A Call for Communication
A recent global survey by UK intellectual property group Marks & Clerk suggests that Big Pharma, now rapidly approaching a patent cliff, will be more dependent than ever on its biotech brethren for the development of potentially viable, successful and profitable drugs in the years ahead. The survey found that the biotechnology and pharmaceutical industries may be entering a critical phase of drug innovation and development that will inevitably result in increased strategic mergers and acquisitions. And, interestingly, the survey also suggests that these executives favor the new atmosphere created by the recent US healthcare reforms.
The survey was conducted among nearly 400 biotech and pharma execs in the US, UK, Europe, and Asia. Most were from commercial biotech and pharmaceutical companies, with the remainder coming from academic, R&D, and venture capital firms. While they see the economic outlook greatly improved from last year, the results also point to a pessimistic view of the innovation capabilities of Big Pharma. The survey reveals that 82 percent of executives have little faith that Big Pharma will be able to innovate sufficiently to replenish shrinking drug development pipelines. This pipeline weakness will result in a marked increase in acquisitions to augment that deficiency. Nearly 70 percent predict substantial merger activity within the next two years, and nearly 20 percent anticipate increased activity within the next year. And while the economy has certainly not entered a new golden age, most execs see the improved economic climate as being beneficial to confidence and, thus, to mergers.
So what’s a small to mid-size (to large) biotech company to do?
These predictions suggest that the environment for biotech companies seeking partners or exit strategies has greatly improved. There are multiple ways a company can prepare for the merger/partnership onslaught. In addition to shoring up balance sheets, tightening operations and demonstrating the clinical value of compounds and drugs, marketing and communications can ensure that a company is putting its best foot forward.
The most strategic—and often least expensive—approach to improving a company’s visibility and stature is to fully integrate marketing and communications to ensure that positioning, messages, strategies, and tactics of all marketing disciplines are in alignment and are able to deliver the company brand and story most forcefully. This integration now includes social media, which has transformed the way that individuals and companies get information and communicate with each other, as well as their ability to disseminate information and strengthen their brands.
Make sure that your strategic messaging is creative and compellingly defines your company’s competitive positioning. Assess the current market and the competition, develop a communications strategy that addresses the situation, identify your primary and secondary audiences, and utilize a variety of tactics to deliver your messages.
Keep your website up to date, relevant, and ensure it reflects the themes your company and the industry embrace and are concerned about. It should also suggest a forward-thinking and enlightened management. Your company logo, the images you choose for the site, and language content that resonate with key audiences, in this case the acquirer, will leave an important, lasting impression if pharma is “shopping around” on the Web for potential products and doesn’t already know you.
Your marketing communications materials are sharp, professional, accurate, and reflect the latest advances of your compound in the clinic or your drug on the market. Spec sheets, fact sheets, and Q&As are all important descriptors of your company and its key products and compounds.
An effective public relations program is one of the best ways to become known to broad industry audiences in a way that educates those audiences about the company, its science and scientists, management, goals, intellectual property and pipeline. This program may contain multiple components including feature stories in leading trade and business publications, byline articles and opinion editorials placed in leading trades or business publications, executive speeches and appearances at important conferences and blogs on the company website or in selected online media. All of these tactics, if orchestrated strategically, are very effective in raising a company’s awareness in a credible way. While advertising can bring name and brand awareness, it is limited in what it can say due to space and budget limitations. Public relations has the ability to tell a company’s story with fewer restraints on length and content, and provides multiple approaches to reaffirm, hammer home if you will, the key messages the company wishes to get across.
A key component of any communications program is thought leadership—this is especially important in regards to acquisitions. The acquirer wants to know they are gaining not just substances in development or products on the market, but talent and intellect as well. Thought leadership programs usually include byline articles written by scientists or executives involved with the success of the company, opinion editorials, and white papers, which demonstrate leadership and knowledge both on the scientific and business sides. Being an acknowledged thought leader may also result in a premium at acquisition time.
Finally, as noted above, social media can reinforce a company’s evolution and momentum by increasing its exposure to those who follow the industry. A company becomes more visible to all interested players if it has the tools to stay top of mind when it counts.
While mergers and acquisitions are nothing new in the biotechnology and pharmaceutical industries and there has been a symbiotic relationship between the two sectors for many decades, the Marks & Clerk survey suggests that the continued weakness in Big Pharma pipelines will intensify the hunt for biotech drug development for some years to come. Biotechnology companies would do well to position themselves for a very different, more open, and opportunistic environment that hasn’t been seen in years.
Supply Chain Strategy: Managing risk and opportunity in a changing global landscape