Until recently, most deals were essentially transactional: A large company purchased technology from a smaller one, commercialized it, then paid royalties. But times have changed. For one thing, the playing field has become more equal. With easier access to money, smaller entities—for example, biotechnology, biomedical, or specialty pharmaceutical companies—are able to bring a product to market themselves. In effect, they're saying, "If you want our product, buy the company—or involve us more intimately in co-development or co-marketing."
Big Pharma is getting the message. "Larger companies are opening themselves up more to the insight contributions of small partners," says David Brinkley, senior vice president, commercial development for Theravance. "Just as these companies have understood the need to integrate functions to come out with a better product, they also realize that there's much to gain by tapping the acquired company's knowledge and wisdom. Integration is key."
This article identifies 10 tips for forging successful partnerships—10 things to keep in mind the next time your company heads down the acquisition or alliance trail.
1 Stay Strategically Aligned Tracy Lefteroff, global managing partner of PricewaterhouseCoopers' life sciences industry services, recalls the case of a large medical device company that embarked on an alliance with a smaller one. Soon after the deal was signed, a violent disagreement erupted between researchers in the smaller company and management of the larger one over marketplace trends and future strategic direction. It did not matter that the researchers had data from their advisory board of world-renowned experts to back up their conclusions; the other side refused to listen and insisted on charting its own course. Eventually, the partnership broke up over these irreconcilable differences.
In the world of partnerships, strategic congruence is next to godliness. Every deal should include a thorough review of each partner's strategic goals and an assessment of how well the partnership will meet those goals. If there's no match, there should be no deal.
Even when there is agreement on strategic goals at the beginning of a project, changing conditions can cause strategic rifts. Robert Wills, PhD, vice president of alliance management for Johnson & Johnson's (J&J's) pharmaceuticals group, recalls one such situation: