Big Pharma Investing In Early Stage Assets

11 Feb

By Shaoyu Chang, MD, MPH,  Senior Research Manager, LSN

Shaoyu 10*10

Biopharma deal-making value hit a record high in 2015. Where do things go from here? What emerging technologies are big pharma companies now excited about? At the opening of 2016, big pharma executives gathered at RESI San Francisco to shed some light on these questions.

Moderated by Kevin Lynch, Vice President of Scientific Assessment at Abbvie, panelists include:

  • Jason Coloma, Vice President and Global Head Roche Partnering Oncology, Roche Partnering
  • Lesley Stolz, Senior Director of Transaction, Johnson & Johnson Innovation
  • Marc Schwabish, US Head, Pharma Business Development & Licensing, Bayer
  • Tomas Landh, Vice President, Senior Principal Scientist Innovation Sourcing, Novo Nordisk

Big Pharma Continues to Seek External Innovations

With emerging fronts such as gene editing, immunotherapy, and digital health, the evolution of healthcare technology is faster than one can keep up with. Big pharma companies are closely observing the trend and seeking innovations to fill the gaps in their pipeline. For example, a team at Roche Partnering has mapped out and gone through every single one of the 450 cancer immunotherapy biotech companies in the Bay area to find potential partners. The panelists expect this trend to continue through 2016.

Early Collaborative Models Become Mainstream

As big pharma companies are heading earlier into phase 1 and preclinical, they are getting onboard with the idea of utilizing their resources to help early stage teams answer key questions without many strings attached. Creative models of collaboration are employed. Johnson & Johnson has set up Innovation Centers around the world as a centralized channel to source innovations. Bayer’s Co-Laborator research incubator is another good example to share resources and foster collaborative relationship with early stage teams.

Understanding the Process

When engaging with big pharma partners, one of the the most significant pieces of advice from the panelists is to understand their internal process. “The least productive way is to contact our chairman,” said Tomas from Novo Nordisk. In many big pharma companies, the business development or partnering team acts as the first point of contact and will refer you to the right person.

While many big pharma companies are trying to encourage transparency, a clear understanding of the review process, key checkpoints and key decision makers will help you go a long way. For example, a good confidential disclosure agreement (CDA) will facilitate due diligence process while preventing intellectual property pollution, and a material transfer agreement (MTA) can allow big pharma to replicate key data. On the other hand, several startups request a non-binding term sheet, which frequently add un-necessary challenge as it requires sign-off from senior management.

Best Practice in Reaching Out to Big Pharma

  • Do your homework. Do not pitch big pharma partners with the same pitch for VCs. Focus on how you differentiate and fit in to big pharma’s pipeline. Contact big pharma’s partnering team to get advice before you pitch. Ask them, what are you looking for? How should I pitch? How can I make a good impression on you? They are there to help you.
  • Many big pharma companies are now sharing notes and communications internally using databases. Sometimes, a company opens discussions with different groups within the same organization about different projects; it does not bring additional value to “shop” around different persons.

Understand big pharma’s approval process. Who are the key decision makers? What do they like to see in terms of validation and milestones? Take the necessary steps to protect your IP while nurturing a long-term, collaborative relationship. This panel video will give you useful tips; here are a few additional things to consider in building big pharma partnerships.

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