Keys to Success - Pharmaceutical Executive

ADVERTISEMENT

Keys to Success
An overview of recent industry deals reveals 10 principles for developing and maintaining strategic partnerships.


Pharmaceutical Executive


Velcade, for example, has been a goldmine for both involved companies, Millennium and Ortho Biotech Products. But it had a dicey beginning. Wills remembers a day back in 2003 when it looked as if the proposed deal would fall apart:

"J&J was one of several companies negotiating with Millennium for the worldwide co-development and co-commercializion of Velcade. Several were close to finalizing contracts. On a Wednesday morning, we received a call from Millennium saying it no longer wanted to make a worldwide deal, but was willing to negotiate with us for an ex-US one. What made this more onerous is that Millennium insisted that the deal still had to be signed and announced by Monday morning as originally agreed upon. Not knowing what the other potential partners were willing to do, given the time frame, we said, 'All right, we are willing to lock ourselves in a room with you over the weekend and hammer out a new deal by Monday morning.' We did, and the rest is pharma history."

Flexibility during negotiations is often a predictor of how partners will behave later. For example, "In Theravance's Beyond Advair partnership with GlaxoSmithKline's respiratory CEDD, both sides understood that it was a give-and-take," Brinkley says. "By remaining flexible, we went from term sheet to signed contract in under sixty days. Our relationship after signing continued in the same vein—lots of discussion and willingness to make adjustments to do what was right for the product, not ourselves."

One way to avoid post-deal ossification is to bring together executives from both companies to openly debate issues. For example, when Bayer acquired Chiron, each company was using a different information system. Bayer's management wanted to stay with its infrastructure and, initially, that was the plan. But the issue quickly became politically charged. Former Chiron employees lobbied hard for a conversion to their system. Instead of digging in, management formed a team with representatives from both companies to evaluate the systems and recommend which should remain. The joint team discovered that Chiron had strong information systems, particularly in its corporate accounts, while Bayer's information system wasn't nearly as buttoned up. The result: Chiron's structure remained intact, and Bayer's was brought into line with it.

10 Measure What Matters How can you judge the effectiveness of a partnership? It may be years before alliance partners bring a new drug to market or former competitors successfully meld their operations after a merger or acquisition. There must be some way to measure success along the way.

Here's where, once again, everything hinges on the excellence of the initial plan. Executing on the plan is the only metric that matters. Sure, stock price, systems integration, and a motivated workforce are important, but hitting the up-front milestones is what it's all about. "If you agreed to have five compounds ready for clinical trials by September 30th and you only have two, the partnership isn't working," Brinkley says.

Wills agrees. "We have metrics for operational progress—timelines, budgets, and the like—which keep us on track. Success is getting a drug to a patient who needs it." But his group also puts in place metrics to assess the softer side of its partnerships. "To get a pulse on the relationship, we conduct web-based surveys that probe how well we are collaborating and communicating. We administer them at both the operational and management levels. We have one survey at the start of the alliance, when everyone is excited about the new relationship. Six months later, we ask the same questions, then compare the results. We often find that the enthusiasm has waned, and that tells us we have to work with people on both sides to revitalize the relationship. We continue to survey the joint teams annually for the life of the alliance, working with them whenever the results indicate the need," he says.


ADVERTISEMENT

blog comments powered by Disqus
UPCOMING CONFERENCES

Serialization Summit
San Diego, CA
Feb. 27-28, 2014



Advances in Aseptic Processing
San Diego, CA
Mar. 10-12, 2014



ClinTech 2014
Cambridge, MA
Mar. 11-13 2014


Investigator-Initiated and
Sponsored Research (IISR)

Philadelphia, PA
Mar. 19-20 2014

See All Conferences >>

Source: Pharmaceutical Executive,
Click here