Pharmaceutical Executive Europe - June 2008 - (Page 10) 10 BioFutures June 2008 Pharmaceutical Executive Europe Friends, Acquaintances and Strangers In a new series of monthly columns, Gerhard Symons looks at recipes for success in pharma/biotech partnerships. ith whom do you prefer to partner for R&D alliances — friends, acquaintances or strangers? Previous working relationships with friends usually result in the development of mutual trust and a higher rate of knowledge transfer. However, as alliance partners learn more about each other’s practices and styles, convergent thinking may develop to stifle innovative approaches. For radical innovations, one may need to move outside the usual circles. Yet, forging alliances with unfamiliar, or unknown, partners may be fraught with constraints: needing to define a narrower scope of R&D activities, overcoming information asymmetry, and preventing knowledge leakage — accidentally or opportunistically taken. Despite measures to govern alliances, such as professional alliance management, not to mention IP law, firms prefer to partner with ‘friends’ in search of radical innovations, according to a recent paper that analysed 1159 R&D alliances in high-tech industries during 1994–2003.1 Anecdotal evidence from the pharmaceutical industry seems to support the authors’ conclusion; take as an example, the R&D alliance between AstraZeneca (AZ; London, UK) and Cambridge Antibody Technologies (CAT; Cambridge, UK). When AZ was looking to move into biologics, it already had research agreements on discovery programmes with CAT and liked the company so much that it had a 19.9% equity stake in the business by the end of 2004. Speaking at ERBI’s 10th Annual Biopartnering Conference in May this year, Peter Chambré, former CEO of CAT, said that CAT’s W strategy was “to find a partner, get a big deal, and get a full share of the value in the company.”2 On June 2006, AZ paid $1.3bn to acquire CAT, which “was the kick-start for AZ’s biopharmaceutical strategy,” commented Chambré, adding that “AZ was impressed with the culture at CAT and wanted to preserve it.” One assumes that the 66% premium paid by AZ represented a ‘full share of value’ to CAT shareholders. In a further boost to AZ’s nascent biologics pipeline, AZ closed the MedImmune (Gaithersburg, Maryland, USA) deal in June 2007 for $15bn, at a 53% premium. Speaking at Imperial College London in May this year, David Brennan, CEO of AZ, said, “MedImmune is an amazing success story by any yardstick — revenues grew from under US$50m in 1996, to nearly US$1.3bn in 2006.”3 Commenting on the future, Brennan added, “by 2010 we expect 25% of our pipeline to be biologics and the critical principle is that partnerships have to be a case of 1+1=3 or more.” References 1. Li, D. et al, 2008, “Friends, acquaintances, or strangers? Partner selection in R&D alliances,” Academy of Management Journal, 51: 315–334. 2. Chambré, P., Round table discussion: “Developments during the last decade,” ERBI 10th Annual Conference, Cambridge, 7 May 2008. 3. Brennan, D., Presentation: “Together we’re stronger — the challenges in the pharmaceutical industry and why building external alliances is key for success,” Tanaka Business School, Imperial College London, 12 May 2008. CHANGE WE CAN BELIEVE IN? “This House believes that less than 10% of pharma industry R&D is innovative.” Not from Hansard, but from the ‘House of Commons’-themed debate planned by EuroBio 2008 (7–9 October, Paris) organiser Robert Heath in a bid to shake up the current conference format which “isn’t bad, but to survive you have to be different.” With a distinguished international steering committee representing the interests of pharma, biotech, science and politics, Heath says the over-riding theme is “what needs to change for change to take place in Europe?” adding that a number of other innovations will make this conference stand out, such as interactive BioDialogues on drug development, among other topics. Anglophones of all nationalities will be pleased to learn that, despite France holding the European Presidency later this year, and the event happening in Paris, the official language of this congress will be English. GS http://aom.metapress.com/app/home/contribution.asp?referrer=parent&backto=issue,7,10;journal,1,8;linkingpublicationresults,1:109448,1 http://aom.metapress.com/app/home/contribution.asp?referrer=parent&backto=issue,7,10;journal,1,8;linkingpublicationresults,1:109448,1 http://mailing.paris-region.com/eurobio2008/questions.html
Table of Contents Feed for the Digital Edition of Pharmaceutical Executive Europe - June 2008 Pharmaceutical Executive Europe - June 2008 Contents From the Editor News and Analysis Calendar Brussels Report - Tell Us Something We Didn’t Know BioFutures - Friends, Acquaintances and Strangers IT Matters - The High Cost of Swimming Upstream Strategy Fundamentals - Hidden in Books Corporate Strategy - New Dimensions for New Business Models Special Report: Making the Leap Sales Force Incentives - The Goal: Setting Goals Last Word Pharmaceutical Executive Europe - June 2008 Pharmaceutical Executive Europe - June 2008 - Pharmaceutical Executive Europe - June 2008 (Page Cover1) Pharmaceutical Executive Europe - June 2008 - Pharmaceutical Executive Europe - June 2008 (Page Cover2) Pharmaceutical Executive Europe - June 2008 - Contents (Page 3) Pharmaceutical Executive Europe - June 2008 - From the Editor (Page 4) Pharmaceutical Executive Europe - June 2008 - From the Editor (Page 5) Pharmaceutical Executive Europe - June 2008 - News and Analysis (Page 6) Pharmaceutical Executive Europe - June 2008 - News and Analysis (Page 7) Pharmaceutical Executive Europe - June 2008 - Calendar (Page 8) Pharmaceutical Executive Europe - June 2008 - Brussels Report - Tell Us Something We Didn’t Know (Page 9) Pharmaceutical Executive Europe - June 2008 - BioFutures - Friends, Acquaintances and Strangers (Page 10) Pharmaceutical Executive Europe - June 2008 - IT Matters - The High Cost of Swimming Upstream (Page 11) Pharmaceutical Executive Europe - June 2008 - IT Matters - The High Cost of Swimming Upstream (Page 12) Pharmaceutical Executive Europe - June 2008 - Strategy Fundamentals - Hidden in Books (Page 13) Pharmaceutical Executive Europe - June 2008 - Corporate Strategy - New Dimensions for New Business Models (Page 14) Pharmaceutical Executive Europe - June 2008 - Corporate Strategy - New Dimensions for New Business Models (Page 15) Pharmaceutical Executive Europe - June 2008 - Corporate Strategy - New Dimensions for New Business Models (Page 16) Pharmaceutical Executive Europe - June 2008 - Corporate Strategy - New Dimensions for New Business Models (Page 17) Pharmaceutical Executive Europe - June 2008 - Special Report: Making the Leap (Page 18) Pharmaceutical Executive Europe - June 2008 - Special Report: Making the Leap (Page 19) Pharmaceutical Executive Europe - June 2008 - Special Report: Making the Leap (Page 20) Pharmaceutical Executive Europe - June 2008 - Special Report: Making the Leap (Page 21) Pharmaceutical Executive Europe - June 2008 - Sales Force Incentives - The Goal: Setting Goals (Page 22) Pharmaceutical Executive Europe - June 2008 - Sales Force Incentives - The Goal: Setting Goals (Page 23) Pharmaceutical Executive Europe - June 2008 - Sales Force Incentives - The Goal: Setting Goals (Page 24) Pharmaceutical Executive Europe - June 2008 - Last Word (Page 25) Pharmaceutical Executive Europe - June 2008 - Last Word (Page 26) Pharmaceutical Executive Europe - June 2008 - Last Word (Page 27)
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