Partnerships 2010: Collaboration in Pharma: Is M&A (and Co-Development Deals) the New R&D

Panelists:

David Reasner, Phd, Senior Vice President, Biostatistics, Data Management, and Health Outcomes, Sepracor

Adrian McKemy, PhD, Managing Director and Practice Leader, Development and Commercialization, Quintiles Global Consulting

It’s all about risk! Everyone feels that there is too much. Everyone is looking to hedge against it. Hence the call to co-develop with either a corporate of a venture capital partner.

Deals are more of a dialog today. This notion is supported by the dramatic increase of ‘options’ based deals with specific milestones as opposed to the ‘whole hog’ deals more prevalent in 1980’s and 90’s. After all, no one likes to make long-term decisions with little information. In doing so one can wind up with a ‘permanent reminder of a temporary feeling’.

This leads to a discussion of governance and governance committees (GCs). Dr Reasner defines governance as a script without a dialogue in which one individual may play many roles and this particularly within small companies. He points out that the governance structure is really to manage the contract and may not be particularly helpful in managing the company to value. Interdependence is a key consideration in developing a governance committee and appropriate metrics need to be in place to measure whether the desired outcomes are being approached. Dr Reasner likes to structure a GC with co-chairs in order to get at least one relationship “up and running”.

Organizational costs should be considered. Interdependence requires maintenance. What else could your executive team be doing with that time? Are they already doing too much to execute well in an interdependent governance committee. Basically what he is talking about is ‘opportunity cost’. Do your really want that much time taken out of your executive team?

Usually there is one key person that is talented in communicating the value and culture aspects to be considered and this person can be extremely valuable to success. This person is not always a senior member. Don’t lose the opportunity to fully utilize this resource. This is the alliance manager either in fact or de facto.

What is the objective of the partnership? It’s important not to lose sight of the goal. “Eyes on the prize.” Ultimately, when the inevitable difficulties arise, do you want to ‘be right’? or do you want to succeed?