Business Concepts for Biomedical Scientists: Business Development

Part 1: Identifying the Gap

00:00:12.02 Hello, my name is Asha Collins.
00:00:15.08 I'm here to talk to you today about business development.
00:00:17.19 This is part of a larger learning
00:00:19.26 series on business concepts for
00:00:21.27 life scientists. My Asha Collins,
00:00:24.25 I'm a Vice President of the U.S. Clinical
00:00:26.25 Trials and Sourcing at McKesson.
00:00:28.04 I have a PhD in cancer biology
00:00:29.23 and microbiology from the University of Wisconsin
00:00:32.02 at Madison. And today, I'm going to talk to you about
00:00:34.25 business development for scientists.
00:00:36.19 At the end of this talk, you will
00:00:39.27 learn five different things around business
00:00:42.08 development, or as we call it "BD."
00:00:44.25 The first piece is you'll actually be able to
00:00:46.26 understand exactly what this is.
00:00:49.01 So we're going to define business development for you,
00:00:51.01 we're also going to talk you through the different steps
00:00:53.09 of the entire BD process.
00:00:55.01 You're going to understand through that, how BD
00:00:57.14 can help actually drive the visions and goals for your
00:01:00.15 organization, for your business, or for
00:01:02.28 your initiatives. We're also going to talk to you about
00:01:05.05 the different vehicles that you can put in place
00:01:07.17 to have a successful BD strategy
00:01:09.16 and to achieve those goals.
00:01:11.07 And last, we're also going to talk to you about
00:01:13.11 how you actually put together a successful
00:01:15.06 deal structure.
00:01:16.28 So what is business development?
00:01:18.09 Business development really helps drive
00:01:20.21 growth and expansion for an organization,
00:01:22.26 a product, and even a specific brand.
00:01:25.19 The purpose is to help identify
00:01:28.10 and execute on any type of opportunity
00:01:30.25 that can drive revenue, profit, or even just
00:01:34.14 overall growth, or again a business or an initiative.
00:01:37.29 BD is a really critical component
00:01:40.15 of any business strategy.
00:01:43.15 When we're looking at business development,
00:01:47.09 it comes in very different flavors depending on
00:01:49.15 where exactly it sits. For scientists, business development
00:01:52.25 in a biotechnology company can look very different
00:01:56.06 than a business development strategy in academia.
00:01:59.05 In biotechnology, business development
00:02:02.24 is really focused on how a company fills its
00:02:05.02 pipeline. How it commercializes or brings products
00:02:09.00 to market and also how it serves its stakeholders.
00:02:11.24 When you're looking at BD in academia,
00:02:14.27 it's really focused on the lab. How the lab
00:02:17.24 fills its project pipeline and how that lab
00:02:20.29 can also execute successfully on opportunities to
00:02:24.01 publish, as well as to fund the lab, and
00:02:26.24 the overall growth of the lab and the lab initiatives.
00:02:29.27 This is an overview of the entire BD process.
00:02:35.09 And I'll walk you through these four
00:02:38.13 different steps over the next several slides.
00:02:40.17 The first step is identify the gap.
00:02:44.02 To make sure that you have a successful business strategy,
00:02:46.27 you need to know what you're solving for
00:02:49.16 from the very beginning. And that's what
00:02:51.01 this step does. Number two, determine the vehicle
00:02:54.21 that you're going to use to fill this gap.
00:02:56.26 You know what the gap is, how are you going
00:02:59.07 to actually fill the gap? There are a number of
00:03:01.11 vehicles that you can use, and we'll discuss
00:03:03.18 those. Once you determine the gap, once you determine
00:03:07.08 the vehicle, then it's all about execution. And the
00:03:09.22 step number three is all about you executing
00:03:12.11 the deal. In four, you've done the work to understand
00:03:16.18 what your gap is, you know what vehicle you're using,
00:03:18.19 you're executing on it, are you succeeding?
00:03:21.11 So number four teaches us how to
00:03:23.12 go through making sure that you're measuring
00:03:25.20 your success so that you can then go back
00:03:27.23 and look at what additional gaps or
00:03:29.27 remaining gaps you have for the second
00:03:32.20 version of your BD strategy.
00:03:34.04 So, let's talk about this first step.
00:03:38.21 Identify the gap.
00:03:40.08 When we think about this part of the process,
00:03:44.05 there are a couple questions to first ask
00:03:45.26 yourself. You're saying, how can I actually
00:03:48.07 identify the gap? Well, what kind of gaps are
00:03:50.14 you talking about? What do these gaps look like?
00:03:52.28 Those are really good questions and what we're
00:03:55.06 going to do next is talk about the types of gaps
00:03:57.14 that there are and how you can actually go about
00:03:59.25 identifying these different types of gaps.
00:04:02.06 So one, just note, that gaps can be
00:04:05.27 multifarious, they can be extremely diverse.
00:04:08.15 So they can be financial, you have a business
00:04:11.16 you know how much money you need to make or
00:04:13.15 how much you're projecting to make,
00:04:15.07 and maybe you're having a shortfall.
00:04:17.12 And so that's what a gap could be when we talk
00:04:19.15 about financial. It could be a shortfall of
00:04:22.01 revenue, it could be a shortfall of
00:04:23.27 profit, it could also be a shortfall to access
00:04:26.25 to capital. So for example, perhaps you need
00:04:29.17 some additional real estate, or perhaps you need
00:04:32.00 additional equipment, and you don't have the
00:04:33.27 ability to get there.
00:04:35.04 These are all called financial gaps.
00:04:38.04 There could also be market gaps.
00:04:41.04 You have an amazing product, but maybe
00:04:43.19 the market hasn't really understood that yet.
00:04:45.22 So perhaps you have a market share gap,
00:04:48.03 you're not getting as much penetration as
00:04:50.18 you want out of the marketplace.
00:04:51.25 Maybe you have a geographic footprint misalignment.
00:04:55.17 You think that your product should be huge
00:04:58.10 in North America, but it's really only huge
00:05:00.21 in China and maybe Europe.
00:05:02.21 That would be a geographic footprint gap.
00:05:04.28 And then the last piece is access to markets.
00:05:07.27 Maybe you're looking for positions that have a huge uptake
00:05:11.29 of your product, and that's not happening. Access to
00:05:16.07 markets, whether stakeholder or perhaps even actually
00:05:19.13 geographic, are also types of gaps that you can identify.
00:05:22.13 And the last is stakeholders.
00:05:25.28 So we're looking for people to adopt your product
00:05:28.17 and you want to make sure that all the key stakeholders
00:05:30.29 have them, this is where you look at either product
00:05:33.07 adoption or expertise gaps.
00:05:35.04 So these are really the three types
00:05:37.11 of main gaps we think about when we're looking
00:05:39.28 to create a business development strategy.
00:05:42.22 We're looking to understand exactly what you're
00:05:44.24 trying to solve for.
00:05:47.08 These are examples of different gaps,
00:05:50.07 and to make it really crystal clear, what we're talking
00:05:52.11 about when we go through these different ones.
00:05:54.03 So a few years back, Gleevec actually
00:05:58.11 lost its patent, and as a result, Novartis was
00:06:01.02 falling quite short in its cancer drug sales.
00:06:04.00 And as a result, they had to really
00:06:06.19 push hard to look for new drugs to
00:06:09.06 fill this revenue gap. And this was reported across
00:06:13.01 the board, but this particular Wall Street Journal article
00:06:16.00 really talks about it quite clearly.
00:06:18.16 Another piece that we're seeing a lot of companies
00:06:21.18 go through, too, is also a pipeline gap.
00:06:23.27 And we'll actually show another detailed example
00:06:26.20 of this as well. So a pipeline gap means that
00:06:29.19 you have a number of products but perhaps
00:06:32.08 when you look across either sort of preclinical
00:06:34.26 all the way to phase 4 and launch, maybe
00:06:37.18 you don't have your products actually evenly
00:06:39.28 or optimally placed across that pipeline.
00:06:43.28 And so this is what we call a pipeline
00:06:45.27 gap. And this is something that Eli Lilly
00:06:48.11 and their investors were dealing with as well.
00:06:51.24 Here's an example of a stakeholder adoption gap.
00:06:55.23 And so here we see that Novartis
00:06:58.10 was really.. they had a heart failure pill and they
00:07:01.12 were looking for doctors to really uptake this pill
00:07:03.25 and what they were seeing was that they weren't
00:07:05.27 getting their doctors to really prescribe Entresto.
00:07:08.29 This is a key, a really clear example, of a stakeholder
00:07:12.24 adoption gap.
00:07:14.19 This last piece is a market penetration gap
00:07:17.19 example. And so here, J&J was looking
00:07:20.29 specifically at a global market strategy
00:07:23.08 and falling rather short in terms of its penetration.
00:07:25.26 All together, the revenue, pipeline, stakeholder,
00:07:29.02 market penetration gaps are real issues that
00:07:31.21 biotechnology and biopharma companies
00:07:34.05 deal with day to day. And BD is a key
00:07:37.08 success factor in helping them address those
00:07:39.25 and get over these gaps.
00:07:41.17 So now let's discuss how gaps
00:07:44.06 are actually identified.
00:07:45.23 And when you think about gaps and the identification
00:07:48.05 of them, we really think about them in two different
00:07:50.09 ways. We think about the current business model gaps
00:07:52.23 as well as the future business model gaps.
00:07:55.12 And when we're thinking about the current business model gaps,
00:07:58.02 what we really want to understand are
00:08:00.02 what we really want to understand is
00:08:02.09 how are you doing today versus how you thought you might
00:08:04.13 be doing today? And so what you would like to do
00:08:06.22 is sort of take an analysis in what we call
00:08:09.03 gap analysis. You can find a lot more information
00:08:11.17 about this on YouTube videos as well.
00:08:13.19 And what you do is, you map out where exactly
00:08:16.28 you are today across any number of
00:08:19.15 factors, whether it's the marketplace, stakeholder
00:08:22.19 adoption, finances, et cetera.
00:08:24.17 This red pin actually shows where you are today
00:08:27.16 and then you assess, well where do we actually
00:08:29.29 think that we want it to be? And that difference
00:08:32.09 is your actual gap. And you can take that
00:08:34.21 and that will sort of be the driver for how you
00:08:37.00 determine how you move forward
00:08:38.18 with a BD strategy.
00:08:39.29 You also want to think about your future growth
00:08:42.22 gaps. So where will your product be
00:08:45.15 and where will your business be in the future?
00:08:47.01 And where will that market be in relationship
00:08:50.03 to that? And so that's why for the future
00:08:52.11 growth gaps, what we really need are
00:08:54.10 deep assessments about the marketplace.
00:08:56.23 You can think about it in four different ways,
00:08:59.01 you can look at market penetration,
00:09:00.29 so jump forward in your brain and think about
00:09:03.27 three years, maybe even 12 years
00:09:05.17 or 5 years, and where the market
00:09:07.09 is going to be and how your initiative
00:09:09.14 might actually be, in relation to that marketplace.
00:09:13.10 Is your product going to be more or have greater penetration
00:09:17.03 or less? And why might that be?
00:09:19.08 The other part is the product development.
00:09:21.15 Which phase is your product in today?
00:09:23.12 And how might that change in the future?
00:09:25.20 What will that look like and what are some potential
00:09:27.25 gaps in the development of your product?
00:09:29.21 One of the last pieces is market development.
00:09:34.06 Are you moving into a new market? Are you moving
00:09:37.08 into a very established market?
00:09:38.26 Think about your goals in relation to the
00:09:42.03 market and where it will be in the future.
00:09:44.05 And the last piece is diversification.
00:09:46.10 Do you have multiple different product types?
00:09:49.13 Do you have multiple different subsegments of a business?
00:09:51.25 How are you diversifying your different revenue
00:09:54.10 streams or your different goals or your different
00:09:56.09 strategies to actually get to your goal?
00:09:58.22 And how might that diversification change
00:10:01.06 in the future? Having a good assessment of all these four
00:10:04.17 things would really help you understand
00:10:06.22 what potential gaps you will have in the future.
00:10:09.11 And these will give you the tools to help you identify
00:10:11.15 the gaps in the future and the previous ones
00:10:14.24 from the current business model, as well.
00:10:16.16 This is a really good example of how companies
00:10:20.00 actually look at their pipeline to understand what gaps
00:10:23.10 they have in their pipeline.
00:10:24.22 Very commonly, you take a look at all
00:10:26.19 the products you have in your portfolio
00:10:28.09 and you map them against the entire
00:10:31.10 lifecycle. So are they preclinical or have they actually
00:10:35.00 already launched? Any gaps in any part of these
00:10:37.27 phases introduces a strategy or opportunity
00:10:41.10 to actually identify a place where you can
00:10:43.26 put a BD strategy around. And as you can
00:10:46.11 see in this example, there's a clear gap
00:10:49.22 in the clinical and approval space that
00:10:51.26 this company has with their portfolio.
00:10:54.02 This is another example of how companies
00:10:57.10 look at commercial gaps or market gaps.
00:11:00.11 And so here, you can see that
00:11:02.15 they have some active users across the board.
00:11:04.16 They're looking basically at the different demographics
00:11:07.25 of different stakeholders that have taken up
00:11:09.23 the product, where the product is taken up,
00:11:12.15 so again, are their stakeholders adopting it correctly?
00:11:15.01 Or is it a gap? Is the product where it's expected to be
00:11:19.18 geographically? Or is there a gap?
00:11:21.28 And also, this last piece too, is average
00:11:24.18 adherence. So this is that adoption piece.
00:11:27.29 Are people actually taking up this product
00:11:30.09 as we've exactly, as the company expected
00:11:34.07 the product to be taken up.
00:11:36.00 And that's all the different ways that you can
00:11:38.02 look across your business, your product,
00:11:39.28 your initiative, to see are we having
00:11:42.21 a commercial gap? And then drill down
00:11:45.03 to figure out what exactly type of gap are we having?
00:11:47.22 To learn more about this, you can
00:11:53.07 also understand how you identify gaps by using
00:11:56.06 other types of things. There's a lot more that you can do.
00:11:58.27 Here are a few of those things.
00:12:00.21 You can look at more metrics that really understand
00:12:03.13 what exactly are we looking to achieve?
00:12:05.09 So maybe it's 50% market share,
00:12:07.12 but what does that mean for each demographic,
00:12:10.17 for each stakeholder, for each type of product,
00:12:12.17 at what timeline are we looking to
00:12:14.23 achieve those? So those would be understanding more metrics
00:12:17.17 and having really, really clear success indicators.
00:12:20.19 The other piece appears to be doing a lot more
00:12:23.07 analysis around not just revenue and profit,
00:12:25.29 but maybe even operational expenses, or maybe even
00:12:29.15 other types of revenues or profits. So you're getting
00:12:31.03 again a lot more specific about those things.
00:12:33.25 You could also look at market assessment, that we
00:12:37.05 talked about, one thing I didn't talk about was actually
00:12:40.05 competitor analysis. And that would be really, really
00:12:42.18 key to understanding the market as well, too.
00:12:44.28 Not just what you're expecting, but also how
00:12:47.26 do you think other companies and other competitors
00:12:50.21 are going to act in the market in the future?
00:12:52.28 Because that's also going to impact
00:12:54.16 any future gaps that you might also have.
00:12:57.07 The last two things are really going deeper
00:13:00.04 by getting into the stakeholder behavior
00:13:01.26 analysis, so you'll have for each product
00:13:04.14 or initiative or company, or a lab, you'll have a different
00:13:07.27 stakeholder group that you're actually targeting.
00:13:10.07 Different target groups, or different stakeholder
00:13:13.09 groups need different things.
00:13:14.29 And there might be gaps that are very unique to
00:13:18.16 those different stakeholders, so you'll want to drill
00:13:20.18 down to understand those a lot better, so you can
00:13:22.25 address them specifically in a focused manner.
00:13:25.13 And the last thing is root cause analysis.
00:13:28.19 And this is a process you can probably
00:13:31.03 look on YouTube and learn a lot more
00:13:32.28 about. What it really helps you do is to understand
00:13:35.04 not what the symptoms of the problem are
00:13:37.09 but make sure when you're identifying an issue,
00:13:39.23 it is actually the root cause of the actual
00:13:42.17 reason, the actual cause and not just a
00:13:45.18 corollary to the issue or the gap that you're seeing.
00:13:48.12 All of these pieces can really
00:13:51.25 be drawn really closely to academia.
00:13:54.14 You can draw very straw parallels to academia
00:13:57.00 and Anatol's video can really help you understand
00:14:00.01 that more, where he really goes through the questions
00:14:02.09 of how an academic lab utilizes BD,
00:14:05.08 as well as how these gaps are actually
00:14:07.15 identified and filled using a much more
00:14:11.03 lab-centric lens.

Part 2: Filling the Gap and Executing the Deal

00:00:12.02 Hi, I'm Daniel Dornbusch.
00:00:14.10 I've been doing business development for small
00:00:15.26 biotechs and large pharmaceutical companies
00:00:17.19 for almost 20 years now.
00:00:18.29 My educational background, I double majored
00:00:21.20 at Cornell University in English and Biology,
00:00:24.02 got a masters at Tufts Medical School
00:00:25.25 and Emerson College, and then got an MBA
00:00:27.21 from Harvard.
00:00:28.26 Happy to be here today to talk about
00:00:30.18 a little bit more about business development
00:00:31.28 and concepts for life scientists.
00:00:33.29 You've now heard about gaps,
00:00:37.16 how to fill those gaps. And now we're going to talk
00:00:39.15 a bit more about the other parts of the circle.
00:00:41.11 Determining some vehicles to fill those gaps,
00:00:43.15 executing the deal, and then measuring
00:00:45.07 success, and maximizing success at the end.
00:00:48.12 So, some vehicles in order to fill those gaps.
00:00:52.03 We're going to talk today about some deal types,
00:00:54.09 some structures used, how to identify some of those
00:00:57.17 vehicles, and then using vehicles strategically
00:00:59.28 to achieve those goals. But what I really
00:01:02.01 want to emphasize today is that while
00:01:04.01 we're going to talk about some very specific structures,
00:01:06.12 really it represents a continuum.
00:01:08.12 And to be creative in your work and your business
00:01:12.10 development, and your deals, you may create
00:01:14.04 a new structure compared to these.
00:01:15.27 But what you can do with these structures
00:01:17.19 that we talk about today, please combine them,
00:01:19.07 use them creatively, find new ways to do them,
00:01:22.16 and the fundamental piece of all of this is
00:01:24.28 something that I like to call "listen to the science."
00:01:26.25 Do the right types of deals for your technology,
00:01:30.00 for your platform, for the products that you may be able
00:01:31.29 to bring to market and help patients one way.
00:01:34.06 So, to start we had to do some sort of organization.
00:01:37.01 So we put them into five structures.
00:01:38.26 A research collaboration, a license
00:01:41.25 or a license option, a development agreement,
00:01:44.13 a commercialization agreement, and then
00:01:46.02 an acquisition or an acquisition option.
00:01:48.12 Now again, here's some details which we're going to talk
00:01:51.11 about in later slides, but I really want to emphasize
00:01:54.04 again that you can combine these, for example.
00:01:56.17 One way to do it is to combine a research collaboration,
00:01:59.17 a license option, with an option to acquire the company,
00:02:04.20 the technology, the platform.
00:02:05.29 What this can do is something
00:02:07.16 that we call a "build to buy."
00:02:09.03 It's a great way for a larger company
00:02:11.23 and smaller company to get together
00:02:14.07 and learn more about the technology, where
00:02:16.02 the advantages are, how this will be positioned in
00:02:18.06 the market as it moves through development.
00:02:19.22 In early stages of any technology,
00:02:22.07 it can be quite challenging to see where
00:02:24.19 the most appropriate applications
00:02:26.19 are. For patients, for physicians, in markets
00:02:30.01 globally, and as it moves through a lot of these answers
00:02:32.27 can be determined.
00:02:35.10 Okay, so let's talk a little bit more about
00:02:37.24 research collaborations. Some benefits are
00:02:40.18 you can do some technology feasibility,
00:02:43.25 in order to build trust and knowledge.
00:02:46.15 Not only of your science and platform, but with
00:02:48.14 your partner, about their interest, their expertise,
00:02:52.17 and where your technology can best be used.
00:02:55.22 Funding, really the range depends
00:02:58.11 -- it can be all over the map from
00:03:00.04 very low to very high, depending on
00:03:01.26 the excitement in the field, the economic
00:03:04.09 promise, and the development stage compounds.
00:03:06.24 Structures, ideally there are several structures
00:03:11.09 in this and it really depends on the area
00:03:12.29 of research you're talking about. But one hallmark
00:03:15.22 I think of success is to clarify what
00:03:17.19 the success criteria are going to be in any research
00:03:19.21 collaboration. Risks, tend to be the lowest risk structure.
00:03:23.13 Which is also why it can be the easiest to complete,
00:03:25.22 and the fastest that could happen.
00:03:27.08 But can also be easy to terminate, which can be
00:03:30.02 good and bad for both sides,
00:03:31.29 you can get rid of research that didn't work and
00:03:35.27 move onto ones that may.
00:03:37.12 And then the key question that I think of
00:03:38.29 when I do research collaborations is
00:03:40.23 who's going to own the data, who's going to have publication
00:03:42.12 rights, who's going to have termination rights,
00:03:44.00 and then option rights in the future.
00:03:45.10 On a license or license option,
00:03:49.29 a couple of benefits can be that you can vary these deal
00:03:53.00 structures in several ways. Globally,
00:03:56.12 territory, field, potential options and issues.
00:03:59.13 Funding here could be from multiple sources.
00:04:01.15 For example, options as the product advances
00:04:04.17 in development. There are a lot of ways you could do
00:04:06.17 milestones in this. Structures can be from
00:04:09.12 the very general to the very specific.
00:04:11.11 Territory, indication, by customer, you can split these out
00:04:16.15 in a lot of different ways.
00:04:17.26 The risks in license options
00:04:20.13 can be a myriad. Precedents you can actually raise
00:04:26.00 the value for future, so a positive on this,
00:04:28.27 but it can also limit an upside if you
00:04:30.17 do a cheap deal in the beginning, it can limit
00:04:33.02 what the possible valuation's going to be in the future.
00:04:35.12 So some key questions,
00:04:37.10 what are you exactly giving up
00:04:39.01 when you do a license option?
00:04:40.01 Or as the acquirer, what are you actually gaining
00:04:43.00 in the license option, retaining, and then sharing?
00:04:45.19 in the future.
00:04:46.14 So, let's talk about an example.
00:04:48.16 A few of, I think, hallmarks of pharmaceuticals
00:04:54.10 here -- and I can talk about these because I was in no
00:04:57.19 way involved in them, so there's no risk of any
00:04:59.27 confidential information here. But the Onyx and Bayer deal,
00:05:02.02 they did a fantastic deal a few years ago.
00:05:04.19 Where Onyx licensed to Bayer their fundamental
00:05:09.09 technology to their lead product
00:05:11.06 and it was also seen as a reason why
00:05:14.13 Onyx was not able to sell themselves
00:05:16.01 to any other suitor, despite a lot of pharmaceutical
00:05:18.21 interest for many years.
00:05:20.11 There was later a lawsuit and the agreement was
00:05:24.13 restructured, which we'll talk about later.
00:05:26.11 But essentially, this was a fantastic deal
00:05:29.06 for Bayer, a fantastic deal for Onyx
00:05:30.25 in many ways, that did evolve over time.
00:05:33.29 There was also a really interesting Pharmacyclics,
00:05:36.19 Janssen, Abbvie licensing deal.
00:05:37.28 When J&J essentially purchased about a
00:05:41.23 50/50 profit split with Pharmacyclics in December 2011
00:05:44.21 for their lead compound, it was about $1billion
00:05:47.00 for the deal. Fast forward just a couple
00:05:49.19 of years later in 2015, Abbvie steps in and purchases
00:05:52.04 the rest of the company for just about $21billion.
00:05:55.14 So, where literally licenses can limit,
00:05:59.14 they can also release quite a lot of
00:06:01.07 value, which moved the product forward.
00:06:04.20 So let's talk about a development agreement.
00:06:08.02 Benefits of a development agreement can
00:06:10.02 be leveraging resources from a larger companies,
00:06:12.17 financial is one of them, but I'd really talk to
00:06:16.27 small companies to think about what the advantages
00:06:19.12 are of working with big companies in terms
00:06:20.19 of how the regulatory, the research, the preclinical,
00:06:23.23 the animal models, and really the extent
00:06:25.29 of the experience that larger companies have
00:06:29.23 just by virtue of their being large with a lot of expertise.
00:06:32.24 Funding, options to split in cases of territory
00:06:35.24 exclusive licenses, what this essentially means is
00:06:38.05 there are multiple ways to do these deals,
00:06:39.22 and multiple ways to split them
00:06:41.08 to unlock the best value and the best partner.
00:06:44.09 We'll talk about this in just a second.
00:06:45.10 The structure here, again, highly variable.
00:06:48.14 And it depends on the asset, the partners,
00:06:51.15 and the goals. I would make sure that you're listening
00:06:55.02 to exactly what product, focusing on what product
00:06:57.20 and where it's going and what makes the
00:06:59.25 most sense for that specific one.
00:07:01.08 Couple of risks, as always, ensure that you have the right partner.
00:07:05.07 Is this person really, or is this company really
00:07:08.14 expert and have a lot of resources
00:07:11.02 in the indication that you're looking for
00:07:12.03 in the developmental area you're looking for.
00:07:14.21 Is the deal structure representing the strengths of both parties?
00:07:17.27 And then finally, is it an organization and have you
00:07:21.20 organized this for future success?
00:07:23.15 So some key questions.
00:07:25.14 If you're talking about clinical trials,
00:07:27.11 could this speed the clinical trials in your
00:07:30.21 clinical development timeline, could it speed
00:07:32.16 the research? Legal review times,
00:07:35.04 is this going to slow things down
00:07:36.13 with different legal reviews at different stop
00:07:39.22 and no go decisions?
00:07:41.06 Approvals, and then we have go/no go decisions in the end.
00:07:45.03 So, let's talk about an example
00:07:46.23 to put some color on this.
00:07:47.24 BMS did a very interesting deal with CytomX, and again
00:07:51.08 I wasn't involved in this one, those I have some
00:07:53.19 friends who were and it was really interesting,
00:07:55.20 and I think exemplary example of a great deal.
00:08:00.09 You see the headlines here, which you can of course
00:08:02.27 Google and get a lot more details because so much
00:08:04.29 of this was public. But essentially, it was a worldwide
00:08:07.02 research collaboration and license agreement,
00:08:09.02 as we get to some of the combinations, to discover
00:08:11.11 and develop and commercialize novel therapies
00:08:13.04 against multiple immuno-oncology targets using
00:08:15.25 CytomX's great platform, which they've shown good
00:08:19.00 progress here.
00:08:20.26 The economics were quite attractive,
00:08:22.29 $50million upfront, $300million in milestones
00:08:25.15 plus sales royalties. But essentially
00:08:26.29 what you see is a really clever
00:08:28.26 way to leverage CytomX's platform,
00:08:31.16 Bristol Myers's experience in both clinical
00:08:35.15 development and commercial, to maximize
00:08:38.14 the science of that platform.
00:08:40.03 So, advancing to commercial agreements.
00:08:42.23 What we want to do in commercial agreements
00:08:45.18 for the most part is to maximize the assets
00:08:48.24 of each party. It sounds trivial,
00:08:50.13 but it can be so powerful when done
00:08:52.24 well. And we've got an example coming up next.
00:08:55.17 The funding of these really depends on the
00:08:57.26 opportunity, the indication, the product, but
00:08:59.22 usually includes things like royalties, profit
00:09:02.04 splits, manufacturing costs, and marketing agreements.
00:09:05.23 So the structure, and again, focus on unlocking the value
00:09:09.05 in creating the best commercial value for both
00:09:12.09 parties. And therefore, the biggest value.
00:09:16.02 The biggest pie is always the metaphor in negotiations.
00:09:21.12 Territories, indications, and customer channels.
00:09:24.15 The risks, of course, in these are
00:09:27.19 capping commercial upside potentially if you
00:09:30.27 are essentially valuing what the world
00:09:34.14 and the global markets are going to be. So
00:09:36.01 it's potential will cap it. And then working with different
00:09:38.06 partners. You're picking a dance partner,
00:09:40.15 and in specific territories you can go back
00:09:43.09 necessarily and do this.
00:09:45.07 So some key questions that you need to
00:09:48.04 ask yourself in these kinds of commercial agreements.
00:09:50.03 Both on the buy side and the sell side.
00:09:51.24 Is this the best partner? Is this the best structure?
00:09:54.17 So, an example.
00:09:57.06 Illumina did a very interesting deal with 10X Genomics.
00:10:00.06 It's a co-marketing deal, also known as a
00:10:04.27 commercialization deal, there are a lot of
00:10:06.04 different names for these. But essentially,
00:10:07.08 what they did was they announced one with a partnership
00:10:10.02 for long read applications, so it's a technology
00:10:12.14 play to partner what 10X Genomics, the platform
00:10:15.27 here, and essentially Illumina's dominant commercial
00:10:19.22 pipeline and presence.
00:10:24.00 So what it was, was essentially, providing
00:10:26.03 customers with additional options for applications,
00:10:28.20 so it's a great way for 10X Genomics reaching
00:10:30.24 much broader set of customers,
00:10:32.11 a great way for Illumina to increase its menu in that point.
00:10:34.24 So then at the end, and a lot of these type of deals
00:10:39.28 are, if it's not just a straight acquisition,
00:10:41.22 and acquisition options are built onto
00:10:43.19 all of the other, or can be built onto all of the other structures
00:10:46.28 we talked about so far.
00:10:48.08 So, some benefits, it can be challenging
00:10:50.28 for the licensor. So the question everybody
00:10:54.20 always asks themselves around the table is
00:10:56.02 Are we selling the company here?
00:10:57.12 And for how much, and is this the right number
00:10:59.21 which it will be in the future?
00:11:01.07 There are a lot of questions between here when
00:11:03.07 the option is triggered.
00:11:05.09 Funding can be cash, can be stock,
00:11:07.25 can be combinations, can be royalties,
00:11:09.12 can be milestones, all these can be very useful
00:11:11.07 tools in order to manage that type of
00:11:12.27 risk. And the structure, I think depends on the
00:11:15.20 stage. Are we talking about a development asset,
00:11:17.10 are we talking about a commercial asset?
00:11:19.00 Do we know all the indications of the assets
00:11:20.28 going into? All of the customers that it can be
00:11:23.00 serving? All of these should be managed
00:11:26.01 by different structures you set up
00:11:27.11 in the deal you're talking about with your partner.
00:11:29.11 So then the risks.
00:11:31.14 Balancing the risk and reward with risk mitigations,
00:11:33.20 easy to say, quite hard to do and quite hard to do
00:11:37.14 for both sides. So everybody has risks
00:11:39.08 and identified their favorite, or most important
00:11:42.25 list of risks. And the question is, how do you work
00:11:45.17 with your partner to manage those on both sides.
00:11:48.06 So calculations can sometimes benefit the
00:11:51.13 acquirer, and there are some examples of that
00:11:55.15 in the media, you can just take a look on Google
00:11:57.19 for those. But some key questions both
00:12:00.12 sides, are we locking up the target?
00:12:02.11 Are we locking up a company?
00:12:03.25 Are we locking up the asset that we're really
00:12:04.26 interested in? And then can you
00:12:08.10 limit an opportunity? So from these small companies,
00:12:10.20 the seller's point of view,
00:12:12.05 if you do these kinds of acquisition options,
00:12:14.19 it can often limit your opportunity to raise
00:12:17.10 capital later. So, in all of these deals
00:12:21.02 you want to think about what happens if things
00:12:23.06 don't go according to plan.. which
00:12:24.28 few things do in biotech and pharmaceuticals.
00:12:27.25 So when it doesn't go according to plan,
00:12:29.16 what happens? And if you're locked up
00:12:31.02 with some of the acquisition options, with
00:12:33.09 specific licenses to another company,
00:12:35.19 it can be really hard to bring in
00:12:37.15 an additional set of investors in order to get
00:12:39.21 from one situation to another.
00:12:42.15 So just something to think about.
00:12:43.26 And here's an example.
00:12:46.24 Myriad did a very interesting deal with Crescendo
00:12:49.11 several years ago. So Myriad Genetics, of course
00:12:52.13 known for their BRCA tests and their
00:12:55.15 suite of genetic tests for oncology,
00:12:58.14 acquired, or essentially acquired and did an options
00:13:01.16 deal with Crescendo, which is in the immunology
00:13:03.19 space. Similar types of diagnostics, different indications.
00:13:06.28 So, what they did was a 3 year options
00:13:10.18 with an equation using a multiple of revenue
00:13:14.06 and growth rate. And they had a one-time right
00:13:17.21 to acquire Crescendo at a later date
00:13:20.02 for a fixed purchase price.
00:13:21.00 And so what this ended up doing was
00:13:22.29 it put incentives for Crescendo, and Myriad
00:13:25.24 for that matter, for sales, for revenue, for profit,
00:13:29.13 in order to achieve the milestones that were necessary
00:13:32.03 for this. Crescendo got some cash, which was critical
00:13:35.00 at the moment, and the deal ended up closing
00:13:37.26 after 3 years and Crescendo's now part of Myriad,
00:13:40.08 and they are doing quite well.
00:13:42.03 So let's talk a little bit more about deal process.
00:13:46.15 And how to get these types of deals done.
00:13:48.25 So, some topics we can talk about
00:13:50.19 but we don't have time today
00:13:52.00 to address them fully.
00:13:53.19 Non-binding term sheets, can be
00:13:56.11 very useful to clarify things on both sides.
00:13:58.07 There are questions from everyone about
00:14:00.25 when do you sign a term sheet, is it necessary
00:14:02.20 if they're non-binding anyway, usually always comes up
00:14:06.11 at some point, depending on the partners
00:14:09.10 Managing diligence and liabilities,
00:14:11.27 there's no real perfect way to do this.
00:14:15.21 The best is make sure you do it exhaustively
00:14:19.23 on both sides. It doesn't mean take years to
00:14:22.28 do it, but what it does mean is be very careful.
00:14:25.03 When things go wrong, we can talk about indemnities.
00:14:28.15 Strategic alliances, deals or "coopetition."
00:14:31.16 It's a term that was coined in several years ago
00:14:35.02 from companies doing deals with companies
00:14:37.00 where we're trying to collaborate on one side
00:14:38.25 and cooperate on one side, yet we're
00:14:40.24 competing in a very similar area in another.
00:14:45.15 It happens all the time, you just need to be very careful.
00:14:47.29 Which comes to competitive protections.
00:14:50.12 How do you know when a deal is real?
00:14:52.07 And when another company is just snooping around
00:14:54.28 for interest or a stalking horse?
00:14:57.10 There are some hallmarks of this,
00:15:00.04 a lot of this is experience, some of this is just getting
00:15:03.00 a great lawyer or deal negotiator on your side.
00:15:05.24 Or just knowing the people on the other side,
00:15:08.21 which we'll get to in just a minute.
00:15:10.04 So, we talked a bit about the legal experience,
00:15:13.13 the more experience you have in the area,
00:15:16.07 I tend to find the better, and it doesn't have to be
00:15:19.05 the negotiator. This is a team sport
00:15:22.08 in many ways. Team sport from the research to development
00:15:25.14 to the clinical, the legal, the BD,
00:15:27.06 management, board, there's several
00:15:29.14 ways to do this, but again.
00:15:31.08 It really is a team effort to getting any of these done.
00:15:35.04 And getting the best deal.
00:15:37.16 So now let's turn to moving on in the process.
00:15:42.01 Executing the deal and measuring and maximizing
00:15:44.03 success. In executing the deal
00:15:46.29 there are several ways to maximize
00:15:49.08 your ability to do this. Working with stakeholders,m
00:15:51.15 finalizing a deal, measuring success,
00:15:53.07 maximizing success. What we're going to do
00:15:55.06 now is talk about the process of doing all of these.
00:15:57.29 So there's no perfect way to represent
00:16:00.21 this whole process, they're all slightly different,
00:16:03.03 but we came up with some sort of schema to give you
00:16:04.27 ideas about some of the generalizable
00:16:07.10 pieces that are required and can lead to
00:16:11.14 success in a collaboration.
00:16:13.13 First is internal alignment,
00:16:15.05 making sure that everyone working with your
00:16:16.28 group, with your company, is aligned on goals,
00:16:19.22 steps, processes, and prioritizations.
00:16:22.04 As much as possible in the early days
00:16:24.18 and doing so with white paper.
00:16:27.00 Second is the partner integration, finding the right
00:16:29.09 partner. And so how your goals can fit
00:16:31.08 with theirs, it sounds pretty easy but when it's actually
00:16:33.10 done in practice, it can be pretty complicated.
00:16:35.17 And then once you start discussing,
00:16:37.23 finding the right scope and structure
00:16:40.00 to represent both parties' interests and then
00:16:42.00 the maximal ability for the platform, the technology,
00:16:46.23 and the products you're developing to make
00:16:48.12 an impact in the healthcare environment.
00:16:51.14 Once you get all this right,
00:16:53.28 then you can ride on to legal and contracting
00:16:55.29 to make sure that you can put this all into a legally
00:16:58.26 binding and tolerable format for everyone.
00:17:01.10 Now, we have a little 3-30x above
00:17:04.23 this, often you can get lucky and
00:17:07.12 it works perfectly the first time.
00:17:09.07 I call that "enjoy that when it happens."
00:17:12.21 But sometimes this can be highly iterative,
00:17:14.15 and you have to go back and do this over
00:17:15.28 and over again to make sure you have internal alignment,
00:17:18.07 partner integration, and refine a scope and structure,
00:17:21.07 before you move on to integrating all of the
00:17:24.26 priorities with all of the different groups
00:17:26.12 within your company and the partner company,
00:17:28.14 which is why we have a magnification of
00:17:30.16 the puzzle pieces we have over here.
00:17:32.18 Once this all happens, you can move off to
00:17:34.29 finance sign-offs, corporate approvals,
00:17:36.22 and then the dressing of the signatures,
00:17:40.07 the press releases, and the financial finalizations.
00:17:42.15 All of these pieces are highly critical.
00:17:44.20 But setting the stage and the initial eight times
00:17:48.00 with the top row, I think is fundamental too.
00:17:51.07 So how can you maximize success
00:17:55.27 once a deal is done? I would start with communication.
00:18:00.14 I think this is a huge piece that can be
00:18:02.18 transformative, and the difference between success
00:18:05.10 and failure in so many ways.
00:18:07.06 Feedback loops can create transparency
00:18:10.01 and accountability. So we have some ways to do
00:18:12.05 this, just some things to think about.
00:18:13.16 Weekly meetings, monthly meetings,
00:18:15.07 quarterly, and it depends on who's involved.
00:18:18.13 So weekly calls with team leads, monthly calls
00:18:21.10 with larger project management groups,
00:18:23.26 quarterly financial reviews can be helpful,
00:18:26.11 and then annually on deal evaluation
00:18:28.06 and project updates. And they can be useful
00:18:30.04 in a couple of areas. First, just for the points
00:18:33.10 of contacts to be organized in finance, and
00:18:36.06 R&D, and commercial. And also provide
00:18:39.06 clear mechanisms for dispute resolutions, should these
00:18:42.25 come up, hopefully they won't.
00:18:44.04 But they certainly can.
00:18:46.03 So some key understandings.
00:18:48.03 Though it may take years to sign a deal,
00:18:50.14 it really is just the start of a relationship and
00:18:53.12 building value. So, as a little statistic
00:18:57.02 to define that, 30% of deals tend to get clarified,
00:19:00.09 renegotiated, and "revised." The major consulting
00:19:05.16 companies just came up with this percentage.
00:19:07.12 But let's talk about an example of one of those.
00:19:10.27 Regeneron and Sanofi is one of my favorites,
00:19:13.04 again, one that I wasn't involved with, but one that I'm a big
00:19:16.02 fan of how they've evolved this over time.
00:19:18.13 Way back in 2003, the two companies got together
00:19:22.12 and signed their first development agreement.
00:19:26.02 Aventis, which became Sanofi during this time,
00:19:29.16 took a 4% equity stake in Regeneron.
00:19:31.27 In 2007, they updated and revised the contract.
00:19:35.25 Sanofi collaborated on a new drug discovery
00:19:38.10 platform and paid up to $800million,
00:19:40.03 increasing their ownership share.
00:19:42.02 2009, Sanofi increase R&D. 2013, Regeron pays
00:19:46.10 Sanofi back, plus milestones, to get some assets back.
00:19:50.00 Then 2015, the new immunotherapy collaboration
00:19:52.27 where they actually alternate leads
00:19:56.03 in development. One thing we can overlay on this
00:19:58.28 is the stock processes of Regeneron, we can talk about where
00:20:01.16 Aventis, which started and was acquired by Sanofi,
00:20:06.04 at a premium. Some really great things happened
00:20:09.10 to both companies in their market caps and valuations,
00:20:12.09 financings, size. Just a success story on both sides.
00:20:17.27 On the corollary, there are some disastrous
00:20:22.13 examples, of course, in any situation, in any
00:20:26.00 corporate environment. Here are some things that
00:20:29.10 tend to not go so well.
00:20:32.18 Neglecting your company's interests,
00:20:34.24 trying to get a deal done that your company and your stakeholders
00:20:37.04 don't represent or want.
00:20:38.26 Don't listen to the other sides' needs,
00:20:41.02 I've seen this happen before.
00:20:42.24 Negotiators being inflexible and saying
00:20:45.08 these are the only terms that are possible,
00:20:46.26 take it or leave it.
00:20:48.15 Anticipating issues, don't listen to the science,
00:20:51.20 do a deal that doesn't apply to the scientific or
00:20:55.16 the assets that you're talking about.
00:20:57.00 These may seem obvious, but
00:20:59.03 once negotiators or BD people, people who
00:21:03.07 -- doesn't have to be a BD person, someone who
00:21:05.27 negotiates can sometimes lose sight
00:21:07.25 of the bigger picture and just try to get a deal
00:21:10.07 done. I recommend trying to avoid all of these.
00:21:13.15 But let's focus on the positives.
00:21:16.08 Because it's a lot easier to go that way.
00:21:17.25 Hallmarks of outstanding business development,
00:21:20.05 some of these are just corollaries.
00:21:22.14 Relationship building, make sure you build trust on both
00:21:24.28 sides, that there's active communication
00:21:26.29 and you can solve problems, and solve for the
00:21:29.06 bigger issue. And part of that is being able to
00:21:32.27 listen to what's shared and then what isn't
00:21:35.17 shared. What the other side can't share.
00:21:38.09 But that sometimes you can read into
00:21:41.07 what their sensitivities are, in order to get the best
00:21:42.27 deal done. Finding creative solutions.
00:21:45.14 Essentially, that's taking the first two
00:21:47.07 and putting into practice. Knowing your partner's
00:21:49.25 constraints and their challenges, and then knowing
00:21:52.24 the relationship can be only the beginning
00:21:55.01 and not the end. Obviously if you're selling your company,
00:21:56.11 it tends to be a one-time exchange, however,
00:22:00.21 as we looked at with Sanofi and Regeneron,
00:22:03.08 it really can be just the start of an evolution.
00:22:05.06 So, in the BD timeline,
00:22:08.08 it can reflect both long-term and short-term
00:22:10.27 goals. From the search and evaluation,
00:22:13.23 the diligence, the negotiations and contracts.
00:22:16.13 Now let's talk about some advanced topics
00:22:18.02 on each. So there's a lot more information
00:22:21.02 hopefully for future videos for you.
00:22:24.00 But things to Google and to look at,
00:22:27.03 in addition, in the scientific analysis,
00:22:30.25 really thinking through carefully the discovery, development,
00:22:33.16 lead optimization, CMC, ADME, a lot of the pieces
00:22:37.28 between the scientific and the therapeutic,
00:22:40.15 the integration of care is being more and more
00:22:42.23 important these days with the complexity.
00:22:44.21 And again, don't just look in the United States,
00:22:47.00 look in different countries and how they're
00:22:49.14 healthcare systems, approval systems, can be
00:22:52.29 different in different educations.
00:22:54.15 And again, not just pharma, we're talking about other
00:22:57.22 technologies as well. And then the commercial,
00:22:59.28 clinical use, an absolutely critical piece that so many
00:23:04.02 early stage companies don't think about. How this
00:23:06.15 will actually be used in the clinic when physicians are
00:23:08.18 prescribing it, using it, using it in a surgical suite,
00:23:10.19 how is it actually done, used, combined?
00:23:14.10 TPPs, TAMs, target product profile,
00:23:18.00 total available markets, potential available markets,
00:23:20.09 regional uses, all very useful and important things
00:23:23.02 to work on in the negotiation. And
00:23:27.06 on a personal level, there are rooms of books
00:23:31.07 written on these types of things that you can
00:23:32.25 go to your local library. But really, I think it comes down
00:23:35.06 to several fundamental things.
00:23:37.07 Curiosity, patience with the science, with people,
00:23:41.10 with the sides, with people who are not like you and
00:23:44.17 different groups. Again, a team sport. Clear
00:23:47.09 written and verbal communication
00:23:48.12 can never be important enough.
00:23:50.20 And then the ability to work with other people,
00:23:52.18 this is.. it really is all about the people.
00:23:55.00 Never seen a deal get done between companies,
00:23:57.09 it's always done between people.
00:23:59.15 Here are some parallels to academia
00:24:02.18 and some questions to consider as you
00:24:04.06 do in a lab, developing your technology
00:24:06.05 and your platform, and how to move forward in the partnership.
00:24:09.02 What vehicles could you use, how could you establish
00:24:12.15 collaborations, how do you structure them? Hopefully,
00:24:14.19 we've given you some information and some ways
00:24:17.19 to think about this. For further information,
00:24:18.29 I urge you to take a look at Anatol's video,
00:24:20.25 who's got some great insights into how to
00:24:23.07 apply a lot of these for an academic
00:24:25.05 audience, purpose, and technology.
00:24:27.02 So hopefully by now, we've achieved several
00:24:31.16 or hopefully all five, of the BD objectives here.
00:24:34.02 We hope that by now you can
00:24:36.14 define business development, identify the steps,
00:24:38.17 understand how business development contributes,
00:24:41.02 describe the different vehicles that business development
00:24:44.04 can leverage, and successful deal structures.
00:24:46.01 So just to wrap up, here are a few additional
00:24:49.04 resources on business development to give you
00:24:51.11 more information on what we touched on today.
00:24:53.14 Entrepreneurship Centers, Coursera, two
00:24:55.27 of my favorites, Harvard Business Review has some
00:24:57.13 great in-depth articles going back
00:24:59.05 decades now, FierceBiotech is one of several
00:25:02.14 weekly, monthly newsletters can give you great
00:25:05.10 insights into the types of deals that are
00:25:07.10 working well, ones that are working well over time,
00:25:10.02 and then where trends are moving in the industries.
00:25:13.01 Thank you very much for watching.

Part 3: Parallels to Academia

00:00:12.00 Hi, I'm Anatol Kreitzer.
00:00:14.16 I'm an investigator at the Gladstone Institutes
00:00:17.16 and I'm here to talk about how
00:00:18.29 concepts from business development
00:00:21.00 can be applied to your academic laboratory.
00:00:23.10 So you've learned about the definition
00:00:25.29 of business development, and how businesses
00:00:28.03 use business development
00:00:30.06 to fill its pipeline, to bring the next products
00:00:32.25 to market to serve their stakeholders.
00:00:34.27 And now we're going to elaborate a little bit more
00:00:36.23 on how laboratories actually use many
00:00:38.07 of these same concepts.
00:00:39.24 So in the first half of the presentation
00:00:42.11 you learned about how companies identify
00:00:44.04 various gaps that can hinder
00:00:46.07 the development of their products.
00:00:47.29 Now, in academia, we can actually
00:00:50.06 use very similar concepts
00:00:52.23 because the development of an academic lab
00:00:55.00 actually has many parallels to the
00:00:56.21 development of a company.
00:00:57.25 So, for example, it's important for
00:01:00.22 an academic lab to continually
00:01:02.09 survey the field and identify
00:01:03.29 gaps that can be met by the laboratory.
00:01:07.10 So for example, one of the major goals
00:01:10.06 of going to scientific meetings
00:01:12.06 is to actually become aware of the very latest
00:01:14.27 research and to think about how one
00:01:17.07 might apply the strengths of one's
00:01:19.13 own laboratory to actually meet
00:01:21.10 some of these needs.
00:01:23.02 Similarly, it's very important
00:01:24.08 to review manuscripts for journals
00:01:26.26 because you then become aware of
00:01:28.28 a sort of very recent up and coming
00:01:30.22 topics that can also help guide
00:01:34.01 the laboratory. And similarly,
00:01:36.28 serving on grant review panels
00:01:38.12 can serve much of the same goal.
00:01:40.01 So, it's very important as a primary
00:01:41.27 investigator, to actually keep a breadth
00:01:44.02 in the field and consider strategically
00:01:45.27 the next five years what sorts of areas
00:01:48.01 should the lab think about moving into.
00:01:49.25 Now, within the lab, there may also be
00:01:52.05 gaps, particularly in the beginning
00:01:54.26 of a laboratory, you may not have all
00:01:56.25 of the requisite techniques
00:01:58.01 available to address the questions you're
00:02:01.00 interested in. So you need to think very carefully
00:02:03.22 about how you can bring these techniques
00:02:05.13 to bear, and of course there are
00:02:07.03 various ways to do this.
00:02:08.07 You can either finance the acquisition
00:02:11.20 of various tools and methods,
00:02:15.06 or you could actually partner,
00:02:17.02 and we'll talk about that a little bit later.
00:02:19.07 And of course, financial gaps, now
00:02:21.15 I think that most laboratories are familiar
00:02:24.11 with the concept of financial gaps.
00:02:26.07 But of course, it's very important to
00:02:28.10 continually be surveying RFAs
00:02:31.12 from granting agencies. It's also important
00:02:34.21 to establish connections to disease foundations
00:02:37.25 and also, sort of consider other sources of funding
00:02:41.01 that may be available.
00:02:42.07 Now in the second half of the presentation
00:02:47.03 you learned about how companies actually
00:02:49.26 determine which vehicles can best fill a
00:02:52.04 particular gap, how they execute
00:02:54.07 that particular deal and then measure
00:02:55.21 the success.
00:02:56.25 So, when considering parallels to academia,
00:03:00.10 it's important to think about what
00:03:02.23 sort of vehicles a laboratory can actually
00:03:04.22 bring to bear to meet its goals.
00:03:06.14 And I think that one of the most important
00:03:08.17 vehicles is the collaboration, or essentially partnering.
00:03:12.08 So this is in concept quite similar
00:03:16.10 to the type of partnering that companies do.
00:03:18.01 It's based on when a laboratory has a
00:03:21.12 particular need that they cannot address internally,
00:03:24.29 either due to cost or lack of expertise.
00:03:28.08 And so, it becomes very important
00:03:30.06 to actually consider which other laboratories will
00:03:33.01 one might consider partnering with
00:03:34.19 to achieve goals.
00:03:36.05 Now, establishing collaborations is a
00:03:38.19 tricky business, one must again,
00:03:41.26 go out, give seminars, go to meetings,
00:03:44.18 and meet with people. And really discuss
00:03:47.16 various ideas and pitch your project
00:03:50.14 to people, because in the end you're going to have
00:03:52.24 to ultimately convince someone else,
00:03:55.01 another laboratory, to actually take time
00:03:57.06 and effort and money to actually partner with
00:04:00.12 you to achieve goals.
00:04:01.28 And so of course, an ideal collaboration
00:04:04.22 actually involves benefits for both parties.
00:04:07.06 So, how do you negotiate such a collaboration?
00:04:09.26 Well, in principle, in academia these negotiations
00:04:13.13 typically tend to be fairly casual.
00:04:15.22 On the other hand, this can often lead to problems.
00:04:20.20 So, whereas in industry, these deals
00:04:23.13 are actually explicitly written out
00:04:25.06 in the form of contracts, typically
00:04:27.05 academic deals are essentially oral agreements.
00:04:30.08 Now, this can lead to deals gone bad.
00:04:33.10 I can give you one example from my own experience.
00:04:35.04 I established a collaboration
00:04:37.26 with a postdoc in another lab,
00:04:40.00 and this collaboration was going to be of limited scope
00:04:42.21 initially. And I actually put this postdoc in touch
00:04:46.24 with somebody in my lab and I let them go.
00:04:49.16 And a month went by, another month went by,
00:04:52.11 and actually, ultimately, about a year went by,
00:04:55.06 and this project was still ongoing.
00:04:57.26 And this particular postdoc had been transitioned
00:05:01.08 to actually become a principal investigator
00:05:03.25 themselves, and was continuing to use the postdoc
00:05:06.22 in my laboratory to conduct experiments.
00:05:08.12 And at some point, I recognized
00:05:10.20 that this deal needed to be renegotiated
00:05:12.19 and so at that point, I actually stepped
00:05:14.28 in and said we need to step back,
00:05:17.02 the situation has changed significantly from the
00:05:20.15 conception of this collaboration
00:05:23.01 and things need to change.
00:05:23.29 So it's really important, I think,
00:05:25.10 to continually reassess these type of collaborations,
00:05:29.04 particularly in the absence of explicit milestones
00:05:31.28 and contracts.
00:05:33.12 So, on the other hand, I think
00:05:36.04 good deals can actually be a huge benefit
00:05:40.09 to the lab, so if you can find
00:05:42.06 a laboratory with complementary
00:05:44.15 expertise that share similar interests
00:05:47.19 and ideally, a collaboration can actually
00:05:50.05 lead to papers from both laboratories.
00:05:52.08 So that, essentially, both laboratories can
00:05:54.26 get senior author papers out of the deal.
00:05:57.06 This is really the ideal collaboration.
00:05:58.25 It's sort of everybody's a winner and
00:06:00.16 there's not this sort of one-sided
00:06:02.00 deal where one lab wins and the other lab
00:06:04.00 loses. So I think this is really the best
00:06:06.10 way to structure such academic collaborations.
00:06:09.12 So with that, I want to thank you for watching.

Videos in this Talk

Part 1: Identifying the Gap
Audience:
- Researcher
- Educators of Adv. Undergrad / Grad
Part 2: Filling the Gap and Executing the Deal
Audience:
- Researcher
- Educators of Adv. Undergrad / Grad
Part 3: Parallels to Academia
Audience:
- Researcher
- Educators of Adv. Undergrad / Grad

Speakers: Anatol Kreitzer, Daniel Dornbusch, Asha S. Collins

Total Duration: 0:46:33

Recorded: December 2016

All Talks in Professional Development

Talk Overview

This video series is designed to teach bench researchers how scientists in scientific enterprises structure business deals to achieve strategic goals. Content covers an overview of the business development process and includes identifying gaps, deal types and structure, and defining success. Concepts will be reinforced using practical examples from academic and industry settings.

These videos are part of the Business Concepts for Biomedical Scientists course.

Speaker Bio

Anatol Kreitzer

Senior Investigator (Gladstone) and Associate Professor of Physiology and Neurology (UCSF) Continue Reading

Daniel Dornbusch

Daniel Dornbusch has served in multiple management roles at pharmaceutical, biotechnology, diagnostics, and strategy consulting companies including Novartis, Genentech, Amerisource Bergen and Genzyme. Daniel has spent almost 20 years in the healthcare industry in various roles including business development, sales, marketing, corporate development, and commercial management. Daniel is a founder of KidsDOC, a telemedicine company,… Continue Reading