Expert insight: Getting your voice heard by big pharma
Getting your innovation noticed by a large pharmaceutical company is not easy when they are bombarded by partnering opportunities daily. Here, Fintan Walton, CEO and Founder of transaction advisory firm PharmaVentures, reveals how to optimise your chances of success in deal making: how to open the door; how to get their attention; and what you need to reveal now you’ve got your chance to communicate.
Ensuring your voice is heard above the noise of your competitors and others keen to partner with big pharma is essential for any prospect of deal making. There are certain questions to consider from the outset. How do you map the internal processes of decision making and identify the key decision makers? Have you prepared the compelling scientific, clinical, and commercial communication strategy so that they can make a decision in your favour? What do you reveal when you’ve got your chance to negotiate? Here we suggest our top four tips to maximise your impact.
1. Target the right people
There is no doubt that targeting the right people will help enormously, but this can be the least of your problems. Preparation of how you communicate your opportunity is even more important. The biggest weakness most biotech companies have is a naive assessment of the commercial potential, or not, of their opportunity. Developing a Target Product Profile is essential and performing an assessment of the future market, the current competitors in clinical development, and the risks, are essential for a compelling clinical plan and, of course, valuation. A realistic commercial vision of the opportunity is essential, not only for communication purposes but also for targeting the right companies. It is only then that finding the right people comes into play.
There is a myth that companies do deals successfully because they know someone very high up inside a company and that contact will insist on the company getting the deal done. All pharmaceutical companies, whatever their size, have processes. Even if you were able to put your opportunity straight in front of the CEO of a major pharmaceutical company, they will just kick it down to the member of the relevant department. It will then go through the same process it would have done if you had followed the standard process in the first place. Often, when this route is attempted, the information supplied is short, insufficient or non-compelling and the opportunity is lost.
If you can develop a long relationship with the target company, obtaining information on the right people and processes, this can enhance the chances of a good review by the right people internally. If you haven’t got that relationship, then working with deal specialists with insider knowledge can fast-track your efforts.
2. Follow the processes
Pharmaceutical companies have a triage system whereby they can quickly reduce the number of opportunities coming through. Each triage varies from company to company and is largely determined by key messages within the initial documents sent to the pharma company. This is where you must be most careful and comes down to good communication within the written documents sent, as well as the verbal communication during follow-up calls; putting the required documents together, making sure your opportunity is not lost in the process and that you communicate everything you need to in order to achieve the best outcome. You don’t want to find out later that the company could have easily done a deal with you then to have been rejected at an early stage. You need to be sure that you have carefully considered your communication plan, so when meetings take place, the opportunity is elevated through its processes and the right final decision is made. A good communication plan will incorporate the following key points:
- The organisation plan of the target company
- Who within the organisation, and at what level, should be approached?
- The level of detail that will be communicated during the process of communication
- Who should be communicator of information?
That’s where experience and proper research on the key elements above come into play.
Decision making is based on the quality of the case internal people make to senior management. If they are unable to communicate your message effectively, your opportunity is likely to be dropped. You are, in effect, highly dependent on what is, essentially, a proxy communicator working on your behalf. It is dependent on the quality of information you have provided and how it is then properly communicated, so that the opportunity is fairly considered. Get that wrong and rejection is highly likely.
The business development process is the gateway into these companies, but it is also important to understand where the real clinical and commercial interests of those organisations lie. Just because a company wasn’t interested in a certain therapy area 6 months ago, it doesn’t mean they are not reconsidering it now. For the majority of small biotech companies, this is difficult to do as they do not normally maintain contact with pharmaceutical companies on a regular basis. Again, you can consider using specialist advisors who are active within the deal making landscape and who regularly speak to the pharmaceutical decision makers.
3. Know your potential partner
Knowing your target pharmaceutical company well is critically important. So, following your target pharmaceutical company’s financial performance, its success and failure in launching products, and knowing when key products are coming off patent is essential. It helps you position your opportunity in a commercially relevant way. But not all opportunities need to be blockbusters, either. For example, if your target company is Eli Lilly or Novo Nordisk in the area of diabetes, even a small innovation that helps to protect their position in that market may be very important to them.
4. Manage how much information you reveal
We are often asked how much information biotech companies should reveal to the other side. Disclosure of information is a progressive process. In the end, all relevant information should be stored in the virtual data room (VDR), where information release can be controlled and monitored by the biotech and its advisors. The question is, when and how do you disclose the information?
Of course, access to the VDR is dependent on the level of interest in the opportunity, and often the strategy is to only let interested parties into the VDR after Heads of Terms are agreed. Often, some limited access to documents that help interested parties make an offer is required, with full access only made once terms are agreed. In some cases, you may provide limited access to two or three companies into the VDR before they make a final non-binding bid. If you are in such a competitive position, you can monitor what they are downloading and even go back to those who aren’t active. This enables you to assess the level of interest. Populating a VDR and monitoring activity of interested parties can be quite time consuming and, therefore, resource should be carefully planned to organise content and to have the right people on standby to answer questions as they arise.
So, should one reveal all and when? In the end we recommend for you to be prepared to reveal all in a properly planned communication strategy that will ensure a pathway to a successful deal outcome.
About Fintan Walton: Dr Walton majored in Genetics at Trinity College Dublin, Ireland where he also gained a Ph.D researching cell proliferation in yeast. Prior to his entrepreneurial activities at PharmaVentures, Fintan had built his R&D and commercial experience in biotechnology within management positions at Bass and Celltech plc (1982-1992). In 1992, he co-founded CONNECT Pharma, a predecessor company to PharmaVentures focused on assisting pharmaceutical and biotechnology companies worldwide in partnering, the licensing of intellectual property and M&A. In 1997 this company became PharmaVentures.
About Pharma Ventures: PharmaVentures is a transaction advisory firm and a leading international company in partnering, M&A deals and strategic alliances. For the past 29 years, PharmaVentures has relationships with the major pharmaceutical companies, acting as advisor on over 900 deal-related projects covering licensing, mergers, acquisitions, divestments, and joint venture activities for companies worldwide. For more information, visit www.pharmaventures.com
Contact: Lisa Holloway, Senior Marketing Manager, PharmaVentures: [email protected]