Partnerships, timing and product are all crucial factors when small biotech companies want to appeal to the big guys.
A panel of representatives from some of the large pharmaceutical companies discussed what they are looking for, offered advice and answered questions for the hundreds of people who packed the meeting room Tuesday morning during the 2008 Biotechnology International Convention (BIO), happening this week at the San Diego Convention Center.
The future of pharmaceuticals is in neurology. At least that is what the panelists predicted, based on recent trends in the industry.
And some convention attendees are excited about the new direction.
“It’s nice to hear there is a renewed interest in (neuroscience),” said Keith Gary, a neuroscientist and director of program development for the Kansas City Area Life Sciences Institute.
He said the field was booming in the 1990s, but has since dwindled off. Now it has a second chance to shine.
Jennifer Tsai, an associate instructor attending the conference on behalf of the Academic-Industry Bridging Project for Biotechnology and Pharmaceutical’s National Programs in Taiwan, said she also is pleased with the industry’s new direction.
“I found out big pharma is interested in oncology and neurology,” she said. “Our office has made very similar changes.”
Panelists also discussed the topic of partnerships. For small companies, partnerships offer funding and resources they often could not produce on their own.
But knowing when to form a partnership and with whom one should be formed can be tough issues.
While early stage deals are becoming more common -- and the price tag attached can seem large -- panelists said it is better to hold out.
“If you can afford to move a compound ahead on your own, do it,” said Perry Karsen, senior vice president of business development for Celgene Corp. (Nasdaq: CELG). “The value comes later on, so if you partner early, your ability to do other partnerships (decreases).”
When a deal is made in the early stages, a company only receives a fraction of the total deal value. The rest of the money is given as milestones are met. Therefore, waiting longer to make a deal will increase a small company’s chances of realizing the total value, said Barbara Yanni, vice president and chief licensing officer for Merck & Co. Inc. (NYSE: MRK).
But at the same time, it is important for companies to develop partnerships before they get in over their heads.
“I think it’s worth doing for a lot of smaller companies because they can’t handle a dual track,” said Thomas Picone, vice president of strategic alliances and global licensing for Schering-Plough Corp. (NYSE: SGP). “It could hurt management, the compound team, by trying to do dual track.”
Regional partnerships also can be valuable to small companies. Finding a partner in one country or other similar region can allow a company to maintain some independence in one market while keeping the reins in another.
Tsai said she found the partnership information especially helpful.
“We’re looking for partnership opportunities, especially with licensing,” she said.
Now she has a better idea of how to successfully meet those goals when she returns home.
With myriad biotech companies around the globe vying for attention, it is important for the small companies to know how to appeal to the big pharmaceutical companies.
The science behind a compound still is important, but the end product and its marketability are becoming increasingly more important.
But Picone said the importance of both factors changes depending on the specific deal.
“You have to balance that,” he said. “If it is a late-stage compound, you have to look at (the market value). With other stage compounds you don’t have enough (history) to look at.”
Panelists said it can be important for companies to consider what buyers are looking for, because that ultimately is what will matter when the product is ready to be marketed.