Life Sciences Outlook 2012 Dutch biotech companies ... - NautaDutilh

A lack of ambition or healthy realism?
The most important reason for biotech companies
to seek an early alliance with Big Pharma is to obtain
(non-dilutive) funding or capital (see Figure 4).
“To think that you can remain independent and
become the next Amgen or Genentech is just not
realistic given the financing requirements for new
drugs and the cost of venture capital. Of all new
biotech products that deserve further development,
95% end up in a licensing deal with Big Pharma.”
more as a (temporary) marriage of convenience than
as a prenuptial agreement. In fact, it’s not uncommon
to have alliances with several pharmaceutical
companies at the same time. But while a future exit
may not be the main reason to form alliances with
Big Pharma, investors certainly don’t mind. “If you
aim for a takeover by Big Pharma – and VCs certainly
do – you need to appear on their radar screen early.
Before an actual deal is done, they need to be able to
follow you for a couple of years.”
Figure 4. What would be the predominant goals of a biotech company
in entering into a strategic alliance?
Obtain (non-dilutive) funding / capital
80
12
Validation of technology / valuation of
the company
Obtain funds, while retaining sufficient
freedom to exit the alliance
Increase the possibility of a complete takeover
14 9
12 9
24 19
Access to new markets through cooperation
with big pharma
10
8
Access the partner's know-how, IP and
development skills
Equity investment by big pharma
10
10 2
20
Access to the distribution capacity of big pharma
6
5
0 20 40 60 80 100
Weighted scores
■ Most important
■ Important
28
The second most important reason is that such an
alliance is seen as a welcome “stamp of approval” for
biotech companies.
Increasing the possibility of a complete takeover
through such an alliance ranks much lower. This may
reflect the fact that such an alliance is indeed seen
That access to a pharma partner’s know-how,
IP and development skills ranks almost equally low
is, according to some interviewees, a reflection of
several things. Among them is an underestimation by
many biotech companies of the difficulties involved
in later stages of development (e.g. regulatory
approvals) and clinical acceptance. Perhaps this