One of the very last sessions on the very last day of BIO 2005 drew quite a crowd. It was titled, "The Five Worst Mistakes You Can Make When Creating a Collaboration or Strategic Alliance." Considering the hour, I expected marginal attendance. However the grand lecture hall was more than one-half full, plus there was the usual mad dash to the dais afterwards, indicating this topic is still very near and dear to the industry's heart. Those of us who decided to take advantage of the conference's final hours — and this session in particular — were treated to some honest and useful advice from the panel of professionals who candidly shared the good, the bad, and the ugly about their partnering experiences. Have no fear. They were discreet, mentioning no names when it came to problematic relationships but sharing enough so we'd learn the moral of every story.
Carol L. Fisher
Richard Jaffe, Esq., partner with Ballard Spahr Andrews & Intersoll, LLP, expertly chaired the group, which included Joseph Dillon, senior vice president, head of corporate development services for The Mattson Jack Group; Peter Molloy, CEO of Biota Holdings Ltd.; Robert Werner, Esq., senior legal director for Schering-Plough; and Graham Brazier, vice president of business development for Bristol-Myers Squibb.
In a nutshell, the 90-minute discussion yielded five major points to consider for both negotiations as well as throughout the relationship:
You should consider a sixth point: Do your homework and be prepared. By the time you sit down at the negotiating table, you should know everything possible about the market for your intended product or service. Are you aware of all the other candidates (the competition) in the marketplace? Do you really know your partner? Is your technology or service compatible with their portfolio? What is their corporate culture? Would it be compatible with yours? Being prepared also means understanding the level of risk involved in bringing your product or service to market and who will bear the lion's share of that risk. Do you have a reasonable expectation of your asset's true value and the chances for its commercialization?
- Be realistic, be flexible
- Don't take advantage of your partner
- Don't try to squeeze the last nickel out of the deal
- Nurture human relationships
- It's never over — once the deal is made, the work has just begun.
The panel offered other nuggets such as it's OK to disagree with your partner during negotiations and later. It's critical to share your research and strategy. Biggest isn't always best. It's acceptable to search for a partner with just one compound. If you have back-up assets, your partner will most likely be interested in them too. Finally, like a marriage, you expect this relationship to be long-lasting, and the tone you set during negotiations will carry forward into the future liaison.
Carol L. Fisher, Editor in Chief