The discussion was quite interesting, and we encourage readers to check it out.
The topic for this discussion was whether or not M&A is being brought earlier and earlier into the R&D lifecycle. And, if so, what are the implications from the perspectives of a biotech company, a big pharma company, and a VC.
Here are a few ideas from the discussion which caught our eye:
Earlier Tracking – Kevin Johnson from Index Ventures noted that companies in their portfolio are “…tracked far earlier…and tracked fairly aggressively.” This is interesting because if you are a biotech with a novel asset that is of potential interest to big pharma, then you should be preparing for a trade sale essentially from Day One.
This implies, for example, having corporate non-confidential and confidential presentations and data prepared and well-organized, having a communications plan for management and Board members, etc.
This also suggests that companies who have clear search criteria and strategies have scouting networks and systems which can spot and track nascent companies for future transactions. No longer are the scouts waiting for opportunities to come to them, especially in therapeutic areas where competition for novel assets is high, such as immuno-oncology.
So be prepared…
CVRs not easy for GSK – Beverley Carr from GSK noted that transactions which include contingent value rights are “…not so easy for GSK, which is a function of us being a UK accounting company.” Now we’re not experts in international accounting, but one would think that the smart City accountants and lawyers would have figured this problem out, no?
Tail Wagging The Dog – Should Sales and Marketing drive the BD wish list, or should BD simply find the best assets and have Sales and Marketing respond to the pipeline? Similarly, should Commercial drive R&D strategy? To put it another way, should you license your prized asset to a company who has recently exited that therapeutic area?
The debate amongst the panelists was quite interesting. We tend to agree with the notion that it’s far easier to build a sales and marketing team than it is to find a great asset. But we certainly understand the other side of the argument was well.