Partnering That Works: Follow A Targeted Business Development Plan
For many biotechnology companies, the first customer is a partner. Success in finding partners, selling to them, and knowing what to do with them can produce early revenue, resources to develop and commercialize products, and credibility to pave the way to funding and higher valuations. A successful partnership can be the most important sale in your company’s history.
The first stage of business development, where you develop strategies, identify partners and assemble your package, is often skipped in the hurry to start selling. While press announcements make it seem that big deals just happen, a successful deal is usually the result of a thoughtfully crafted business development plan.
The first rule of business development? Know thyself. Many companies spin their wheels pursuing partnerships of convenience (my CEO knows your CEO) or because they are attracted to a well-known name. Later, they find that the proposed partner cannot help them move forward or has lost interest because of a poor fit.
The lesson is to know precisely what you want. This clarity not only helps you identify the right alliances, it also puts you in a position of strength to communicate your benefits, negotiate sustainable deals and boost your long-term value.
Before deal making, find clarity by answering these questions:
* What commercial advantages will my product bring another company? At the same time, what company weaknesses will concern partners?
* Who and where is my competition (not now, but when my product is launched)?
* Who is my product going to be marketed to and who already has the best sales channels into those customers?
* How will my product fit with a partner’s products, distribution and sales? Consider price points, current products, market position, sale complexity, pipelines, competition, technology capabilities, sales force, etc.
Don’t just consider partnerships with similar companies. Look overseas. Look at your competitors and do your homework. As business development executives for Glaxo Wellcome or numerous startups, we have often received queries from companies who wanted to license products to us. A bit of research on their part would have revealed that these products were outside our scope.
Once you’ve done your homework, update your business development plan with realistic objectives, timelines and financial milestones. Your plan should get all the critical parties on the same page.
Then create marketing pieces — an introduction letter, information package and presentation. Tell your partnership targets who you are, what you have, why it is important for their company, what arrangements you seek and ask for a meeting.
Though you will need to customize each piece, creating a few “templates” will force your thinking about your positioning and will save time in the long run. But it is still critical to appeal directly to the needs and priorities of each potential partner. Do you hope to establish a technology license arrangement, a marketing alliance or a jointly developed product? Asking and answering questions like these will be critical to either propelling the relationship forward or quickly realizing that a partnership will not work.
Next, build relationships. As you meet prospective partners, ask more than you tell. Get to know them while you gain clarity about what you want and what you can offer. Then ask yourself a few more questions:
* What synergies can you develop? Look at the company’s culture and ask how they develop products.
* Do they have the required resources?
* Can they move fast enough?
* Will they assign a key person to the project and will that person be accessible, especially when things don’t go perfectly (and they never do)?
Only now, with a strong foundation in place, should you begin to negotiate partnership deals.
A word of caution
Once you have the perfect partnership, don’t grow complacent about your business development strategies. Your market will shift, players will consolidate, technology will alter the landscape and your market’s ecosystem will change. Stay on top of alliance news and product status and don’t underestimate the time and thought business development takes. Don’t forget that your competitors are also riding the changing tides. The company that has constructed the strongest raft will stay afloat.
The Keefer Group helps startups and other high-growth companies commercialize new technology, establish the business and develop a competitive edge.
BioMatch provides experienced advice to biopharmaceutical companies and biotechnology companies seeking partners and/or funding for development and commercialization. Julia Barnes Oliver served most recently as the director of business development at the former Glaxo Wellcome Inc.
COPYRIGHT 2001 North Carolina Biotechnology Center
COPYRIGHT 2008 Gale, Cengage Learning