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How Contract White Space Becomes the Gray Area of a Deal (Part Two)

Posted By Genevieve Fraser, Monday, October 30, 2017
Updated: Saturday, October 28, 2017

This picks up where ASAP Media left off in Part One of our coverage of “Reading Between the Lines: Living in Contract White Space” explored the “gray area” between contract signing and actual implementation on day two of the 2017 ASAP BioPharma Conference September 13-15 in Cambridge, Mass. USA. The presenters were Christine Carberry, CSAP, chief operating officer at Keryx Biopharmaceuticals, Andy Eibling, CSAP, vice president of alliance management at Covance, the drug development business of LabCorp, and Brian O'Shaughnessy, a partner at Dinsmore & Shohl and president and chair of the board of LES, the Licensing Executives Society (USA and Canada), which focuses on licensing and commercial transactions involving intellectual property (IP) rights.

All presenters agreed that in general no one talks about when things go wrong. People focus on success. But change agents happen. People need to think more about likely situations that arise, about what can change. According to Carberry, biopharma negotiations offer special problems when teams spend 80 percent on work related issues and 20 percent on the exit. The exit can be what’s tricky.

“How should you run an alliance?” Eibling asked, shifting the focus of the discussion. “There’s a boilerplate we’d like to follow vs. figuring out what happens when everything blows up. Think of audit provisions; once you pull the trigger, everyone shifts into distrust mode.”

He reminded them that governments impose transparency and accounting, a carefully defined system of disclosures so the process is established. But it’s your responsibility to address issues early on, before they become an issue. 

“Trust is everything in an alliance. Trust is key,” Eibling stated. “Some think controls run in the face of trust, but it’s the opposite. The process helps establish trust building. If you have trust, you can more easily get to benchmarks. My motto is ‘no deal without a meal.’ Sit down over lunch with your counterpart to build trust.”

 

Shifting focus once again, Eibling questioned what’s missing from agreements. “External communications need to be on-going. ‘What’s material and what’s missing’ is what’s needed when everything blows up. The question is, what can be done during the deal making process to improve success?”

O'Shaughnessy: “Licensing is a full contact sport and needs the full team—lawyers, tax experts, scientists, business folks. Speaking from a LES prospective, they don’t appreciate the growing field of alliance management, so there’s not an effort to bring alliance into the deal process. They need to understand that an alliance team can analyze the details to see problem areas.”

“I had no idea what went on after the deal was signed.”

“Too often, LES views alliance management as a hindrance, as the folks who throw up roadblocks. Alliance management needs to stay in the background and define simple defining principles: This is how we work—from cultural differences to operating principles. When in the grey space, the alliance team will make it work, will look to principles to get through the grey area.”

Eibling: The alliance will shepherd the process, but the alliance needs to remain in the background and let others negotiate. The alliance folks tell them to finish the deal and then we’ll focus on governance, commitments etc. Meanwhile, they need to remain vigilant to see what was contentious, to remain alert to problem areas.

This interaction continues in Part Three of ASAP Media’s coverage of the 2017 ASAP BioPharma Conference session, Reading between the Lines: Living in Contract White Space.”

Tags:  ”First patient  alliance management  alliances  Andy Eibling  Brian O'Shaughnessy  change agent  Christine Carberry  compromise  contract  Covance  Dinsmore & Shohl  due diligence  first visit”  governance  Implementation  Keryx Biopharmaceuticals  Licensing Executives Society 

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