Find Your Perfect Pharma Partner Online

June 9, 2010

Thomson Reuters' Mark Gordon looks at how real partnership opportunities are developing in a virtual pharma world.

Thomson Reuters' Mark Gordon looks at how real partnership opportunities are developing in a virtual pharma world.

At a weighted cost approaching $1.8 billion to bring a new molecular entity to market, few pharmaceutical companies have the pipelines required to replace revenues threatened by loss of patent protection. As a consequence, there are many within the industry that believe something has to significantly change about the way pharma companies innovate and develop drugs.

Pharma partnering has always offered such a possibility but the recent growth and popularity of on-line networking looks set to change the way these opportunities are found.

In the 'old days' - that is, the nineties and the first half of this decade - the pharma partnering business model was simple. Pharma companies filled the growing gaps in their pipelines by in-licensing promising clinical-stage drugs from more innovative biotech companies. Pharma put its late-stage development and marketing muscle to play and brought these new biotech-discovered drugs to the market along with its own. 

Pharma companies found biotech drugs through business development groups that went out and used personal networks and often partnering conferences to find opportunities, and of course the innovators pursued pharma, so opportunities also came to them. The business development groups used pipeline and deals databases as an additional source of finding and evaluating drugs, but smaller innovators used databases less often, as they figured they already knew who to target: the top 20 pharma companies and any other large companies with a focus in their therapy area.

With the advent of online networking there was much talk of bringing ideas such as match.com or even eBay to the pharma partnering world. However, licensing deals are too complex and too strategic to be executed online and the list of potential partners wasn't big enough to make online matchmaking a necessity. 

Towards the end of this decade things changed. The deals are no less varied and complex, but importantly the pool of potential partners has become much larger. Pharma is finding more varied gaps in its capabilities, and as it stands at the edge of a patent cliff, it has begun sharing both the risk and the reward with more molecules at more stages in a virtual pharma 'network.'

The new partnership models
So what are some of the real opportunities that exist in this new virtual pharma world?

Many of the top pharma companies find their bottleneck is not in discovering new drugs, but in developing them to the critical proof of concept (efficacy in human) milestone. They can't develop all the promising drug candidates they have, so they are increasingly sharing the work, the risk and the rewards. AstraZeneca, Eisai, GSK, Lilly, Merck, Roche and Pfizer have all licensed out compounds to venture-backed companies. In many cases they can opt back in to part of the rights for those that get positive Phase 2 data.

Venture backed 'biotechs' such as Flexion and Synosia have no labs, and no discovery functions. Companies like these often look to Big Pharma companies with the clinical-stage bottlenecks for molecules to license in - and of course they look to an ever growing list of biotech companies for assets. The goal with virtual companies is to develop these products to the next big value inflection point and then license them back out - back to the originator, or to another company.

CROs such as Quintiles and Covance are extending the nature of their relationships with pharma, taking a stake in the upside of drugs they develop for their clients.

More in-licensing deals than ever are done on earlier-stage drugs. In 2004 in-licensing deals for early-stage drugs represented 23.7% of all licensing deals, in 2009 that proportion had increased to 45.61%. There are many more of these than late-stage drugs, so the result is that more drugs than ever before are 'available' for partnering, often more than once in their development cycle, or to multiple partners.

Venture-backed companies such as Solasia Pharma are licensing drugs approved in one region to market them in other regions of the world.

The attention is on the big companies, but the opportunities for sharing in development are happening everywhere in the industry, with new participants of all shapes and sizes.

Database or face to face?
How do people in these organizations find each other in the new vast virtual pharma world? The old wisdom dictated that business development people worth their salt know who to call, they don't need a database. But this is no longer the case; nowadays, they can take advantage of the growing proliferation of partnering conferences, databases and consultants playing matchmaker.

Matchmaker databases include PharmaLicensing, which recruits innovators to list their assets for partnering and recruits buyers of innovation to find these assets. Thomson Reuters has recently taken this concept a step further in its Outpartnering Registry, which lets innovators list for free their drug partnering interest directly in its pipeline database, which many top pharma business development groups use to find drug licensing opportunities.

Big Pharma companies have traditionally relied on such databases to summarize and index the current state of the drug development pipeline, but, increasingly, smaller companies, venture capitalists and CROs are using such databases to find partnering opportunities. 

It is unlikely that databases and virtual networks will replace face-to-face meetings for introductions or even transactions. However, it is clear that they are playing an increasingly vital role as the list of potential partners gets longer and more varied. The future looks set to include new sources of partnering information, with new types of partnering events, and as the number of partners involved in the next generation of drugs increases, so too will new innovations in virtual pharma.

Reference
1. Based on deals for drugs in pre-clinical or Phase I development. Source: Thomson Pharma.