Friday, February 26, 2010

BioForum panelists make case for partnership credibility

By E. Douglas Banks

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Likening biopharma alliances to marriages, a panel of experts at the Mass High Tech BioForum in Boston this morning warned about 150 entrepreneurs and life sciences executives of the pitfalls inherent in chasing — and consummating — biotechnology partnerships.

The conversation began with how a biotech startup might approach a large pharmaceutical company, then outlined strategies for making the most of that “first meeting” with a licensor company, negotiating terms and balancing the need for due diligence early on, and then managing the alliance long term.

Smaller startups often balance their desires to set the terms of the deal with the need to not put too much pressure on a potential pharma partner, said Joshua Hamermesh, a former Genzyme Corp. executive who is now the senior vice president of strategy and corporate development at Pervasis Therapeutics. Hamermesh was most recently at Molecular Insight Pharmaceuticals Inc., where he led several licensing deals with Big Pharma, including Bayer-Schering and Novartis.

But Ben Thorner, head of transactions, strategic alliances, at Novartis Institutes for BioMedical Research, said that having startups approach his group with their own valuation isn’t so bad because it gives a pharma company some insight on how a biotech values its own intellectual property — and Novartis is still going to do its own due diligence before negotiations get too far, he added.

The panel was moderated by Jeffrey Quillen, life sciences partner at law firm Foley Hoag, and included Amir Nashat, general partner at venture capital firm Polaris Venture Partners; Jason Rhodes, vice president, business development, Alnylam, and a former VC from Fidelity Biosciences, the biotech venture capital arm of Fidelity Investments, where he was a partner and a founder of the group; and Gadi Saarony, corporate VP and licensing expert from PAREXEL Consulting.

For all of the experts, the notion of losing credibility — for either side of a partnership deal — may be the largest pitfall of them all. That can happen in several ways, but starting out the relationship with openness, honesty and willingness to build up trust was the biggest factor in making the relationship successful.

As the relationship develops, they said, continue that openness, and if data presents itself that shows a company’s product in a different light, then expose it quickly and don’t fall in love with your own IP, said Saarony. “Sometimes your baby isn’t as cute as you think it is,” Saarony said.

For Nashat, who is both a board director for several Polaris portfolio companies and an entrepreneur himself, deciding what you are as a company — “are you a product or are you a service?” — and then using that knowledge to set your strategy can help make future partnerships smoother.

The event took place at the Westin Copley hotel in Boston. The Mass High Tech BioForum  is an annual event and part of Mass High Tech’s ongoing quarterly Forum event series, which explores technology finance and industry sectors such as cleantech, robotics, mobile and other emerging technologies.