Can’t get there from here…
We’re back from another excellent BIO Europe convention. Held in Frankfurt, this year’s version was attended by over 3,000 industry colleagues, experts, investors, and hangers-on.
We spent the bulk of our time in one-on-one partnering meetings and receptions. So we did not attend any of the presentations or the Keynote address. Highlights from those events will probably be posted on partnering360 web site in the coming days.
As we review our meeting notes and recollections (some clear, some foggy), here are our observations from the conference.
Legacy Products – There are a number of investors and companies looking to build businesses around Big Pharma legacy products. This is not news. But what is news is how much more difficult this is to execute on a small scale. Big Pharma is now actively packaging baskets of assets and running genuine processes for these assets.
So for the small company looking to pick off the odd $5 million brand, it can be quite a challenge. Many products that remain are either part of an active process or are unsold for a good reason (i.e., not for sale, API sourcing issues, etc.).
The process we use is a combination of IMS data analysis and selective outreach with specific offers for baskets of assets. It’s the only way we have found to get BigPharma attention with a larger, one-off transaction instead of a series of smaller ones.
Having said that, smaller companies with on-market assets, especially those looking to raise capital, are increasingly willing to part with their assets, either as an asset sale or as a co-promotion. These deals won’t make the headlines, but they may be the only path forward for companies looking to build a legacy product-based business in the US or EU.
China – We met with 10 Chinese companies in Frankfurt. Many of these companies are managed by returnees with significant industry experience in the US. And, they have access to capital, so they are ready to execute licensing transactions to bring “Western” assets to the enormous Chinese market.
And the market is truly enormous. Take NSCLC, for example. China has ~549,000 incident cases of NSCLC. That dwarfs the 168,000 in the US, and even the 436,000 in the top 7 major markets.
Companies looking for outlets for their assets will be smart to work with consultants who have feet on the ground in China. (In fact, Lacerta Bio will soon announce a partnership which will fulfill this very need.).
Not For Everyone – Over the past few months, we’ve had more than one person tell us that licensing is “a young man’s game.” And it is true that business development, especially at the top of the funnel, requires a certain degree of energy and organization. This is not news. Yet we find it somewhat surprising when people in our field spend thousands of dollars on a conference and do not “work” the conference by scheduling as many meetings as possible, networking aggressively at the receptions, and so forth.
While in Frankfurt, someone pointed out to us that only ~20% of out-licensing processes result in a transaction. We don’t know if this is the case, but it sounds quite plausible to us. And it’s true that not all assets which are made available are actually license-able. But, it’s our hypothesis that some of these assets are never out-licensed simply because the process is run poorly.
So if your process is not going well, it could be that the asset is not attractive. It is also true that it simply could be you and your process. Do you have the courage to look in the mirror and admit it?
Small World – If you attend these conferences year after year, you tend to run into the same people over and over. Sometimes, these casual meetings can develop into friendships and/or long-term client relationships or partnerships. In our business, for example, it can take years before an asset (and therefore a client) is ready for the out-licensing process. So it’s imperative that a genuine relationship based on friendliness, competence, and trust be established long before proposals and wiring instructions are exchanged.
Now it would be easy for us to simply say “Don’t burn any bridges.” And indeed, this is true. But, in our industry, which moves at a glacial pace, it’s incredibly important (if you want to play the game) to be honest, friendly, forthright, and an overall nice person to be with. If this is not you, then please send someone else from your company to the conferences.
Coming Soon – We have a lot going on here at Lacerta Bio, so please stay tuned both on the blog and on Twitter for upcoming new content, projects, and partnerships. Incredibly, we’ll be preparing for JP Morgan and Biotech Showcase in a few weeks.