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ADDALectureSeries:BusinessDevelopment
2SouthernResearchDrugDiscovery
“BusinessDevelopment”:ABitofaBlackBox
SomeReallyCool,Innovative
ResearchResults
SomeOtherStuffHappensHere...
YougetaTONofmoneyfroma
pharma,biotechorVC!!
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• Allofourprogramsareveryearlyinthedrugdevelopmentarc
• We(ADDA)canonlytakeprogramstoacertainpoint:IND,maybePhaseI
SouthernResearchDrugDiscovery
“BusinessDevelopment”:WorkingDefinition
BusinessDevelopment:Findingindustrypartnersthatarewillingandableto
takeourprogramsforwardthroughclinicaldevelopmentandtothemarket
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ProspectingConfidentialScientificDiscussions
Negotiations DueDiligence DealClosing
SouthernResearchDrugDiscovery
PeekingInsidetheBlackBox...
Onpaper,licensingaprogramtoapharmaorbiotechcompanyisprettystraightforward:
5SouthernResearchDrugDiscovery
PeekingInsidetheBlackBox...
Butinpractice,theprocesslooksabitmorelikethis:
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RemembertheFairyTale......AbouttheprincesswhogoesaroundkissingfrogstofindtheonethatbecomesherPrinceCharming?
There’saLOTofthatinBusinessDevelopment....
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...it’simportanttoreducethe“Frog:Prince Ratio”asmuchaspossible!
SouthernResearchDrugDiscovery
Soifyouhavetokissfrogs...
Itisimportanttounderstand:• Thepotentialtherapeuticindication• Thecompetition• Ourprogram(goodandbad)
• Whoisinthistherapeuticarea?• Whohasacompetingprogram?• Whoisopento(very)early-stageassets?• Isthereanyinterestinourspecificprograms?
8SouthernResearchDrugDiscovery
ReducingtheFrog/PrinceRatio
• BigPharma– includesBigBiotech• RegionalPharma– EU,JP,KR,etc.• SpecialtyPharma• ClassicBiotechs• “InBetweeners”• Investors
Evenwithallofthefiltersapplied,wetalkwithmanydifferenttypesofpotentialpartners
Andallofthediscussionsstartthesameway...
9SouthernResearchDrugDiscovery
“Sotellmeaboutyourprogram”
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• “Howfaralongistheprogram?”• “WhatisyourIPstatus?”• “Doyouhaveanyinvivoproof-of-concept?”• “HowlongbeforeyougettoIND?”
• Plusanumberofquestionsthatarespecifictotheindication,targetand/ormechanism
SouthernResearchDrugDiscovery
StandardQuestionsfromCompanies
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• Withoutgoodscience,businessdevelopmenthasnothingtodo
• Basicscience– Novelinsightintodisease– Clearunderstandingofmechanism– Invivoproof-of-concept
• Appliedscience– Chemistry– Pharmacokinetics(includingoralbioavailability)– Toxicity– IntellectualProperty
SouthernResearchDrugDiscovery
ItAllComesDowntotheData
12SouthernResearchDrugDiscovery
“Sothefirstmeetingwentwell–Nowwhat?”
ProspectingConfidentialScientificDiscussions
Negotiations DueDiligence DealClosing
“Youarehere”
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• Itisimportanttogetscientific“buy-in”fromthepotentialpartneronaprogram
• Iftheirscientistsaren’texcited,oriftheyhaveconcerns...
• Importanttohavetheirexpertstalktoourexperts–divedeepintothescience
SouthernResearchDrugDiscovery
MoreScience!
“Thereisnosuchthingastoomuchdata.”
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• TermSheet:Asummaryofeachside’srolesandresponsibilitiesinthepartnership
• Whopayswhatandwhen?• Whatistheterritoryandindication(s)?• Whomakesdecisions?• Whoisresponsiblefor
– Furtherdevelopmentsteps– Patentapplications/persecutions– Regulatoryfilings
• Whathappensifthepartnerchangestheirmind?• Howarepotentialconflictsresolved?
SouthernResearchDrugDiscovery
ComingtoTerms
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Diligence:WhereEVERYTHINGisShared
• Scientific– Experiment-by-experiment
– Notebook-by-notebook– Animal-by-animal
• Clinical– Dose-by-dose– Patient-by-patient– Alllabvalues
• Manufacturing– Yields– Batch-to-BatchComparisons
– Stability
• IntellectualProperty– PatentsIssued– PatentApplications– “FreedomToOperate”
SouthernResearchDrugDiscovery
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• Allagreed-uponterms,wrappedinlegalese
• Alsoincludesextensiverepresentationsandwarranties– “Yes,wereallydohavetherighttoenterintothisdeal...“
– “Weguaranteetouseourbestefforts...“– “Wewon’tsueyouifourpeoplemessup...“
• Lotsofbillablehoursforthelawyers• Legalcontract,signedbyappropriateofficersfrombothsides
SouthernResearchDrugDiscovery
DefinitiveAgreement
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• Gettingfinalsignatures(Hint:Avoidholidays)• HSR:“Hart– Scott– Rodino”,or“There’snodealuntilthegovernmentweighsin”
• Cashingthecheck• Hittingthebar– hopefullywithyournewpartners!
SouthernResearchDrugDiscovery
ClosingtheDeal
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• Alliancemanagement– “Nowthatwe’reworkingtogether,howdowekeeptrackofthings?”
–Meetings,agendas,budgets,reportstoseniormanagement,etc.
• Hittingmilestones–Whatresourcesdowehavetocommittohitthegoalsthatwecommittedto?
–Whatcanwedotohelpourpartnerhittheirgoals?
SouthernResearchDrugDiscovery
Andthenthenextmorning....
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DealTimeline
InTheory
• Sixmonths
• Discussionswithoneortwocompanies
InReality
• 18– 24months
• Discussionswithupto40companies(wehear“No”inmanydifferentforms!)
SouthernResearchDrugDiscovery
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• Theyhaveagapintheirpipeline• Theyareinvestedinthetherapeuticarea• Theywanttobroadentheirpipeline• A programclearlyshowsvalue– Scientifically– Commercially/Financially
• “Keepingupwiththepack”
SouthernResearchDrugDiscovery
WhyCompaniesSay“Yes”
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• Programistooearly• Theyarelookingatmultipleprogramsforthisindication– andpickanotherone
• Theyaresimplygatheringalittlecompetitiveintelligence
• Questions/concernsabout:– Targetand/ormechanism– Chemistry– Pharmacokinetics– Toxicology
• Financialsaretooriskyordon’taddupSouthernResearchDrugDiscovery
WhyCompaniesSay“No”
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ThingsChange:“Frog”↔“Prince”
• “There’sbeenachangeinstrategy”
• “WehaveanewCSO”• “We’regettingbought”• “Weneedtoraisemoney”
• “Theteamisbeingrelocated”
• “WehaveanewCEO”• “We’rebuyingsomeone”
• “Ourprogramfailed”• “Someoneelse’sprogramfailed”
• “We’regoingthroughareorganization”
SouthernResearchDrugDiscovery
Someofthesecanbegoodnews,somenotsogood
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Collectcompanyfeedback
Provideinformationtoresearchersongaps&drivers
Researchteamsuseinputtorefine
program
Presentprogramstocompanies
SouthernResearchDrugDiscovery
AVirtuousCycle
SouthernResearchDrugDiscovery
