Why Are Companies Unsuccessful with BD&L?

Success and Failure Road Sign with dramatic clouds and sky.

Business Development and Licensing (BD&L) is an increasingly important activity for many pharmaceutical, biotech, and drug delivery companies. Yet, many companies struggle with these activities.

We have observed that companies struggle with BD&L for a number of reasons:

Top Down – Some companies are led by Chief Executive Officers or other Senior Managers who prefer to perform the BD&L activities themselves, in addition to their day-to-day activities. For some companies with qualified Senior Managers, this approach works perfectly fine.

However, companies whose BD&L activities are led by personality and ego (“I know everyone” is one tell-tale sign of BD ego.) rather than process will struggle in the long run, due to a lack of focus, lack of expertise, or a lack of a data-driven approach.

Bureaucracy – The potential opposite of Top Down, some companies develop complex, bureaucratic processes in order to identify and access BD&L opportunities. Bureaucracy becomes especially problematic when functional experts, such as Preclinical Scientists, are asked to carve time away from their day-to-day activities in order to participate in a one-off opportunity evaluation.

This frequently causes delays, inconsistent evaluation metrics, and may lead to inconsistent, irregular communication channels.

Proprietary Processes – Some companies believe that they have (or should have) a proprietary process for conducting business development.

Because of this proprietary process (whether it’s real or not), companies can struggle to then incorporate the feedback from external experts who may not have the right “fit” with these processes.

How did we arrive at this point?

We believe that part of the reason is that business development can be a rare event for many companies.

This scarcity of corporate BD experience means that the company who does not perform this activity routinely cannot build internal corporate competency and expertise. We see this manifesting itself in a few ways:

Bad Presentations – Here is a topic that deserves its own article. It will suffice for now to say that many presentations are simply too technical, incoherent, and designed for all audiences (instead of being customized).

Targeting Companies Instead of People – We’ve seen companies focus on targeting companies instead of targeting people with their in- or out-licensing message. Suffice to say for now that a scout for a multinational company is not a spokesperson for the entire company. Other scouts or managers in other territories may have different views on the opportunity, and may be more willing to champion it through their process.

A side effect of this scarcity is that Senior Management may not be fundamentally committed to the process, especially if BD&L is not a recognized core competency that management wishes to build.

Another challenge is that BD&L spans multiple disciplines…disciplines which very few individuals possess deep expertise and experience.

Taken together, we have a situation in our industry in which BD&L can be a sporadic, rare, seat-of-the-pants activity that many companies cannot perform well on a regular basis.

What if it’s the asset?

Now that’s the elephant in the room.

If you attend the same partnering conferences year after year, you will undoubtedly see the same assets marketed by the same companies with the exact same data.

Many of these assets are un-licenseable for a variety of reasons:

Unmet Need –  Sometimes the unmet need being addressed is not really an unmet need. In other words, the need being addressed does not actually exist because it is already satisfied by existing therapies.

Niches – Targeting a niche is potentially attractive from a sales and marketing perspective. However, this does not necessarily mean the clinical development program is proportionally small.

Development Risk – We had a client a few years ago with an asset that had completed clinical trials. The client asked us to run the ex-US out-licensing process while they focused on finalizing their US commercial plans. As one can imagine, there were many companies interested in a good asset which was waiting for a FDA Advisory Committee recommendation and subsequent approval.

Unfortunately, the Advisory Committee said that more trials were needed before approval…trials which would have required 3 times as many subjects as what the company already had in their data package. That investment requirement was too much for our client, and potential partners quickly lost interest.

So here was a case where the BD process was well done, in the sense that prospective ex-US partners executed confidentiality agreements, and had the commercial wherewithal to successfully commercialize this product in their home territories. However, with the prospect of having to invest in massive clinical trials, the asset withered and died, unpartnered and un-commercialized.

The moral of little story? Development Risk is not only real, it can appear even when assets appear to have an imminent approval.

So what should you do?

At minimum, we recommend getting an external second opinion on the entire process, from presentations to conferences to outreach emails.

A small investment and a month’s delay could mean the difference between a smooth process that makes headlines and one that doesn’t. Contact us to learn more about our BD Auditing services.

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