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How to Keep On Keeping On: Sanofi and Bristol Myers Squibb

Posted By Administration, Friday, June 20, 2014
Originally posted on 11/21/2013

The first afternoon session on Thursday at the 2013 ASAP BioPharma Conference, “Long May You Run: Inside the Sanofi-Bristol Myers Squibb Alliance,” examined how a decade-plus collaboration was kept going between, asMike Iafolla of Bristol Myers Squibb put it, “a very American company and a very French company.”

Iafolla and his counterpart at Sanofi,Thierry Saugier, discussed some of the key points and nuances in the alliance, principally involving Plavix, which began in the early 1990s and continued through the loss of patent exclusivity in the United States last year. Like most alliances, the partners in this one were very different: not only from different cultures, but having different investment philosophies, decision-making processes, and approaches to risk, among other areas, according to Iafolla. Yet in the face of both internal and external challenges, Sanofi and BMS teamed up to develop, produce, market and sell what became the second-largest brand in biopharma (though Iafolla acknowledged that it will likely soon be passed in that position).

By 2011, Plavix was a “mature brand,” in Iafolla’s phrase, and the two companies had to face and plan for LOE, or loss of exclusivity, and figure out how and whether the alliance would keep going beyond that point. After negotiations, they were ultimately successful, and the alliance was restructured in 2012, with Sanofi now managing the business and paying royalties to BMS.

So how did they do it? According to Iafolla and Saugier, the key points for managing the alliance successfully included:
  • Managing changes within both companies—ensuring continuity and history, and keeping an archive of key data and decisions.
  • Senior management commitment—steering committee included, with relationships built and nurtured early before crises happen.
  • Effective, rapid dispute resolution—not relying only on the contract and governance committees, but also on alternative or parallel mechanisms, and involving legal as appropriate and not in a “paranoid” manner. (As Saugier noted, going to arbitration or litigation means “losing control” over the asset and the alliance.)
  • Clear alliance and business objectives—a recognition that the contract is important but it doesn’t operationalize the alliance, and, as Saugier said, “Sometimes you have to ‘shake the coconuts’ and challenge the status quo.”
  • Culture and people—as Iafolla noted, “you can’t get anything done without good people, and while you always have “brilliant experts,” it’s good to make sure the soft skills are there too to manage the alliance and that in any dispute, you discern between strongly held positions and bad behavior.
  • Watch areas where either company holds a casting vote—it should be used sparingly and with transparency.
Finally, both Saugier and Iafolla stressed that keeping a “permanent dialogue” going and establishing and maintaining trust are number-one priorities.

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