Originally posted on 3/11/2013
Where Manoj Bhatia, CA-AM, senior product marketing manager of go-to-market strategy for the midmarket at Cisco, covered “David-Goliath” partnerships as they relate to the tech industry, Pannie Trifillis, Ph.D., CA-AM, director of alliance management at PTC Therapeutics, and Christophe Sarry, CA-AM, global alliance director at F. Hoffman–La Roche, tackled the issue from the pharma perspective in one of the final sessions of last week’s 2013 ASAP Global Alliance Summit in their presentation “Does Size Matter?: Handled Skillfully, Alliances Between Small and Large Companies Can Reap Big Benefits for Both.”
PTC and Roche are currently working together on two major collaborations. A few years ago, they first engaged around GEMS (Gene Expression Modulation by Small Molecules) technology. They formed a second initiative—one of the 2013 Alliance Excellence Awards runner-ups in the Individual Alliance category—dubbed the Spinal Muscular Atrophy (SMA) alliance in which the two companies have teamed up with the Spinal Muscular Atrophy Foundation to find a cure to a devastating disease that takes the lives of thousands of infants each year.
The two companies make for an interesting contrast. In the wake of its acquisition of Genentech, Roche now essentially has two large R&D organizations to manage. Contrast that to PTC, which has fewer employees (125) than Roche has partners (more than 150).
As the session title might suggest, you got the sense from both Trifillis and Sarry that the answer to the posed question is that the relative sizes of a biotech and a Global 1,000 drug manufacturer end up dictating the roles each plays in an alliance primarily, not the power dynamics of the relationship. The two scientists fittingly opened with a nature analogy to describe a “symbiosis” between the two entities; in the depths of our natural bodies of water, the cleaner shrimp species gets its nourishment by cleaning parasites, insects, algaes, and other matter off of the moray eel—the latter is essentially pampered with a bath, while the former enjoys a free meal.
Similarly, large pharmaceutical players and small biotechs have common goals: to originate new therapies, obtain regulatory approval, garner support from payers, be first to market, and maximize drug sales, according to Trifillis and Sarry.
This is not to say differences don’t exist. Small pharmaceutical companies are flexible, focused, nimble, have direct oversight from the company’s most senior management, and tend to be highly innovative. They also are limited financially as compared with their bigger brethren. On the other hand, big pharma has a significant wealth of available resources, and can reach high economies of scale with its global operations. Its large alliance portfolio enables an exchange of information across alliances and a high degree of learning internally.
Of course, with size comes a little more complexity and red tape, as processes must be set up to streamline operations. And, yes, these processes do impact the speed of decision making for an alliance.
“We can’t work without [these processes] as a large company,” said Sarry, who added that one of the primary challenges faced by the bigger organization is aligning resources and ensuring that they go to the right projects.
Trifillis saw one major benefit to the sharply distinct corporate cultures—the differences justify alliance management.
“We have a job,” she quipped.
Harnessing these differences brings great benefits to both sides. Biotechs provide large pharmaceutical companies: 1) early drug discovery capability, 2) specialized expertise (e.g., orphan drugs), 3) flexibility and faster decision making, which can help advance a program far more quickly than a large pharmaceutical company ever could, and an 4) innovative and entrepreneurial atmosphere.
A company like Roche brings to PTC a high degree of cost- and risk-sharing. With its abundant resources, Roche can leverage technology for new therapeutic areas and maximize the smaller partner’s expertise (particularly in expensive areas like cardiology and oncology which might be out of the smaller entity’s reach). On the commercial end of the drug development cycle, the large pharmaceutical’s existing sales and marketing engines can help drive the biotech’s drug to success in the marketplace. If nothing else, a larger company’s involvement offers validation of the smaller organization’s research.
The keys to making these types of relationships work? It all comes down to respect and trust, said the presenters. Know what is important to the partner, define the needs of the alliance up front, establish criteria for success early, manage resources skillfully, and maintain transparency while keeping an eye on common goals along the way.
Sarry said that it is crucial to be proactive and detail the large company’s formal processes in the alliance’s start-up phase, long before the biotech is confronted with a situation that involves cutting through rolls of red tape. Trifillis agreed.
“If expectations are set up front that it will take this much time, we can live with it,” she said.
In the bigger picture, a strong relationship has many benefits, even if a compound never reaches the market. You never know when you may need that partner again down the road. Laws of karma are certainly at play, so both sides have plenty of incentive to play nice.
“Drugs die, but relationships last,” said Trifillis.
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