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Riding the Waves with David and Goliath: How a Venerable Big Pharma and a Plucky Little Biotech Sailed Through Storms to the End of the Rainbow

Posted By Jon Lavietes, Monday, October 5, 2020

The ASAP biopharma community is no stranger to big pharma–biotech alliances and David-Goliath partnerships. In general, the story usually centers around an entity with an intriguing molecule accompanied by promising science looking for a partner with deep expertise—and pockets—to help develop the therapeutic candidate into a viable alternative for doctors to prescribe.

Little Biotech Grows Up

But what happens if that ambitious young company eventually wants more? Does its larger ally accommodate its growth and evolution, or is it a sign that the two partners have grown apart? The answer depends on the collaboration—as the old axiom that has been bandied about in ASAP circles seemingly forever goes, “If you’ve seen one alliance, then you’ve seen one alliance.”

On demand now to attendees of the 2020 ASAP BioPharma Conference is the story of one David-Goliath collaboration that successfully navigated—and adjusted to—the little sibling growing up. The session “The Evolution Highs and Lows of a Biotech and Pharma Alliance” shares how the venerable 352-year-old Merck KGaA, Darmstadt, Germany and 13-year-old F-star Therapeutics first started working together in 2011 to explore the latter’s ability to make antibodies and ultimately evolved their collaboration into a complex M&A licensing arrangement in part due to F-star’s transformation from an R&D–focused company to one with bets on a wholly owned portfolio.

Senior Leaders Are a Couple of Blocks Short of Reaching Alliance Heights 

Margarita Wucherer-Plietker, CA-AM, director of alliance management at Merck KGaA, Darmstadt, Germany, began the story by listing six building blocks of alliances as defined by McKinsey:

  1. Strategy – Alignment of partnership objectives
  2. Culture and communication – Open and trust-based communication among all parties
  3. Operations – The establishment of a new operating model and performance metrics
  4. Governance/decision making – Adherence to key decision processes, and metrics for speed of decision making, stage gates, and timelines
  5. Economics – Defining how much value will be created by the partnership
  6. Adaptability – Proactive planning of how to tend to the relationship over time in the wake of industry and organizational shifts

She said that, according to McKinsey, executives tended to be aware of the importance of strategy, governance, and decision-making processes—parts of the organizational machine that C-suite executives are steeped in regularly—to driving alliance success. However, they also had a proclivity to undervalue intangible factors like culture and communication, as well as adaptability. Guess which of these cornerstones proved to be more valuable to Merck KGaA, Darmstadt, Germany, and F-star? (Spoiler alert: senior leaders have it all wrong!)

Data-Driven Mindset Fuels Alliance Growth 

When Sarah Batey, PhD, vice president of project and portfolio management at F-star Therapeutics, started at F-star in 2011, the collaboration was in its infancy with small teams of scientists working with a standard licensing agreement. The parties gelled quickly, finding that they were able to communicate openly and deliver consistently “against well-thought-out, achievable-but-still-demanding work plans.” The companies also found that they were simpatico in that each applied a “similar science and data-driven mindset” to their work, according to Batey.

The trust built over time ended up being a key factor down the road when the collaboration expanded in 2017 to include multiple assets, including the clinical candidate FS118. The collaboration expanded again in 2019 when F-star retained FS118, while Merck KGaA, Darmstadt, Germany, exercised the option for one discovery-stage program and retained the option for a second one. In 2020, the partnership would evolve again in the face of COVID-19 (more on that later) as Merck KGaA, Darmstadt, Germany, exercised another option on an immune-oncology collaboration and the companies added two more preclinical discovery programs. 

Even today, “the collaboration still thrives based on the joint data-driven decision making,” said Batey, who added that the team members rarely consult the contract to resolve a situation, an example of their ability to smooth out differences.  

Jiffy Lube: Seamless Execution of Governance Greases Well-Oiled Machine

How did these two organizations manage this growth? They devised a traditional model, with a Joint Steering Committee (JSC) overseeing Joint Project Teams (JPTs) for preclinical and clinical assets. It would turn out that nothing more intricate was needed because all stakeholders put in the necessary work to make the governance mechanisms function like a well-oiled machine. The senior leaders from both companies who sat on the JSC were well versed on the alliance’s mission and value propositions, and they made themselves readily available for critical discussions. The JPTs were made up of passionate scientists who deftly organized communications and project workflows. They would prepare detailed presentations at appropriate junctures for JSC meetings in order to thoroughly brief the leadership team ahead of moments when critical decisions needed to be made. (This seamless flow of communication between the JPTs and JSC stands in stark contrast to an alliance presented in another BioPharma Conference session that initially struggled to manage what information got delivered to its top committee.)

That isn’t to say that they didn’t have to make adjustments. The smaller F-star wasn’t accustomed to working with larger bureaucratic structures, so the companies agreed to prioritize stage-gate decision-making moments and make sure that alignment was achieved on important details.

On an operational level, alliance managers served as a “central point,” to whom project managers and leads would reach out whenever there was a question about budget, messaging, timelines, or another key element of the alliance, according to Wucherer-Plietker. Alliance managers proved to be effective gatekeepers, as they were able to efficiently facilitate engagement with business development, legal, IP, and other functions whenever they needed to be consulted.

“The key learning here is that a clearly defined touchpoint—a presence in the teams—between all parties and the central touchpoint, alliance management, was very helpful for this alliance to bring projects forward,” said Wucherer-Plietker, who pointed out that the importance of this communication flow contradicted senior management’s underestimation of this building block, as detailed in McKinsey’s findings.  

Stormy Weather and a Sea Change

This streamlined operation helped the collaboration sail through what Batey called “stormy waters” over the last several years.

“Even best laid plans can’t necessarily predict every future eventuality,” she reminded viewers.

The alliance has endured waves created by the departure of key personnel, including champions of the collaboration, and F-star’s evolution from a platform company into an organization with a proprietary pipeline. When F-star was making its move, it approached its partner about obtaining increased development and commercial rights for FS118.

“Ultimately, a change in pipeline prioritization resulted in the program fully reverting back to F-star, while Merck took the rights to an alternative program,” recounted Batey. The sides were able to negotiate a mutually valuable agreement for both sides—Batey called it “the rainbow at the end of the storm.”

The alliance also experienced external turbulence, or “at-sea waves,” said Batey, continuing with the oceanic theme. Like most biopharma collaborations, it confronted changes in the competitive landscape and scientific challenges related to target validation. However, in the presentation Batey spoke mostly about the surfing competition–sized wave disrupting everyone’s sea cruise: COVID-19. The pandemic allowed the parties to take a step back and evaluate the strategy and objectives pf the partnership, as well as what was best for patients. This is when Merck took the early option on the immune-oncology collaboration and added two more.

“In both cases, we really felt that those storm waves were a key trigger to critically review the collaboration and ultimately, in the end, bask in the rainbows. This was due to the strong relationship and trust that we had built. The strong boat was able to face the waves,” said Batey.

Wucherer-Plietker boiled down how the two organizations were able to find opportunities in times of crisis to four steps:

  1. Both parties acknowledged and appreciated that changes in the landscape could potentially cause a divergence in the parties’ interests and viewpoints.
  2. They maintained open communication on common goals and diverging interests as they related to strategic and pipeline changes.
  3. They developed a joint view and aligned objectives vis-à-vis the divergence in their respective priorities that resulted from the crisis situation.
  4. This allowed the allies to put initiatives in place that would help exploit whatever points of value remained in the collaboration.

Communication, Adaptability Turn Crises into Opportunities

To conclude the panel, Wucherer-Plietker preceded a list of key takeaways with the observation that “these building blocks, communication and adaptability, should never be underestimated.” She began the list with the assertion that an alliance is unsustainable without alignment around “high-profile alliance goals.” Wucherer-Plietker added that “these goals can be built and elevated over time.” The second key to success: enthusiastic teams who collaborate closely and communicate openly, not only when times are good but also when tough conversations are necessary. Next, trust, as always, is essential in an alliance. Wucherer-Plietker listed three ways to build it in the pharma context: 1) reliably deliver targets, 2) be transparent and define communications protocols at all levels, and 3) expect and appreciate change to the business and scientific environment over time. Finally, she urged viewers to view change as “an opportunity, not a crisis,” as they represent “inflection points” that could lead to new or reconfigured deals that work better for everyone.

More ASAP BioPharma Conference sessions, both prerecorded presentations and keynotes and panels from the livestream portion of the event, are available at the event’s portal, so check them out now for the latest trends and perspectives from biopharma alliance thought leaders.

Tags:  alignment  alliances  Big Pharma  Biotech  collaboration  communication  culture  Darmstadt  F-star Therapeutics  Germany  governance  M&A licensing  Margarita Wucherer-Plietker  McKinsey  Merck KGaA  operations  partners  partnerships  portfolio  R&D  Sarah Batey  Strategy  therapeutic 

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Reset, Relaunch, Rebirth: Rejuvenating a Longtime Alliance to Create Future Value

Posted By Michael J. Burke, Thursday, October 17, 2019

What happens when a more than three-decade-old alliance that has gone through its share of turmoil nears the end of its contractual life? Does it simply wind down in collective exhaustion, ending with a whimper? Does it crash and burn? Or can it somehow rise from the ashes of the past?

            Two European biopharma companies struggled toward the answer to that question, and ended up resetting and relaunching their alliance to mutual benefit. Eric Ferrandis, CA-AM, vice president of strategic alliances at Ipsen, and Fabrice Paradies, director of industrial business development and global commercial alliance at Debiopharm Group, described the process of bringing their two companies’ productive partnership back from the brink and back to life in their presentation, “Partnership Reset and Launch: How to Complete the Past?” at the recently concluded ASAP BioPharma Conference 2019, held Sept. 23–25 in Boston.

            Paris-based Ipsen, a 90-year-old company specializing in oncology, neuroscience, and rare diseases, and the 40-year-old Debiopharm, a drug development company based in Lausanne, Switzerland, had an alliance going back to 1983 that had been very productive for both of them. This 35-year partnership sprang from a series of agreements and amendments for the licensing of Triptorelin—brand name Decapeptyl—a drug used in the treatment of advanced prostate cancer, endometriosis, and breast cancer, among other conditions.

            The DKP alliance, as it was known, created value for both companies, but as Ferrandis and Paradies acknowledged, it also had been set up in such a way as to cause “pain points” that those working on the alliance had never been able to address holistically. So what to do?

            As the alliance agreement neared its end by mid-2018, both companies’ CEOs agreed that a new alliance framework must be put in place, with negotiation leads empowered to get a new contract signed by the end of that year and relaunch the alliance for the long term. Accordingly, by July 2018 the companies hired the consultancy The Rhythm of Business to help get their partnership back on track by identifying the key problems that had hindered its efficient functioning and to assist in rebuilding a common vision for the alliance.

            The initiation of the reset process involved two workshop sessions covering two days and involving personnel from key functions across both companies. Among the key findings that emerged from those sessions:

  • Both Ipsen and Debiopharm still saw a promising future for the DKP alliance.
  • They also felt that the alliance’s current economic model would not unleash the full growth potential of the brand.
  • More indications launched in more territories globally would deliver greater value to both partners.
  •   Greater proactive investment in product innovation and life cycle management was required for continued success and growth.
  • The long-term relationship had laid a solid foundation, but some deep-seated divisions and differences still needed to be overcome.

Armed with these findings, the two companies’ negotiation teams—primarily three people on each side, with support from above and below—set about to restructure the alliance and set it on a better course, by:

  • Aligning financial terms in the new economic model, across all formulations of the product
  • Developing a joint life cycle management plan that fuels appropriate product innovation
  • Strengthen alliance governance to support the more ambitious economic model and operating framework
  • Working hard to build trust and ensure transparent and effective communication

As Ferrandis commented, “Everything is about trust.”

            As the new agreement was being negotiated, it was agreed that the old contract would remain in effect and the status quo of the alliance would continue on both sides. Other key points, according to Ferrandis and Paradies:

  • The need for a reset was agreed on by both companies.
  • There was buy-in by both companies’ senior leaders and leadership teams.
  • The revenue from the DKP alliance was important to both companies, so it was clearly understood that the reset/relaunch effort needed to go deep into both organizations.
  • The negotiation teams included representatives from alliance management, business development, and legal, and had input from a number of other functional areas—as well as critical support from senior leaders.

Both Ferrandis and Paradies admitted that while everyone involved wanted to “move fast” on the reset effort, it was important to lay the groundwork even before negotiations commenced to get the partnership relaunched. “We had to change the mindset” internally, said Paradies. Doing this work ahead of time—and having “the right people in the room,” as Jan Twombly, CSAP, principal of The Rhythm of Business, noted—led to a “new partnership spirit” in the alliance, according to Ferrandis.

            Ferrandis also cited leadership as “the greatest alliance management skill,” adding that behaving as a leader includes going to senior leadership when necessary to get buy-in and help get issues resolved.

            A new agreement was signed in 2018 that provided for 15 additional years of partnership between Ipsen and Debiopharm, featuring a new economic model with better-aligned financial terms, a new R&D framework with cost sharing for codevelopment mechanisms, new governance giving Ipsen final say over development and commercialization and Debiopharm control over manufacturing, and what the copresenters called a “commercial bold ambition.”

And once the new contract was signed, senior company personnel celebrated with a joint dinner in Montreux, Switzerland, on Lac Léman (Lake Geneva). The moral? For the rebirth of a long-running alliance like this one, said Ferrandis, “Don’t forget to celebrate each time you can.”  

Tags:  alignment  alliance management  codevelopmen  Debiopharm Group  Eric Ferrandis  Fabrice Paradies  Ipsen  negotiation  partner  partnership  Partnership Reset ASAP BioPharma Conference  R&D 

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Mayoly Spindler’s Stéphane Thiroloix: More on What CEOs Expect from Alliance Management

Posted By John W. DeWitt, Friday, September 9, 2016

Yesterday, Mayoly Spindler’s CEO Stéphane Thiroloix kicked off the opening plenary of the 2016 ASAP BioPharma Conference. His hour-long presentation and Q&A discussion riveted attendees and teed up key themes for the remainder of the three-day event at the Revere Hotel Boston Common, which was attended by more than 150 life sciences and healthcare partnering executives from around the world. A perennial topic of discussion among alliance execs, regardless of industry, has been how to make what alliance executives do top-of-mind in the C-suite—and how to educate and influence senior executives on how better to leverage alliance management to support the company’s strategic goals. Thiroloix’s talk resonated—because he truly “gets” alliance management and how it fits into an organization. 

Thiroloix has pushed to expand the role of alliance management in Mayoly Spindler, which focuses on gastroenterology and dermocosmetics—so he’s a fan of alliance management and argues that it now plays “a central role in what we do in the healthcare industry.” He’s also crystal clear on what he expects from alliance executives—and what he doesn’t want. I talked to several veteran chief alliance officers who described it as perhaps the best presentation they’ve heard at an ASAP conference, and as I’m writing this blog during the closing session of the conference, attendees are still exclaiming the value of this session for them. 

Check out our earlier coverage of his plenary talk as well as my colleague Cynthia B. Hanson’s strikingly thoughtful Q&A blog post with Thiroloix in August. And here are more nuggets of insight Thiroloix offered during his session: 

  • Align with C-suite processes. “Use the C-suite’s governance [process]. If you can fit your into the normal C-suite governance agenda, it’s better. Be part of the monthly meeting, versus scheduling an alliance meeting the C-suite.”
  • Repeat, repeat, repeat. “Alliances are complex. The rest of my life is also, so don’t expect me to memorize, remind me again, even if it feels incredibly basic. I will stop you if I don’t need more information.”
  • Be specific and don’t assume knowledge. “Whenever you talk about a partner, be ultra-specific. When [my alliance manger] Fabienne Pioch-Laval talks to me about a partner, I don’t hear the first sentence. I’m thinking about, ‘this is the one with the product coming out 2021.’ You have the full picture, but I don’t. Don’t assume that [senior executives] know the specifics. Keep telling me what, why, what for, and how.” 
  • No surprises. “Your role is to anticipate, to manage changes that come from the outside, and from the partner, which is perceived to be outside the company. But make sure [communicating these changes] doesn’t happen in groups. Make sure executive team members know in advance that this is coming up—working the meeting before it happens. The best way to do that is to get their teams to understand, make their teams look good, make sure they convey to their bosses [the information they need]. Help them help you—the C-suite can create interpersonal goodwill.”
  • Give timely support that builds partner. “There are a couple of companies where I have to make myself visit, but if something goes wrong, I don’t know how much I would want to fix it” because of the poor nature of the relationship. “And there are companies that even if something goes wrong, I still want to work with them. Try to find opportunities for senior executives to be in a positive relationship with each other. Make sure your CEO or head of R&D makes that phone call of congratulations for your partner’s success. Write me that message that I can email onto the partner—so that when there’s a bit of turmoil they’ll do the same,” and have the same goodwill towards your company.
  • Don’t bring the CEO your gripes about BD. “One thing that I really don’t want to do is to sort out issues between business development and alliance management. One of the functions where you can step on toes is business development. But you guys can work it out. I don’t want to be involved—I’m just being honest with you.” 
  • Bring your partnering magic to C-suite executives’ teams. “At the end of the day, it’s a function, it’s a set of technical skills, a 360-degree understanding, but there’s an art, an element of humanity, interpersonal dynamics, an element of human magic. I want to see you spending a lot more time with the teams of the C-suite members, so they are informed by their teams. Collaborating in governance just works better naturally—so this is really the key message.”

Tags:  alliance manager  business development  CEO  chief alliance officers  C-suite  executives  Mayoly Spindler  partner  R&D  Stéphane Thiroloix 

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The Importance of Keeping a Steady Hand on the Wheel and Stepping up the Pace When Managing Acquired Alliances

Posted By Cynthia B. Hanson, Wednesday, August 31, 2016
Updated: Saturday, August 27, 2016

“How does the alliance manager’s responsibilities change when a company and its alliances are acquired?” That was the key question participants plumbed in the fast-paced session “Navigating the Speed Bumps and Driving Decisions: A Roadmap for Integrating Acquired Alliances” by Katherine Kendrick, CA-AM, director of alliance management at Elanco, Eli Lilly and Company. The session was part of the programming at the 2016 ASAP Global Alliance Summit, “Partnering Everywhere: Expert Leadership for the Eco­system,” held at the Gaylord National Resort & Convention Center, National Harbor, Maryland in the March. Kendrick also reprised her presentation for her April 14 ASAP Netcast webinar.

 

“Each alliance you acquire travels at different speeds,” Kendrick emphasized early on, adding that speed bumps are inevitable and likely will require quick moves with a firm hand on the wheel. When companies are purchased, the alliance manager needs to very specifically address a range of new partnering challenges, including:

 

·         Questionable alliance health status

·         Contract obligations not met by the acquired company

·         Lagging development or progress

·         Misaligned expectations

·         Disparity of information

·         Competitive challenges

·         Demotivation

·         CRO/CMO assignability of contracts

 

Central to a smooth transition is ordering the process of investigation, inquiry, and engagement with the main stakeholders, said Kendrick, who has considerable alliance management experience and more than 15 years of pharmaceutical experience with an emerging market expertise. After working to ensure the delivery of diabetes pharmaceutical and device development partnerships and commercial relationships, she assumed a leadership role in animal health at Elanco in 2015 as director of alliance management for research and development managing the strategic alliance portfolio of external innovation and mergers and acquisitions.

 

The process involves orchestrating clear communication between partners to build alliances teams, establish governance, and drive value; implementing divestiture and termination decisions that are respectful of the partners and individuals; addressing integration challenges that can cause blips in reporting and cash flow, she explained while swiftly flipping through her deck.

 

One way to coordinate that kind of complexity is to think of yourself as a smartphone app, she advised. Be an efficient technological program capable of:

·         Simplicity of interface with your senior leadership

·         Single point of contact for multiple aspects of relationships

·         Provision of integrated solutions

·         Ability to managing multiple tasks

 

Keep in mind, however, that after studying the new map that comes with your acquired alliance, you may conclude that it’s better to terminate, renegotiate, or sublicense.

 

ASAP organizes monthly webinars that are free for ASAP members, but available to non-members for a fee. Click here more information on ASAP webinars like Kendrick’s, or just register for ASAP’s September webinar that will discuss ‘Executing in the Field: The Key to a Sustainable’.

 

For three days of more insightful presentations on topics of critical interest to partnering professionals in life sciences and healthcare, don’t miss the 2016 ASAP BioPharma Conference.

Tags:  alliance health status  alliance managers  ASAP netcast webinars  Elanco  governance  Katherine Kendrick  partnerships  R&D  renegotiate  senior leadership  stakeholders  sublicense  sustainable  terminate 

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How to Partner for Open Innovation: A Sneak Preview of John Bell’s Forthcoming ‘ASAP Quick Take’ at the 2016 ASAP Global Alliance Summit

Posted By Cynthia B. Hanson, Thursday, February 11, 2016

Addressing various facets of “partnering everywhere” in our rapidly evolving world, four experts are slated to present “ASAP Quick Takes” (patterned on the “TED Talks” format) at the ASAP Global Alliance Summit. This year’s summit is organized around the theme “Partnering Everywhere: Expert Leadership for the Ecosystem,” and will be held just outside the US capital at the Gaylord National Resort & Convention Center, National Harbor, Maryland.  

Among the executives in the ASAP Quick Takes line-up is John Bell, PhD, head of external innovation at Johnson & Johnson Consumer, who will present the talk “Creating Partnering Opportunities through Open Innovation.” Bell brings distinctive credentials: He has worked as head of strategy & new business at Philips Research, head of strategic alliances at Philips, strategy consultant at PricewaterhouseCoopers, and as an assistant professor. Despite his busy schedule and prominent daytime job, he somehow also carves out the time to teach alliance strategy at the University of Tilburg in the Netherlands. During a recent interview, I asked Bell for some insights on his upcoming ASAP presentation. 

How has Johnson & Johnson led the way in corporate alliance management through structuring and outreach? 

In the Consumer division, we work closely with start-ups and strategic suppliers. For instance, with some of our strategic suppliers, we developed a way of working that activates the innovation capabilities of these partners to come up with innovative solutions. In the past, we typically approached suppliers with the question to make a specific product at a specific price point. Today, we share with a select group of partners what kind of consumer needs we aim to solve. Their R&D and our Johnson & Johnson R&D people then start to co-create novel solutions. 

How does your hands-on workshop help alliance managers sharpen their skills and expertise to broaden alliance activities in their organization? 

By sharing some of our learnings and providing insights into the steps we have taken and are still making, we believe that alliance managers can learn what is relevant to their own organization. 

What are some of the ways Johnson and Johnson supports strategic development to capture valuable market and competitive insights? 

Johnson & Johnson has established so-called Innovation Centers in the heart of eco-systems around the globe: San Francisco, Boston, Shanghai, and London. In those Innovation Centers, there are 25 to 30 business developers, dealmakers, alliance managers, and legal and financial people. They focus on identifying and fostering innovation across the pharmaceutical, medical devices, and consumer ecosystem, and invest in early transformational “ideas” and start-ups. These innovation centers act as a first touch-point to the market and competitive developments. 

How does Johnson & Johnson lead the way in effectively managing alliances and establishing trust and stability in partnerships for maximum profitability? 

Maximizing profitability is not per se the main motivation for our partnerships. In many instances, co-creating innovative solutions is the main objective of our partnerships. We have dedicated alliance managers in place who manage the partnerships typically from inception until integration into our business. On top of that, we typically develop a network of multi-level relationships with our partners to strengthen the ties and understanding between Johnson & Johnson and our partners. One of our ambitions is to become the partner of choice, which implies that we value trust, openness, and win-win.

Tags:  allainces  alliance strategy  John Bell PhD  Johnson & Johnson Consumer  medical devices  partnerships  pharmaceutical  Philips  PwC  R&D  start-ups  University of Tilburg 

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