Tuesday, January 08, 2013

Grading Pharma Partnering in 2012: Needs Improvement

Biotechs looking to out-license assets are generally less satisfied with their potential partners, particularly with industry’s largest companies.

What’s more the areas where larger companies tend to excel – regulatory, reimbursement, commercial and market access capabilities, for instance – are seen as increasingly commoditized skillsets.

These are two takeawys from The Boston Consulting Group's latest biopharma partnering survey, which you can read about in more depth in our latest issue of IN VIVO.

San Francisco-based BCG partner Dirk Calcoen talked wth us about this latest iteration of the survey, the consulting firm's fifth since 2003. It was the first time that biotechs with assets for sale said they were less enthusiastic about potential partners' capabilities since BCG started the survey. “Even the companies that score really well, like a GSK – which of all the big companies is on top of the heap in terms of partnering characteristics – have actually moved down substantially” in the eyes of potential partners, he told us.

So what's going on? Perhaps its the fact that companies are doing fewer deals -- fewer biotechs finding partners might sour the group on the buy-side companies. Large companies may have also become complacent with their perceived 'partner-of-choice' status. As for why commercial capabilities are less of a draw for biotechs -- we're scratching our heads here. But it's possible that asset-sellers consider these characteristics prereq's for sitting down at the table -- and haven't yet begun to differentiate among large companies' skillsets. That also suggests bigger co's need to do a better job of demonstrating their prowess in these areas.

There are of course some bright spots. AZ hadn't featured near the top of BCG's survey in the past but put in a good showing this time around -- a result of a concerted effort to improve its standing among potential partners. (AZ of course also shared honors in this year's IVB Deal of the Year competition in the M&A category.) Once again Roche, GSK, and Merck all performed well -- just not as well as in years past.

Perhaps most interestingly some smaller companies have inched their way to the top of the league tables. Celgene and Novo Nordisk ranked first and second as companies that give sell siders have a positive impression. They also finished in near the top in an average ranking of nearly twenty attributes BCG measured in terms of what sellers were looking for in a partner.

Read our IN VIVO piece here. For more information on the survey and a summary of findings from BCG, click here.

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