Issue 18 September 2012 Business Development & Licensing...
Transcript of Issue 18 September 2012 Business Development & Licensing...
Business Development & Licensing Journal For the Pharmaceutical Licensing Groups
Issue 18 | September 2012 www.plg-uk.com
Biotech turns to strategic alliances as VCs flee
Licensing deals: make provision for termination
‘Small pharma’ may offer better partnerships
Striking a balance on off-label and unlicensed use
If constructed correctly, a partnership
should allow all parties to pool knowledge
and resources and mutually boost
capabilities. Depending on the deal signed,
the partnership can bring new drugs to
market faster or increase sales. The financial
benefits on both sides can be significant.
When a biotech company makes a decision
to enter into a partnership with either big
pharma or a small to medium-sized firm, it
needs to weigh up all the options. It must ask
whether the company is prepared to share
the same commitment as well as the risks.
During due diligence, a biotech company will
also look at the other company’s financial,
research, development, manufacturing and
marketing resources. Equally important is the
number of successful deals it has achieved.
However, they should be considering not
only signing a successful deal, but also the
chances to extend the success over the long
term for the benefit of both partners.
Open minded approachNow classified as a specialty care
pharmaceutical company, Ipsen has a broad
reach to biotechnology and other healthcare
companies. Some of the partnerships
achieved by Ipsen in the early years now form
the backbone of our operations today. Even
though the whole industry is vocal about
having an open innovation model and fosters
partnership, an organisation the size of Ipsen
must form partnerships to gain access to key
Partnering efforts can be a vital element to the long-term strategy of a biotech company. Small to mid-sized pharmaceutical companies can offer unique characteristics, making them a valid option for consideration.
By Pierre Boulud, Executive Vice-President, Corporate Strategy, Ipsen
competencies and sustain its growth. The
partnership gene goes beyond the business
development teams to include teams in
research, development, manufacturing and
commercial operations.
In addition to these partnerships,
Ipsen’s organic growth allows it to have
the sustainability it needs to search for
partnership opportunities.
In the early days, as now, the people
in charge of business development
opportunities entered into discussions with an
open mind and a willingness to collaborate to
mutual benefit.
In the ten years I have been at Ipsen, our
partnering discussions have held on to the
same spirit and flexibility. Indeed, our present
organisational structure allows for easier and
rapid access to decision-makers. We strive to
move partnering processes forward rapidly.
Our uniqueness extends to our ability
to offer flexibility and creativity in deal
structuring across in-licensing, out-licensing,
joint development, co-marketing and co-
promotion, as well as joint ventures including
spin-outs.
Four key differentiation features On exploring further, we believe that there
are four areas that set a medium-sized
company like Ipsen apart from big pharma
(see Figure 1).
• Dedicated teams – An agreement
between Ipsen and a biotech company
About the authorPierre Boulud was appointed a member of
Ipsen’s Executive Committee in June 2011.
He joined Ipsen in 2002 as a manager in
Corporate Strategic Planning and has since
held positions as General Manager of Ipsen
Spain and Vice-President of Corporate
Strategic Marketing. Pierre is an ESSEC
graduate and before joining Ipsen, he worked
as a Senior Consultant and Project Leader at
the Boston Consulting Group.
T: +33 1 5833 5291
How smaller companies can stand out from big pharma in deals with biotech firms
16 Business Development & Licensing Journal www.plg-uk.com
in 2011 suggests that fully dedicated and
committed teams were key to the deal.
As a business development team can
be relatively small, the same business
development director is usually present from
the first meeting to assess the opportunity
right up to the closing of the deal. This allows
minimises disruption during the transaction
process on the Ipsen side, and builds trust
with the partner by conveying consistent
messages throughout.
Team commitment also applies to the
wider project team, which includes specialists
from clinical development, market access,
regulatory and finance. Core members
from each team can be fully dedicated
to the project from the beginning of the
due diligence through to deal completion.
Again, this results in minimal disruption and
facilitates the building of open and honest
relationships and trust among the technical
teams.
• Business focus – Business commitment is the
second area in which a medium-sized company
can bring benefits to a biotech firm.
Due to the relatively small number of areas
of therapeutic interest at Ipsen, it is highly
unlikely that Ipsen will review its priorities or
become distracted. This translates into stability
and low risk for prospective biotech partners.
Any in-licensing opportunity selected by
Ipsen must fit well within the scope of our
therapeutic areas. A recent agreement for a
marketed product was signed because larger
potential partners could not give sufficient
confidence and visibility about the resources
allocated to the licensor. For the licensor it was
also about making sure that its partner would
be fully committed to maximising the value
potential of the drug.
• Top management involvement – A third
important area is the level of involvement
given to a potential transaction by top
management. As a mid-sized company, senior
management will have fewer conflicting
agendas and priorities. Key issues can be
discussed at the highest level, allowing speedy
execution and rapid closing of the terms.
Senior level management meetings on
strategic alliances are a key feature at
Ipsen every six months. When terms were
renegotiated with one of our long-standing
partners in early 2012, we stipulated that a
meeting between CEOs should take place.
This meeting led to the key discussion levers
being identified as well as the boundaries
to respect on both sides. The result was an
expedited, successful outcome. Enabling a
biotech company to access decision-makers
easily facilitates not only deal-making but also
successful alliance management.
• Flexibility – This can describe the
interaction among different teams and also
geographic agility.
Whereas Ipsen cannot make the high
investments of the larger companies, it
has deal engineering agility. During recent
discussions with a small biotech company,
The same business development director is usually present from the first meeting to assess the opportunity right up to closing the deal, which builds trust.
Figure 1: Ipsen’s structure
1 2
43
POSSIBLE DIFFERENTIATION
DEDICATED TEAMS
TOP MANAGEMENT INVOLVEMENT
BUSINESS FOCUS
FLExIBILITY
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www.plg-uk.com Issue 18 | September 2012 17
Ipsen was in competition with two larger
companies for a highly innovative, early
stage compound. Our proposal was a
co-development plan to retain the science
that was on their side, their involvement in
future tasks and mutual benefit from our
respective areas of expertise. This approach
was perceived as a favourable alternative to a
straightforward acquisition of the intellectual
property proposed by other partners.
Geographic agility in the deal structure
is also a way to differentiate companies
of Ipsen’s size. Biotech companies in the
US usually like to retain national rights to
maximise their potential value in case of
success. Ipsen’s geographic footprint can
provide them with a single partner to deal
with the geographic complexity outside
North America – Ipsen has a strong presence
in Europe, Russia, China and Brazil – while
having a co-promotion in the US.
Room for improvementMid-sized organisations are also confronted
with specific challenges. At Ipsen, these fall
into three categories.
As a smaller company we are seen as
agile, but are we agile enough given our
size? It is an asset that decision making can
be quick but it also must be well informed.
To tackle this potential pitfall a programme is
currently in place to review our governance
and make our processes more effective.
Small to medium-sized pharma firms
must strive to achieve a high level of
professionalism in order to compete with big
pharma. They will not have the same vast
pool of talent and expertise at their disposal
and so must focus on career development
and constantly be looking for fresh talent. At
Ipsen we have initiated a ‘People Review and
People Development’ programme to ensure
best use of our key talents.
Smaller pharma can also be guilty of
delusions of grandeur. Blue sky thinking
on deals is good, although creativity and
vision inevitably need to take a realistic step
backwards. Alternative financing is therefore
an option we adopt to allow us to consider
bigger potential deals.
ConclusionIpsen’s recent success suggests that
a small to medium-sized company is
a manageable and attractive asset to
biotech firms, allowing them to meet and
adapt to their requirements.
The selection process for partnering
with big or smaller pharma presents many
challenges; no hard and fast evidence has
emerged to enable objective assessment of
why one company should be chosen against
another as a biotech’s partner of choice.
However, the fact of the matter remains
that smaller organisations can bring a
competitive and differentiated value
proposal to most biotech companies.
Enabling a biotech company to access decision-makers easily facilitates deal-making and also successful alliance management.
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