Navigating Big Pharma: A Guide For Entrepreneurs

By Alejandro Zamorano, VP of Business Development, LSN

Every major pharmaceutical company has a business development team that is in charge of identifying new products and technologies to target for strategic relationships, in-licensing, or acquisition. We’ve discussed the increasing number of big pharma companies targeting earlier stage companies before, and we’ve noted how big pharma is allocating more dollars towards external R&D. These organizations can be extremely attractive to entrepreneurs because they offer a plethora of great resources including technical insight, market expertise, and fantastic infrastructure (not to mention highly sophisticated sales and marketing).

However, for many emerging biotech entrepreneurs, the challenge of navigating a big pharma to find the appropriate contacts is daunting and can be discouraging if approached blindly. This article is intended to share some insight into how to approach these organizations and how to navigate your way through to the right people.

So how should a fundraising executive begin thinking about a big pharma strategy? The first thing to understand is that business development teams are interested in talking to great innovative companies. However, in order to be effective, you must first find all of the big pharmas that are a fit. Often, big pharma sees the world on the basis of indication areas (e.g. an oncology program, or a CNS program), so a focus on a specific indication is typically a good starting point. To find out this information, take a look at press releases, announcements, news articles and of course the company website. With this information in hand, you can narrow down which companies are actively likely to be seeking to in-license or invest in products like yours.

Your next step is identifying the right people in the organization. Big pharmaceutical companies can have tens of thousands of employees around the world, so it’s up to you to do your homework on who to target. Sometimes you can quickly identify the right target on the company website, but usually a little more digging is required. Searching through linkedin or Zoominfo can be helpful in identifying the right people. Try using combinations such as “search & evaluation,” “business development,” or “asset licensing.” A little creativity and patience can go a long way. Aim for a list of at least 20 or so target individuals.

This is where email your email skills come in. We’ve covered the nuances of email marketing previously, but we’ll briefly cover the concept here. The goal of your first email should be used to initiate dialogue, identify the right person to speak with, and hopefully arrange an introductory meeting. Some best practices are keeping your message clear and succinct and clearly state that you have done your research and believe there may be a fit. Be sure to make it clear you’d like a meeting with the appropriate person, and offer some available times.

If all has gone well, you’ll probably get a handful of responses or referrals to other people in the organization. However, don’t forget about those that didn’t reply – you can come back to these with “second attempt” or “final attempt” emails later to create a sense of urgency. The first person you hear back from will often be either a gatekeeper or an information gatherer. These parties will take a first pass on whether or not the conversation should continue. Clearly explain what research you’ve done, confirm your findings, and why you think you are a fit. Big pharma usually has a clear idea of what they are looking for, so explaining why you match their interests is crucial.

If the conversation goes well, you’ll likely be passed on to a navigator (someone who will help guide you through the evaluation process) or an evaluator. The evaluator(s) will examine your data and will ask you questions about your asset to determine whether it should be passed up the chain of command. If your product matches what the company is looking for and has passed the evaluation criteria, you will be recommended to the decision maker. This can be a single person or a group of senior executives. They are the ones with the final authority to get a deal done and write you a check.

Here are few concluding thoughts to help your efforts: First, make sure you are proactive and do not let things sit idle: Always find out what the next steps are and how to get to the next person in the chain. I’ve heard countless stories of entrepreneurs losing focus and letting the conversation go silent. This is almost always the kiss of death, so remember that it is your responsibility to move things forward. Second, do some research on other companies that recently struck a deal with one of your target pharmas. Asking for guidance or insight from them may help you be more prepared. Keep these items in mind and you’ll significantly improve your odds when approaching big pharma.