Pharma Competitive Intelligence, Then and Now 
Posted by Carlos on Sep 25, 2012

Humphrey Bogart as Sam Spade in the 1941 film ...

Times have changed since this guy was solving cases.

Many of you of a certain age who started working during the BI era (Before Internet) will recall how challenging pharma competitive intelligence gathering could be.

We remember the boxes of Annual Reports scattered around a small office. Add to this the black photocopies (remember those?) from various data books (remember books?) like S&P and many others.

Today, of course, things are quite different. We no longer check boxes on forms to order Annual Reports. We just download what we need; much of it for free. We also have access to some excellent analysis from various market and equity researchers.

Yet, the need for pharma competitive intelligence has never been greater, especially as the noise level has increased exponentially.

Further, we have the challenge of identifying and analyzing many more companies and competitors around the world continuously.

We had a situation over the past few weeks which highlights this new need for a modern, continuous pharma competitive intelligence.

We have a client that had previously invested in an excellent reformulation opportunity. Currently, there is nothing like this particular formulation on the US market. This particular program completed Phase I trials, and is about to embark on a Phase IIa program. The due diligence was performed internally, with some input from technical consultants on matters related to CMC.

To our knowledge, external support was not used for competitive intelligence.

Several months after the investment was made, our client discovered a company in Asia who claimed to have a similar candidate with the same drug, same route of administration, but different technology. The discovery was made as part of an internet search on another matter.

Critically, the competitor claimed to have completed Phase IIa studies in the US, and was ready for partnering.

So now our client was facing an interesting situation…their portfolio company was now trailing an unexpected, unanticipated, undetected competitor.

We were asked to execute a brief competitive intelligence exercise to learn as much as possible about this new potential competitor.

To make a long story short, we used a combination of approaches (including a lot of time on International Skype calls) to learn what we could.

In our report, we concluded that the competitor currently does not have the wherewithal to continue clinical development themselves. We also concluded that the competitor may struggle to out-license their clinical candidate due to issues with their particular drug delivery technology.

So while our client is sleeping easier now, this entire exercise highlighted the need for continuous pharma competitive intelligence, both pre- and post-transaction.

One simply never knows when a competitor, especially a strong overseas competitor, can appear at a major partnering conference with a well-advanced. technologically superior competitive asset.

A few suggestions if you are interested in continuous pharma competitive intelligence:

1. Use Google News & RSS or similar tools to monitor keywords related to your candidate or product. A lot of people start using this approach, but then abandon it because the amount of data that comes in on a daily basis can be large, repetitive, and difficult to manage. This is something that can be readily outsourced.

2. Monitor relevant groups on LinkedIn, although the comment regarding data overload can also be true for LinkedIn. This is something that can also be outsourced, and incorporated into Point 1 above.

3. Carefully search presenters and partnering sessions at the major conferences, and also at the therapeutic area-specific conferences.

4. Use external consultants to actively search and find information anonymously on your behalf. Unlike digital means, external consultants have the obvious benefit of leveraging their Contacts and asking questions.

With more data comes more noise, and more volatility, in the sense that a competitive situation can change relatively quickly. This is especially true in the reformulation/ drug delivery /505(b)(2) space, where many companies can have the resources and technologies to rapidly develop a product up to an advanced value inflection point.

Anyone interested in pharma competitive intelligence should consider instituting some of these practices, or retain consultants at a low cost to continuously monitor a specific area, and provide summary reports on a regular basis.

We would also argue that companies who are seeking funding should also consider a pharma competitive intelligence system or process, and make a note of that in the overall pitch to investors.

Missing a new potential competitor during due diligence can result in some rather awkward conversations with prospective investors, especially as the investing process can proceed for months at a time.


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