As a consultant, I focus on partnering, predominantly helping small companies find a bigger company to continue the development and commercialization of the drug candidate from the small company through licenses, options or other forms of partnerships. Over the years, I’ve learned a few key things to getting a partner to be interested.
To get a partner interested, you need to quickly and clearly tell the busy professional at a bigger company what you are offering. Right at the beginning, you want to briefly tell them
· What type of molecule (small molecule, antibody, protein or other)
· What is its potential use
· What is the stage of development (hit, lead, optimized lead, preclinical efficacy, IND ready etc)
· What makes this opportunity special (how is it better than what is being developed by others).
With 4 or 5 bullets, the big company’s busy representative can decide if they want to read the rest of your materials or not. If you bury the essence of the opportunity in too much text or make it too complex, the odds are it will get put in a pile “for later”, and they may never find the time to get back to it.
These days, with small companies seeking financing alternatives to VCs and IPOs, and so many drugs competing at each target and indication, the big companies are seeing lots of early opportunities, even as they are seeking late stage opportunities to replace their patent expirations. This means the competition for partnerships on early drug candidates is stiff and the hurdles high.
Your potential partners want to see
· evidence (such as a biomarker or structure activity relationships) that your efficacy is due to hitting the presumed target,
· how to determine the dose in the clinic, and
· which patients are most likely to respond.
Efficacy and safety are no longer enough most of the time. The more you can point to ways to reduce their risk in the future development, the more likely you will get a deal.
It is easier for partners to say no than yes. Most molecules will fail, so a “no” is rarely wrong and even the rare successes are only apparent much later. It also helps to remember that each step of evaluation costs the potential partner an increasing expenditure of their time and expertise, so typically, partners will stage their evaluation beginning with a non-confidential summary for review by a business development person, then by a team, and then a deeper evaluation with a bigger team representing more functions under a CDA (confidential disclosure agreement). Finally, in due diligence, they really try to understand the potential, what they will have to do and spend to reach that potential, the risks and when they can be addressed (the earlier the better). It is easy for them to miss things, as they are trying to learn in weeks what took years to create. Generally, only after diligence will there be specific discussion of financial terms; for the partner, it is tough to price something without really understanding those key questions of potential, risk and development needs.
Be politely persistent and recognize that their strategy and the competition changes all the time. What does not fit their priorities today, may fit in the future. So go back and talk to the potential partner again and again. But also make sure you are listening and incorporating the feedback you get, and can address, at least in part, their prior objections. And if you don’t understand their concerns, ask. I hate the answer of “no strategic fit” and always ask what makes it not a fit, or what would it take to overcome that lack of fit. Often, it is a mix of things and small changes in the risk / benefit calculation can make them interested. For you, talking to potential partners is also a sorting process to find those who see the opportunity as you do. Although we do all follow the same scientific developments, each company does have a unique set of its own past failures and successes to shape its tolerance for different types of risks.
For me, partnering can be an emotional roller coaster, with great anticipation and then disappointment, only to start again to climb the hill with a new potential partner or with new data. But every once in a while, you get that chance to negotiate – and then there are whole new set of things to think about!
Linda M. Pullan, Ph.D. offers biotech and pharmaceutical companies consulting in all aspects of partnering through Pullan Consulting ( www.PullanConsulting.com ).
For several years, she has been providing companies help in identification, evaluation, valuation, negotiation and strategy for partnering in or out. She has an extensive deal sheet ranging from company acquisitions to Phase III compounds and from preclinical candidates to technologies. Dr. Pullan also served as President and CEO of Viriome, Inc. and on the board of directors of Paloma Pharmaceuticals, Inc.
Linda has a Ph.D. in Biochemistry and a B.S. in Chemistry. Linda has more than 20 years of drug industry experience, beginning in drug discovery at Monsanto/Searle/now Pfizer and ICI/Zeneca/now AstraZeneca. After doing licensing at what is now AstraZeneca, Dr. Pullan continued as head of oncology and hematology licensing for Amgen. She then joined Kosan Biosciences as VP of Business Development and experienced all the tasks of out-licensing and business development in a small company.
A note from Taffy Williams:
Linda Pullan is an excellent business development advisor that I met at the JP Morgan Healthcare conference a few years ago. I get Linda’s newsletter which is extremely well written and shows her talent at analysis and understanding of the Biotech and Pharma industry. She has served in business development functions in large and small companies. When I asked her to help with the blog, she graciously accepted. I am grateful for her input and enlightenment. Thank you Linda!
You can follow Taffy Williams on Twitter by @twilli2861 and you can email me with questions at firstname.lastname@example.org and my company website is at http://www.ColonialTDC.com . You can also find me in the group Startup Group on Linkedin. The blog is now listed on Alltop®.