These patent expirations and innovations are driving a growing wave of biopartnering alliances. Companies are searching for new technologies capable of extending product life cycles by creating improved, next-generation versions of important, widely selling therapeutics. They are also looking for the means to turn molecules that otherwise might not become viable therapeutics into valuable product candidates.
But in an increasingly global, increasingly specialized world, few companies can do it all. Hence, corporate alliances have taken on an increasing importance, as partners are needed to create viable, value-added therapeutics, to bring larger numbers of products through development, and to address large, global markets. Industry analyst Recombinant Capital reports that in the three-year period from 2000 to 2002, the combined market value of global alliances was $19.4 billion, or approximately $6.5 billion per year. This represents an increase of 75 percent over the previous three-year period. When you examine the previous ten-year period, alliances among big pharmaceutical companies, biotech companies, and drug delivery companies have grown even more — by over 350 percent.Today, almost one-third of new drug products are developed through collaborations. According to a June 2004 Visiongain report titled "Collaborations and Licensing in Global Pharmaceuticals and Biotech," pharmaceutical companies derived an average 20 percent of total sales from in-licensing deals in 2003; by 2009 this figure is expected to reach 40 percent. Collaborations and joint ventures are an important ingredient of success in the pharmaceutical and biotechnology sectors, and current trends suggest that their importance will grow in the future.
In addition, a November 2004 study on biopartnering from the IBM Institute for Business Value suggested that fewer than one-half of all alliances are currently successful. The authors concluded that while 15 percent of alliance failures can be attributed to factors considered beyond the control of management, better alliance practices could salvage 85 percent of the value now lost to failed partnerships — a potential savings of $2.7 billion.
So what elements make biopartnering a success? First and foremost, it's important to pick the right partner. No single aspect of a prospective partnership — including the amount of money offered — makes a particular company the right one. Instead, a variety of factors should be considered. What is the prospective partner's track record in the marketplace? Has this company previously been involved in a similar partnership, for a similar type of product? If so, how successful was the arrangement? How experienced are the people who would comprise the core team of the partnership? Is there good chemistry and a compatible corporate culture between the prospective partner company and your own? Does the staff communicate well, and are they responsive? Few things are as frustrating and limiting to success as poor communication between partnering companies, especially if one member of the partnership is much larger than the other.
If you are partnering to gain access to drug delivery systems or other technology, are you getting intellectual property protection for your partnered product at the same time through access to unique, patented technology? How flexible is the offered technology? Can it be readily tailored to your drug? Does your prospective partner have systems in place — including manufacturing and process development, as well as clinical development and compliance/regulatory affairs — to make development a truly joint effort?
A successful partnership relies on a mutual understanding of the needs of both companies involved, and of what will make the relationship work, right from the start. Moreover, the most successful alliances have champions on both sides who can become personal allies, as well as cheerleaders for the partnership within their respective companies. These individuals should be well connected within their respective firms, having some clout in corporate decision-making processes.