Strategic BD Collaboration Between Biotech and Pharma: Key Tips for Successful Partnerships

In the current financing environment, the importance of business development (BD), particularly license-out transactions, is highly valued by many biotech founders and executives, with related tasks being elevated in priority.

Many executives may be drawn to partnerships as a means of addressing their company’s cash flow and survival challenges. In reality, collaborating with large pharmaceutical companies or other biotech firms can bring numerous benefits to small biotechs. Beyond improving cash flow, the right partnership can also increase the likelihood of development success and shorten the required timeline.

Edwin Moses, former CEO of Ablynx, said: “I believe partnerships bring many benefits. Cash is very important, and so are validation and learning from large pharmaceutical companies—they have much to teach biotech firms.”

However, forging partnerships between biotech firms and large pharmaceutical companies is not an overnight achievement. While the strength of a company’s technology platform and the quality of its product data are undoubtedly key to securing such deals, it is crucial not to overlook the human element: collaborations are negotiated and sustained by people. When both parties must share benefits and risks, building trust between individuals becomes particularly vital.

This article compiles crucial and valuable insights offered by seasoned industry experts, curated by VBInsight. On August 10, VBInsight, in collaboration with Bohe Innovation Center and Yafa Capital, will host an offline salon to analyze and interpret, from multiple perspectives, how business development (BD) partnerships can “stay one step ahead,” unveiling the proactive BD strategies for biotech companies.

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Julia Schoelermann, Vice President of Business Development at 35Pharma, suggested:“Rather than merely seeking those who can help you, consider the perspective of mutual benefit.”

Therefore, to identify a mutually beneficial partner, biotechnology companies must first assess the development stage of their technology and determine whether it can contribute to new drug development at large pharmaceutical companies.

Georges Rawadi, former CEO of YSOPIA Bioscience, explained, “If you are in the preclinical stage, you may still change the technology, indication, or manufacturing process, and even the drug delivery method may not yet be determined.” However, once a drug enters clinical development, its characteristics have been more extensively studied, and the objectives for collaboration become clearer. This enables partner companies to focus on funding clinical trials, seeking regulatory approval, and commercializing the drug.

Therefore, it is crucial to first assess the objectives you aim to achieve and the benefits you can bring to your partners.

Once you have identified a pharmaceutical company interested in collaborating with you, the next step is to discuss the collaboration agreement. They may raise various questions, so it is advisable to anticipate these inquiries as comprehensively as possible and prepare accordingly. Take this opportunity also to reflect on your company’s development direction and strategic planning.

These questions may be very similar to those asked by venture capital firms during investment due diligence. They typically include the following:

lProduct/How does the project work?

lDoes it meet unmet needs?

lAre any competitors developing similar products? If so, how does it compare to them?

lWhat evidence supports your product?/Does the technology have potential?

lProduct/At what stage of development is the technology, and how is the data integrity?

lAre there signs of preclinical efficacy?

lWhat is the next milestone?

lWhat is known about its pharmacodynamics, pharmacokinetics, toxicity and safety, stability, and manufacturing process?

Be prepared to answer these questions honestly and comprehensively, neither underestimating nor exaggerating your capabilities, which will place you in a more advantageous position for collaboration.。

VBInsight has communicated with numerous industry professionals involved in business development (BD) collaborations with large multinational pharmaceutical companies, all of whom have repeatedly emphasized the importance of transparency.

In November 2022, Insilico Medicine announced a multi-year, multi-target drug discovery collaboration with Sanofi. In an exclusive interview with VCBeat News, Dr. Ren Feng of Insilico Medicine stated, “What impressed us was that Sanofi also focused on asking about the aspects we could not address. We initially considered these to be highly challenging or potentially detrimental questions, but we ultimately realized that openly acknowledging our limitations better demonstrates our focus and expertise.”

Of course, when building partnerships, you don’t always have to say “yes.”

For a biotechnology company, the timing of establishing partnerships is crucial. At times, delaying decisions may yield greater long-term benefits.

For example, in January 2018, Ablynx rejected Novo Nordisk’s initial offer to acquire the company for €2.7 billion. By initially saying “no,” Ablynx increased the value of its shares, and later that month, it was acquired by Sanofi for $3.9 billion.

Ablynx’s former CEO, Edwin Moses, recalled, “Novo Nordisk was particularly interested in our lead compound. They had some interest in the platform itself but were not entirely certain about what to do with our other projects.”

“What I find exciting about Sanofi is that they have carefully studied this platform and are very interested in many of the things we are doing. We have already been working together, thereby building trust with our partner, which is a significant achievement.”

A genuine interest in the company’s technology will be instrumental in building a relationship of mutual trust, ultimately driving the collaboration toward success.

Scientists are trained to seek robust data to support innovative ideas. However, when engaging in business development (BD) collaborations, it is also essential to focus on building trust with potential partners.

Schoelermann stated:“Science is entirely about data and facts, while business is more about people; in this context, good data is the ante on the table.”

Schoelermann explained in detail: “Before meeting with potential partners, I try to focus not just on my presentation, but on how to connect with the representatives of the partner organizations on a personal level. I consciously aim to engage them in more interesting and meaningful conversations.”"Ultimately, people will not remember every detail, but they will remember how you made them feel."”

Additionally, do not forget to thank those who helpedExcessYour people,Schoelermann emphasized, “Do not only engage with people when you want something from them.”

Of course, partnerships are built onBoth partiesShare the same strategic vision for the company’s technology or products, possess the appropriate technical expertise and talent to support development and drive projects forward, and have sufficient funding to finance clinical trials.To identify the most suitable partner, comprehensive background checks are required.

Do not waste time negotiating collaborations with companies that have no interest in your company’s products or technologies. Doing so will only result in wasted time or misaligned partnerships. Through appropriate background research,YouPotential partners can be listed who understand the company’s products, know how to assist in their development, and are familiar with business and operational requirements.

It is usually easy to findWhich areas of drug development are Big Pharma companies interested in? You can search online for the name of a Big Pharma company plus the word “partnership,” and you will likely find a webpage dedicated to partnerships or business development.

According to industry observers, many domestic companiesBD failed to execute this aspect thoroughly or in sufficient detail, resulting in a lack of clarity regarding the counterparty’s actual needs.Thus, we spent considerable time negotiating with various companies, engaging in discussions that lasted days, months, or even longer, only to find that they were ultimately not a good fit.“Therefore, it is essential to have a thorough understanding of both your own strengths and those of the other party. By identifying what they need and what you have to offer, mutual exchange can achieve maximum efficiency.”

Attending conferences is arguably one of the best ways to identify potential partners, as they provide biotechnology companies with a platform to showcase their assets and clinical trial data, enabling concise and effective communication of product data, achieved milestones, corporate development progress, and commercialization goals.

Moreover, engaging with people face-to-face and establishing personal connections remains one of the most important ways to build professional relationships or, at the very least, a certain level of credibility. You can leverage speeches to establish direct contact with potential partners in attendance and provide your contact information to any audience members interested in following up.

With this in mind,It is crucial for the company to participate in as many industry events as possible., by delivering presentations at offline conferences or webinars,It is a way to deepen understanding with potential partners, especially for events that large pharmaceutical companies may attend. This allows engagement with those who may be interested in collaborating with smallLarge pharmaceutical companies partnering with biotech firms showcase development projects.

Moreover, in this situation,Often, a large pharmaceutical company will proactively engage with a smallerbiotech companies are being approached, which gives them greater leverage in negotiating deals.

Furthermore, please bear in mind that, despite being associated with the industry’sCollaborations with Big Pharma are highly attractive; nevertheless, it is essential to conduct thorough due diligence on the company to assess its potential for partnership. This approach helps avoid wasting time. The objective of attending conferences may simply be to familiarize partner teams with your product or technology, rather than to finalize any agreements during the meetings. Of course, if a foundation of trust already exists between the two companies, saving the time required to get acquainted and build trust from scratch will facilitate more convenient and efficient initiation of negotiations.

In aAt an industry sharing session on business development (BD) collaborations, industry insiders also shared that it is necessary to proactively seek partners through various channels. First, if a project is strong, supported by robust and reliable data, and demonstrates drug differentiation, it can be actively promoted through reputable channels, such as participating in major U.S. conferences like AACR and ASCO. In addition, multinational corporations generally have their own external collaboration departments in China, which can be contacted proactively. “Therefore, on one hand, companies should take the initiative to present their products at various conferences; on the other hand, once a truly high-quality product emerges, the external collaboration departments of multinational corporations will also proactively engage to gain a deeper understanding.”

Although this is a minor detail, a well-designed and regularly maintained website serves as another excellent way to introduce your company to potential partners. Therefore, the corporate website should provide a comprehensive yet concise explanation of what the company does and how it operates. It must be easy to navigate and include contact information, enabling individuals and partner teams to reach out when needed.

You might even consider investing in search engine optimization (SEO), by creating content (such as relevant articles or web pages) around keywords related to your products and services, you can make your website appear in search engine results. Whenever someone searches for these specific keywords, your company’s website will show up in the search results.

AlthoughSEO is a long-term initiative, but it can drive valuable traffic to a company’s website and make it easier for potential partners to discover and learn about the company.