Pharma Partnering Summit - The Summit Conference for Collaborations in Pharma & Biotech Sector
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The future of partnering in Pharma & Biotech

Biotech and small pharma companies have proven that tremendous value can be created in pioneering new approaches to treat diseases and many of the technologies that have become common in big pharma in fact came from small businesses. The continuing trend of collaborative arrangements is driven by the symbiotic needs of big pharma and biotech. Small companies depend on large ones for late-stage development funding and commercialisation. Large firms depend on small players for new products and technologies. So should you partner or ‘do-it-yourself ’? This is an interesting and controversial topic! Partnering with big pharma was key to providing validation of a small biotech and, in many ways, this was also its ‘dream’ or end goal. But in the past few years, some companies have proven that retaining rights, and not partnering, can be an attractive strategy, albeit a challenging one. By retaining rights to a new compound, a small company can build its commercial infrastructure, launch the product itself and start generating revenues. This route was in fact the way that many biotechs in the US became real success stories.

Innovation in new drug development can provide the basis for organic growth. Amgen, Genentech, Genzyme, Gilead Sciences and other successful biotech companies have grown to be as big as "big pharma", undisputedly following the route of commercialising their own products and in retrospect, this proved to be not only possible, but correct as a strategy. Amgen was founded only in 1980 and it raised US$40 million in its IPO in 1983. Genentech is a similar success story. Founded in 1976 by a biochemist and a venture capitalist, the company went public in 1980 raising US$35 million. The history of Gilead Sciences illustrates this point well. The company was formed in 1987 and even though it formed a few collaborations early on, it was able to acquire NeXstar Pharmaceuticals in 1999 and then Triangle Pharmaceuticals in 2003, when it announced its first full year of profitability. Today, Gilead Sciences had a market cap of US$30 billion in 2006 and US$80 billion today

Overall, for a small company, there are many advantages in not partnering – a partnering deal will normally involve a royalty rate, which in most cases tends to be in the ‘teens’ range. However, despite many executives’ and investors’ personal views, there is no ‘acceptable royalty rate’ that applies across deals. Every deal is different from the next so each one has to be financially analysed taking into account the cost of goods, R&D, the sales effort (medical reps), marketing (promotion) and, of course, the product sales forecast. A product for a broad medical indication that requires a very large Phase III program and entails visits to most of the primary care physicians is very difficult for a small company to fund internally. In such a case, a royalty rate in the teens may be deemed fair for the two partners because the costs are very high, even if sales are also forecasted to be very high. Unfortunately, royalty rates are usually a confidential and sensitive part of commercial deal terms and, as such, are rarely disclosed publicly.

Our Mission: Pharma Partnering

Identifying products to license-in
Identifying partners to license-out
Research Collaborations
Raising Finance
M&A and Going Public
Developing best practices in partnering

Investors in the Pharma-Biotech sector

Pharma Biotech Investors Funds Funding Capital

The Pharma & Biotech market has generated very attractive returns for many investors, but at the same time has produced losses to other investors. The sector contains a large number of extra-high risk companies, many of which are founded on weak foundations and pursuing projects that are unlikely to either reach the market or to be seen as attractive opportunities by big pharma companies for commercialisation. The professional large investors recently focus much more on mature companies with products and a pipeline. Biotech companies are finding it harder to receive funding and many companies that manage to raise substantial amounts of private equity do not provide the anticipated exit to their investors.

Small, private companies may be able to progress development of their compounds or technologies up to a point, but are very unlikely to be able to commercialise pharmaceutical products on their own on a worldwide basis, as they will not be able to set up the infrastructure for marketing and distribution. As a result, the vast majority of biotech companies will need corporate deals with pharma companies that have the means to commercialise on a large scale and around the world. Unfortunately many companies do not “focus on customer needs”, in terms of recognising that actually big-pharma (and medium-size pharma!) is the end-customer, not the stock markets. Pharma deals are crucial to biotech companies and investors can play key role and can drive corporate deals, much like they drive IPOs and M&A.

Best Biopartnering Conference Europe Pharma Licensing Conference

Conference Highlights

An international interface

The Life Sciences sector has no borders. Main hubs being Europe, North America and Asia.

A focus on Partnering.

One-to-One company meetings, networking. Bringing together CEOs, CFOs and senior executives in partnering and finance.

Raising Finance

Attracting investors and identifying investment opportunities. Going public.

Developing best practice in partnering

Gathering experts in putting together collaborations, sharing knowledge and experiences.

Exclusive for Pharma & Biotech

Organised with the needs of the sector in mind.