Understanding a Pharmaceutical Company’s Internal Review Process

28 May

By Michael Quigley, Director of Research, LSN

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In order to provide our readers with a glimpse into the big pharma internal review process for collaborations and in-licensing, I recently sat down with an ex-sourcing executive from such a group. He stated that the process generally takes from 6 to 9 months from the initial contact, but can last longer as the company goes through a series of both internal meetings as well as meetings with the external innovators. The primary sources for innovation include both partnering and scientific conferences, (particularly for early stage technologies) as well as investors and bankers (particularly for later stage technologies that have already garnered some clinical data). It is generally members of both the scientific or technical review and business development teams who attend these events, speak directly with external partners, and are responsible for identifying these new opportunities.

Once an initial contact is made, if there is interest on the pharma company’s end, they will ask to review the pitch deck and executive summary, which should provide a clear description of the technology. This process of review is led by the business development team, and they manage the technical team that actually reviews the scientific merit of the innovation. Also during this time, there often is another scientific management team that is reviewing the strategic value that the innovation holds, given the pharma company’s current pipeline and strategy. Late stage assets generally get into this process sooner and involve a bigger team on behalf of the pharma company than preclinical opportunities, but that timeline can also be a function of the pharma’s interest in the technology.

If sufficient interest is garnered at this stage, the review will also include legal teams looking into the IP of the technology, regulatory teams evaluating clinical challenges and advantages, as well as a commercial viability team looking into commercial market factors. A solid pitch deck should provide information relevant to all of these teams who might be a part of this process. From here the pharma company will schedule a call (generally led by the business development team along with a technical scientist or others) to plug any holes that the pitch deck may have. If all goes well in this call, a face-to-face meeting will be arranged as a next step. These often take place at conferences where both parties are in attendance or mutually agreed-upon locations.

This face-to-face meeting will serve to answer any additional questions either party may have, as well as to give the big pharma company a stronger feel for the management team, especially in cases when a collaboration is being considered. At this point, at least several weeks from the initial contact, the pharma company may look to set up a data room and, if necessary, sign a CDA for the opportunity. By having a data room already set up with the relevant materials, you can help to expedite this process. Due to the number of opportunities that a pharma group may review in a given year, they often are not willing to sign a CDA until they have achieved this level of interest, to avoid excessive legal liability.

From here the internal review team will pull together a formal report on the opportunity to present to upper management, who will ultimately be making the final decision. The drafting and review of this report can be laborious, further lengthening the time required to finalize a deal. Often, in reviewing the strategic relevance of the opportunity, upper management will ask their internal review team to gather more information from the company, adding more weeks to the process. Once upper management has given the green light, lawyers from both sides will begin drafting the contract, a document that can be hundreds of pages in length and can take weeks or months to finalize.

If there is one key takeaway from this piece, it should be that the time this process requires is lengthy, so patience is necessary. This also speaks to the importance of entrepreneurs starting dialogues with potential investors early. As there is a very real possibility that, even toward the last phases of the process, the deal will fall through, it is an astute business practice to engage with multiple potential pharma partners simultaneously.

The more you can understand the internal process a pharma company maintains to review technologies, the better your chances of success. I hope this article was able to provide you with some new insights into that process, and I wish you the best of luck in your endeavor!

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