Managing Risk and Growth through Strategic Alliances and Partnerships

Monday 1st of April 2002 8:00

Managing Risk and Growth through Strategic Alliances and Partnerships

With access to private and public capital severely limited, the options available to grow a company are very restricted. There is, though, one option still available - setting up strategic alliances with other Pharmaceutical or Biotech companies. The advantages are many: deals can be used creatively as a means of raising finance; partnerships are reversible (whereas M&A is not); partners of equal size can capitalise on synergies without losing management control; collaborations with Big-Pharma companies provide credibility and know-how. With Pharma's need for compounds to fill the pipeline has never been greater; a gap the Biotechs can fill. The question remains: how to put together alliances successfully?

Given the objective of maximising shareholder value, many companies with clinical products face difficult decisions: should they partner off their product, hold onto it and continue to develop independently, or sell the asset? How could a relationship be sourced and managed?

In particular the following issues will be examined:

• Are the interests of shareholders best served by looking for an alliance
• How can you ensure you are getting be best price/value from the alliance?
• Should you go for cash early or retain rights for long-term profit
• How fund managers and other investors measure the value created by an alliance
• To what extent can you pool resources and risk-share in order to spread R&D costs
• Dividing responsibilities, risks and rewards equitably in a partnership between firms of different sizes - an impossible task?
• Is it possible to reduce the complexity of the deals or does this expose you to too great a risk?
• Is the amount of due diligence required prohibitively high?
• Are Biotech firms better off partnering with other Biotech firms or with Pharma: sourcing the most appropriate partner
• What is Big Pharma looking for and how do their objectives conflict with Biotech?
• The evolution of alternative Biotech models - can they go it alone and who are the end-customers?

Outstanding speaker panel

David Cavalla - Chief Executive Officer Arachnova

Following his studies at Cambridge University, UK and post-doctoral research in Washington, USA, David Cavalla joined Glaxo Group Research, where he was involved with the research projects that led to the marketed drugs Zofran and Imigran. Subsequently, as Head of Biosciences at Napp Research Centre, he initiated the PDE4 inhibitor project and directed the research strategy for asthma. This work, from discovery to clinic, was the first example of a successful research project carried out using an extended enterprise strategy, completed with the use of externally contracted resources co-ordinated by a small team of multi-disciplinary project managers.

Kevin J FitzGerald - Chief Executive Officer Isogenica

Kevin has substantial experience of the science and commercial exploitation of molecular evolution technologies. Prior to establishing Isogenica Kevin was a member of the senior management team at Actinova Ltd having previously spent 7 years at Cambridge Antibody Technology Ltd. where he was among the founding group of scientists. Dr FitzGerald studied for his PhD at the MRC laboratory of Molecular Biology, Cambridge and for his MBA at Aston Business School, following receipt of a Sainsbury Management Fellowship from the Royal Academy of Engineering.

Dr Julian White - Chief Executive Officer Genapta

Julian has worked in a number of engineering roles, managing a range of new product design and introductions over the last decade. For the last five years he has been developing optical sensors for the semiconductor and biotech industries. genapta was founded in 2001 in order address the potential of transferring techniques widespread in the telecommunications sector to Life sciences. genapta currently serves the genomic and pharmaceutical industries with both OEM and bespoke turnkey systems for state of the art fluorescence measurements.

Tony Baxter - Chief Executive Officer Argenta

Dr Anthony D Baxter CChem FRSC is the Chief Executive Officer and one of the founders (in 2000) of Argenta Discovery Ltd. Argenta is a specialist medicinal chemistry company that provides high quality contract services to the pharmaceutical industry and also produces validated leads for pre-clinical development which can be licensed by partners. Before joining Argenta, Dr Baxter was Chief Scientific Officer with Oxford Asymmetry International Ltd (1995-2000) where he set up and managed the Discovery Services Division- a group of some 120 staff. Evotec, the Germany based screening technologies company purchased OAI in 2000 to form the combined EvotecOAI company. Prior to OAI, he was Research Manager at Ciba’s UK Central Research Laboratories (1990 – 1995) where he managed Ciba’s ‘blue-sky’ research interests and before that, he was Team Leader at Glaxo Group Research (1983-1990). Dr Baxter completed his PhD with Prof. Stan Roberts on prostaglandin chemistry at Salford University. His main interests are the development of new chemical entities, particularly antivirals and in metabolic disease, new chemical technologies including solid phase synthesis and robotics, and antisense and carbohydrate chemistry. 

Rod Richards - Chief Executive Officer Microscience

Rod has significant business development and commercial management experience in senior management positions with both GlaxoWellcome and SmithKline Beecham. As Head of Licensing Global Business Development at GW, he completed successful deals with biotechnology companies and commercial partnering agreements with multinational pharmaceutical companies. Previously at SB, he directed the commercialisation plans of key R&D assets through to global launch.

Nigel Low - Director of Business Development Ionix Pharmaceuticals

Since April 2002 Nigel has been the Director of Business Development for Ionix Pharmaceuticals.  He was previously an Associate with McKinsey & Co, consulting on strategy and licensing in pharmaceutical and biotechnology practices. Prior to joining McKinsey, Nigel held R&D Strategy and Business Development positions at GlaxoWellcome in Europe and the USA. He has led product in/out-licensing, strategic alliance, and spin-out transactions in healthcare. He started his business career with Boston Consulting Group. Nigel holds a Ph.D. in Molecular Biology from MRC Laboratory of Molecular Biology, Cambridge, and B.Sc. in Biochemistry from University of Sydney.

About the Network for Senior Executives

in Pharmaceuticals (NSEP)

NSEP is a leading forum for senior executives within the Pharmaceutical Industry to meet regularly and discuss the major issues affecting the industry. The topics discussed are both those within the industry, such as drug delivery, or external factors affecting the industry such as the decline in equity markets worldwide.

NSEP gives a forum for these discussion in 3 major ways:

Firstly, our regular networking evenings, open to members and non-members alike, provide an excellent platform for senior executives to discuss the major issues of the day and to network. The events feature outstanding industry speakers and are attended exclusively by senior executives from the pharmaceutical industry.

Secondly, NSEP publishes a regular newsletter examining some of the major issues of the day. The articles go into a depth of coverage and argument not always possible in a live forum.

Finally, NSEP maintains a discussion forum and resource centre on the website. NSEP members are encourage to submit articles for publication in the newsletter and on the online discussion forum.

If you have any enquiries about NSEP activities or membership, please email philip.hague@nsep.org  or call 01923 256585. We look forward to hearing from you.

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Related Web-Links

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• Strategic Partnering in Asia: A Recipe for Success
• Strategic Alliances & Positioning
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• Slide 1 - Cipla

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