-109.
Baum, J. A., Calabrese, T., & Silverman, B. S. (2000). Don't Go It Alone: Alliance Network Composition and Startups' Performance in Canadian Biotechnology. Strategic Management Journal, 21(3),
267-294.
Catalent corporate website. (2018, July 3) http://www.catalent.com/index.php/news-events/news/Catalent-Signs-Agreement-to-Acquire-Juniper-Pharmaceuticals-Inc. [Accessed in December 2018]
Contract Pharma Website. The Role of Alliances in Modern Drug Development. Retrieved from https://www.contractpharma.com/issues/2016-09-01/view_features/the-role-of-alliances-in-modern-
drug-development. [Accessed in December 2018]
Dadfar et al (2014). Strategic alliances in the Iranian pharmaceutical industry : an analysis of key
success and failure factors, 2014, Total Quality Management and Business Excellence, (25),
7-8, 812-826.
Deloitte. (2014). Strategic alliances in life sciences - Are you ready? Zurich.
Ernst and Young. (2016). Beyond borders 2016: Biotech deals.
KPMG. (2018). Strategic alliances: a real alternative to M&A?
MannKind Corporate Website (2014, August 11th). Retrieved from http://investors.mannkindcorp.com/news-releases/sanofi-and-mannkind-announce-global-licensing-agreement-afrezzar [Assessed
in December 2018]
Mittra, J. (2007). Life Science Innovation and the Restructuring of the Pharmaceutical Industry: Merger, Acquisition and Strategic Alliance Behaviour of Large Firms. Taylor and Francis Online.
Nicholson et al. (2005). Biotech-Pharmaceutical Alliances as a Signal of Asset and Firm Quality. Journal of Business, 78 (4), 1433-1464.
Niosi, J. (2003). Alliances are not enough explaining rapid growth in biotechnology firms. Research Policy, (32), 737-750.
Powell. (1998). Learning From Collaboration: Knowledge and networks in the biotechnology and pharmaceutical industries. CALIFORNIA MANAGEMENT REVIEW.
Powell, W. W. (1996). Inter-Organizational Collaboration in the Biotechnology Industry. Journal of Institutional and Theoretical Economics. 197-215.
Rasmussen. (2002). The Role of Pharmaceutical Alliances. Melbourne: Centre for Strategic Economic Studies.
Rothaermel, F. T. (2001). Complementary assets, strategic alliances, and the incumbent’s advantage: an empirical study of industry and firm effects in the biopharmaceutical industry. Elsevier.
Soares, B. (2007). The use of strategic alliances as an instrument for rapid growth, by New Zealand based quested companies. United New Zealand School of Business Dissertations and Theses.
Tradeready (2014, December 12th). 6 Reasons for forming strategic global business alliances
Retrieved from http://www.tradeready.ca/2014/fittskills-refresher/8-reasons-forming-strategic-global-business-alliances/ [Assessed in December 2018]
XenoGesis corporate Website. (2017, October 18th). XenoGesis invests in GastroPlus™ modelling and simulation software. Retrieved from https://www.xenogesis.com/xenogesis-invests-
gastroplus/. [Assessed in December 2018]
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15. Additional slides for questions
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