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The question of whether to partner with another company is critical to the long-term development of a biotech. Nonetheless, it can be easy for a small company to underestimate the resources it needs to put into a successful collaboration. Here, we’ll go over some expert advice on what to do and what not to do to set up biotech partnerships, keep them up and running and make them successful. Partnering with big pharma or another biotech can bring many benefits to a small biotech company. Beyond a flow of cash, the right collaboration can increase the chances of success of a development program and reduce the time it takes. “I think partnerships bring a lot of good things, the cash is really important, the validation, learning from big pharma – they have got a lot to teach biotech,” noted Edwin Moses, previous chief executive officer (CEO) of Ablynx. I asked experts in the biotech industry to give us their advice for biotechs seeking to enter and maintain successful partnerships. This is what they had to say! Think about what you want to accomplish “Rather than just looking for someone who can help you, approach it from a point of mutual benefit,” recommended Julia Schoelermann, Vice President (VP) of Business Development at 35Pharma. To find mutually beneficial partnerships, biotechs need to consider the stage of development their technology is at and whether it can contribute to a big pharma company’s pipeline. “If you are at the preclinical stage, you may change the technology, the indication, or the formulation, and maybe the way to deliver the product is not defined yet,” explained Georges Rawadi, Head of Biotech Studio Development at eureKARE and former CEO of YSOPIA Bioscience. Biotechs interested in a preclinical partnership should take into consideration is that a drug in preclinical development may be effective in indications for which it has not been tested yet. “The wealth of applications can also still be undefined at this time,” said Rawadi. As a result, biotechs may need to change the goals of their partnership as the drug is being developed. Once you enter the clinic, however, a drug’s properties have been investigated more extensively and the goals of a partnership are more defined. This allows collaborating companies to focus on funding clinical trials, seeking regulatory approval and marketing a drug. “It comes to more commercial terms discussions versus what you would do if there is an unexpected innovation that happens,” added Rawadi. Nurture a collaborative relationship Scientists are trained to look for hard, empirical data to back-up innovative ideas. When moving into the business world, however, they also have to nurture trusting relationships with potential collaborators. “Where science is all about data and facts, in business it is much more about the people and good data becomes table stakes,” said Schoelermann. “What I try to do before going into a meeting is, not only focus on my pitch, but think through how I can engage with the delegates on a personal level, and I try to consciously engage a more playful side,” Schoelermann elaborates. “At the end of the day, people won’t remember each detail, but they will remember how you made them feel.” Moreover, Schoelermann recommends you should not “insist that your drug is the best thing since sliced bread, because at the end of the day it comes down to clinical trials and effectiveness.” Be prepared for risk-taking Biotech is by its nature a dynamic industry -- we don’t know which treatments will become breakthroughs and which ones will fail until they are tested in patients. Companies from different parts of the globe deal with these uncertainties in different ways. To move ahead in this challenging environment, European and American biotechs could learn a thing or two from each other. “The only question the US investors had was ‘are you hiring enough sales people? Why don’t you hire more? Why aren’t you more aggressive in doing that?’,” Moses commented. “They accept the binary nature of biotech and they want to plan for success. Here [in Europe] everyone is a bit more cautious, which really is not the way to develop biotech.” While European biotechs could benefit from being more open to risk-taking, it’s not a one-way ticket to get treatments to work. “Americans are very optimistic, they are very forward-looking, they like risk-taking,” said Rawadi. “ But if they are positive or overly optimistic, it doesn’t mean that everything goes well. So you need to be careful about that.” Don’t let language barriers get in the way Partnering with an Asian collaborator can bring significant benefits to small biotechs given the large number of patients available to recruit for clinical trials. China, for one, is providing incentives for foreign biotechs to enter their market, such as accepting overseas clinical data and making it easier for young companies to get listed in Chinese stock markets. But while it may be the norm for most biotech companies in the West to use English, this is not always the case with more international partners. “There are really few European biotechs that speak Chinese, or Japanese, or Korean. And not all employees at your Asian partner are necessarily fluent in English,” Rawadi commented. “So you need to be aware of that to communicate to them in a very simple, clear and easy way to understand, and also go visit them on a regular basis to establish very good relationships and trust.” “You know, I do think it’s still not a very well known territory for a lot of companies,” Schoelermann explained. “Particularly for a smaller company it would take a lot of effort to open possibilities in such a new geography.” Biotech partnerships: you don’t always have to say yes Timing is vital for a biotech company to consider when entering into a partnership. Sometimes holding off leads to greater gains in the long run. For example, in January 2018 Ablynx rejected an initial bid made by Novo Nordisk to acquire the company for €2.7Bn in total. By saying ‘no’ at first, Ablynx raised the value of their shares, and later that month it was acquired by Sanofi for €3.9Bn. “Novo were particularly interested in our lead compound. They were a little bit interested in the platform itself, but not entirely sure what to do about some of our other programs,” said Moses. As he explained, having a genuine interest in a company’s technology can go a long way towards establishing a trusting partnership that ends successfully. “I think the exciting thing about Sanofi was they looked at the platform in great detail and they are very interested in an awful lot of what we are doing. It was a big thing that we had already worked together so a trust had been built up with the partners." Moreover, holding off on a partnership can allow a biotech to further progress its own research. According to Varvara Melikhova, founder and CEO of Unison Innovations, this can lead to a company being offered a better deal when it comes to upfront payments, milestone payments, and royalties. Attend biotech industry events to identify partnership opportunities Conferences can be one of the best ways to find potential partners, as they provide a platform for biotechs to present their assets and clinical trial data. With this in mind, it's important for companies to attend as many industry events as possible, so they can show off their development programs to big pharmas that might be interested in partnering with small biotechs. "In this scenario, this can cause a big pharma company to approach a smaller company, instead of the reverse, giving it greater leverage when it comes to negotiating a deal," said Melikhova. Melikhova provided Pfizer's Hightech Summit as a good example of an industry event that can lead to successful partnerships, as it "offers startups the opportunity to network with neighboring startups and establish contacts with funds, VCs and corporate investors." Don’t underestimate the resources you need to manage your biotech partnerships Managing a partnership is perhaps one of the greatest challenges aspiring biotech entrepreneurs will face, and dedicating resources specifically to the partnership can be instrumental in its success. Hiring an external consultant could help a biotech navigate the inevitable bumps that come along the road. When looking for an external consultant, Rawadi recommends that biotechs look for someone with “a scientific background to understand the technology, the business, and also people that have very good interpersonal relationships, as well as a problem-solving mindset.” “An arrogant attitude is to be avoided,” added Rawadi. “You need to interact with different cultures, to basically deal with anyone around the planet.” An external consultant should help a biotech build a partnership that is mutually beneficial. A scientific background combined with an approachable personality are essential for a consultant to help a biotech build long-term trusting relationships with their partners. Develop a patent strategy According to Melikhova, having a patent strategy is a crucial part of business, providing a foundation for future growth, revenue generation, and investment by protecting a company's new technologies or products. Patents also help to prevent rivals from entering the market, and can be an attractive feature for potential partners. "In the absence of a tangible product, partners consider the potential future commercial revenue if the product or treatment makes it to market," explained Melikhova. "The decision of whether or not to invest, and the scale of any investment, is based on how well the technologies that form the core of a company have been protected." Keep a positive outlook Being at the helm of a biotech partnership is not easy, and keeping a positive mindset can help bring you through challenging times. “You have to be optimistic. Be patient, think about things, listen to people’s council, but then as a CEO of a company you have to make the decision,” Moses said. “You will get patted on the back when things go well and hit on the head when things don’t go so well. So you have to be quite strong and plan a way ahead.” And don’t forget to thank the people who helped bring your biotech to where it is today.“Follow up and be gracious and thank people for taking you in,” emphasized Schoelermann. “Don’t only engage with people when you want something from them.” Entering into a partnership can have many benefits for biotechs, from combining different technologies into more effective treatments to bringing drugs to patients more quickly. Before rushing into a collaboration, however, biotech leaders should consider what they hope to accomplish in a partnership, what they can offer to their partner, and the resources they would need to put into a successful collaboration.

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