Patent Research as a Key Strategy Tool

Sep 10, 2018

Paras Kumar examines the critical role that patent research has within the life sciences and pharmaceutical businesses beyond its traditional uses by the R&D and legal departments but also for procurement and strategy.

Life sciences, pharma and healthcare companies have been filing and studying patents for a long time to protect their technologies, earn premium on their products and gain a scientific and competitive edge.

However, many business functions inside organizations have not yet recognised the value patent research can bring to their wider decision-making. For example, it can be used as a key business tool for making procurement- and strategy-related decisions by deriving dynamic insights from early indications about future strategies of competitors or suppliers and understanding innovation trends within a category.

We work with many leading life sciences and pharma companies to help them take a different approach to patent research that takes on a more strategic role for the organization and delivers broader value.

We see two main type of patent research

  1. Core patent analytics – aimed at R&D teams, new product development teams and patent counsel. This type of analysis includes competitive intelligence, patent landscaping, freedom to operate, clearance searches, validity searches and patentability assessments.
  1. Business driven patent research – although aimed in the first instance at procurement or category leaders, it has value for innovation and strategy. This includes target/ supplier/ competitor intelligence and benchmarking, product and technology strategy research, technology trends and white space analysis, disruptive innovations and market analysis.

Key business areas for patent research application

We have identified four main business areas other than the usual applications where life sciences and pharma companies can find patent analysis particularly useful: innovation scouting, partner identification, sourcing strategy and market exploration and category strategy.

Below we discuss in more detail each of these areas:

1. Innovation Scouting

An area where patents can add tremendous value is innovation scouting. As an example, we worked with a global healthcare company  that wanted to identify different types of automatic dispensers for baby and paediatric OTC products and their suppliers. To this end, the firm wanted to scout for leading-edge technology options for custom dosage dispensers across industries such as CPG and pharmaceuticals.

To help the client achieve its objective, we conducted a thorough patent research to understand the latest developments in the automated customised dosage dispenser market. In particular, we analysed patented touchless dispensers based on their features, applications and owners to ensure for example that certain features could be incorporated to develop a dispensing device for pharmaceutical products. 

As an outcome patent research can help the client  gain a better understanding of the customised dosage dispenser space, get insights into the latest developments in the automated, customised dosage dispenser market and examine the supplier landscape, covering level of market fragmentation, key suppliers and types of products offered.

From this in-depth analysis the client was then able to evaluate the key features that had to be considered for a new leading-edge custom dosage dispenser, the possible key suppliers and the impact on operations and procurement.

2. Partner Identification

Patent research can help life sciences businesses identify the right partners based on specific business criteria. This is particularly important if the firm is considering a strategic co-development, merger or acquisition as part of their business plan, as well as to ensure innovation within their product lifecycle.

For example, we worked with a pharma giant which wanted to identify suitable partners to help them build capability in proteomics (a large-scale study of proteins) as this is an area extensively used to discover and develop advanced and more specific drugs.

As part of this project, we studied the latest patents filed in the category to understand which businesses were driving innovation in this space and therefore could be a suitable partner. The patent analysis revealed three types of potential partners:

1.     Large analytics companies that developed software-based tools for the life sciences sector

2.     Smaller technology start-ups or university incubator cells that may or may not have a product in the market; however, have developed a robust and specific proprietary technology, which could be transformed into a cutting-edge analytical tool

3.     Established biotechnology product development companies (e.g. Thermofisher, Illumina etc)

Based on a detailed patent analysis and study of other market dynamics, we made recommendations to the client which leaned towards setting up a collaborative partnership with a smaller technology start-up or university incubator cell for three main reasons:

  • A more specific, customised and cutting-edge tool would help the client gain market advantage
  • The client could co-develop the technology with the partner and tweak it to meet the its own requirements for discovery/development of a specific drug
  • Potential for the client to ultimately acquire the smaller entity and build its IP in the category, as the scale and stature of the company would easily allow this

In this case patent research can help a client explore different type of possible partners and then be able to make a more informed decision based on this.

3. Sourcing Strategy

Companies can leverage patent research to catch early signals on whether they need to change a supplier or a sourcing destination or enable their supplier to innovate. Here are some steps firms can consider in which this is helpful:

•       By tracking if a particular raw material is being disclosed in patents from a new geography/region, and whether it make sense to explore new suppliers or producers from that region

•       By identifying innovative alternatives – such as a complete different raw material or a new producer of similar pharma ingredients, delivery substrates or electronic components for medical devices

•       By renegotiating lower price points for contracts with suppliers whose products are going off-patent

•       By rejigging the supplier base wherever the procured products are likely to get patent protection

As an example, a research-driven biopharmaceutical company wanted to revisit its strategy for sourcing an important Active Pharmaceutical Ingredient (“API”) intermediate. The client’s Europebased manufacturing unit used to procure the intermediate from a key supplier in the US. In a bid to cut costs, it wanted to re-consider any alternate suppliers or sourcing destinations.

To help the client, we proposed that patent analysis (in addition to desk research and primary interviews) be used to identify the following:

  • Alternative suppliers or sourcing destinations that the client should evaluate
  • Proprietary manufacturing, storage and transportation technology that claimed to be better than those used by the incumbent supplier
  • Status of patents covering the incumbent supplier’s proprietary technology

By analysing over 1000 patents filed globally, we were able to provide the client with key business- driven insights:

  • China was now an attractive sourcing destination due to unparalleled innovation and implementation of stricter regulations that matched EU standards
  • Chinese suppliers had filed several patents that disclosed substantial improvements over the proprietary technology owned by the incumbent supplier
  • Chinese universities were developing methods to produce the intermediate at much lower temperatures, which would result in substantial cost reduction; this also indicated that China is pioneering research in the category and could be a choice worth evaluating

4. Market Exploration and Category Strategy

Keeping abreast of latest trends and innovations in a market or category is one of the most (if not the most) important inputs for a healthcare company’s growth machine.

Companies can achieve one or many of the following objectives by doing this:

a)     Assess whether their suppliers are working on/using cutting-edge technology and stay abreast of their technology and R&D focus

b)     Apprise suppliers of the latest trends in the market and help them adopt cutting-edge technologies

c)     Keep an eye on any disruptive innovations

d)     Get a regular pulse of competitor activity

To re-fresh its strategy, a multinational biopharmaceutical company wanted to understand the Companion Diagnostic (CDx) landscape, especially for drugs used in a particular type of cancer therapy.

CDx, in general, is a tool used in the field of precision/personalised medicine. Essentially, it encompasses drug-specific diagnostic tests – conducted before administering therapy – to predict whether the therapy would benefit a particular patient or not. This also finds application selecting the right subjects for clinical trials and get faster regulatory approval.

The client had specific objectives in mind:

  • To identify key technological trends and disruptions in the category
  • To understand the role of CDx suppliers (in terms of innovation and potential to engage/partner with them)
  • To understand what the competition is doing and formulate business strategies accordingly

After studying the patents filed in the category, we found that developing a CDx strategy for the drugs in question was a big industry challenge, since their course-of-action was very different from regular oncological drugs. Analysis of close to 2000 patent filings led us to the following key takeaways:

  1. Recent patenting activity of the client’s incumbent supplier suggested that it was not focusing on developing specific CDx methods for the drugs in question;
  2. The changing regulatory landscape demanded that the client, in collaboration with a CDx company, start co-developing a CDx strategy while a drug was in its pipeline. Patent filings suggested that competitors had already started doing so (they had co-filed patents with CDx companies).
  3. Additionally, we provided the client a list of CDx companies that possessed suitable technologies (based on their patents) to aid development of diagnostic tests for their pipeline drugs.

A potential disruption that we could identify was the disclosure of blood-based biomarkers for use in CDx techniques. Even though CDx is mostly used during patient selection and diagnosis, we recognised that in the near future CDx may also be leveraged at the prognosis stage, especially for life-threatening diseases such as Cancer.

To conduct CDx tests repetitively during treatment, testing techniques will have to be much simpler and less stressful for the patients. Hence, to develop such techniques (that are simpler than the currently used biopsy), we recommended that the client should invest in identifying blood-based biomarkers for their drugs and utilise liquid biopsy based CDx methods for their upcoming drugs.

Conclusion

Patent research is more than a legal requirement that firms take to protect their products. These examples have shown the impact that patent research can have on locating  new and more cost effective suppliers, finding less expensive raw materials or more innovative technologies and identifying new business partners. Patent research should no longer be restricted to the legal adviser but taken to CPOs, Head of Operations and R&D, to deliver wider business benefits.

Paras Kumar is Senior Specialist at The Smart Cube.

 

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