Oiling the Engines of Invention - Pharmaceutical Executive


Oiling the Engines of Invention
Big Pharma-biotech alliances


Medarex’s Ron Pepin, PHD (center) was responsible for building research collaborations as executive director, external science and technology at BMS before he joined Medarex as vice-president of business development in 2000
Winston Ko, MBA [Genervon] Just to follow up on the cross-fertilization point, I find myself traveling from the West Coast back here to "Pharma Country" all the time because, like many biotech companies, we buy the expertise we don't have in-house. We're very good at discovery, we can do that in our laboratory. But we need outside expertise for product development, and all the CROs, CSOs, and CMOs are here, a product of Big Pharma downsizing.

Marching Closer Together At Cupit's suggestion, everyone agreed that today's deals are more about relationships than products, an idea that's illustrated by the companies' growing emphasis on alliance management.

Koster Ten years ago, large pharma was focused on licensing. But in the research labs, the biotech deals that were being done were primarily around platforms, intellectual property, and pulling things out of academia. That created a different type of relationship, in many cases for access to intellectual property. You got that and went on with your business. As we realized that platforms were not going to be the end-all for biotech and that we needed to have business plans to be profitable, we moved to the product end of the spectrum and started playing closer to Big Pharma.

Eisai's Ed Broughton (far right) was a key leader in the 1997 launch of Eisai's first US product, Aricept (donepizil), which is copromoted with Pfizer and indicated for the treatment of mild to moderate Alzheimer's disease.
At that point, the "not invented here" syndrome necessitated that more attention be paid to alliance management, which is why you now see a lot of large pharma companies building formal processes to manage those relationships and look into what goes wrong. We're now marching closer together than we were in the past and aligning around products.

Bernard What are your thoughts about a dynamic described in recent research from the Wharton School of Business that suggests products co-developed by a pharma and biotech company are more likely to be commercialized than those that are developed by a single entity?

Ko and Koster
Broughton From a smaller company's perspective, specialization in one area can sometimes lead to a true expertise that exceeds that of larger companies. The larger company may have breadth and experience across an entire therapeutic area, but you take people who worked for years on a particular disease and that can be a great contribution to the partnership. Couple that with the tremendous breadth of resources and experience in a large company and you have a winning team that can often accomplish something that—and do it more quickly than—neither company could do alone.


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