ONE SIZE DOES NOT FIT ALL Why Partnering in the Life Sciences Needs More Than a CRM

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1 ONE SIZE DOES NOT FIT ALL Why Partnering in the Life Sciences Needs More Than a CRM 50 cours de la République, les Gémeaux Villeurbanne France t +33(0) f +33(0) Nassau Street, Suite 711 New York, NY USA t f Avenida da Republica 59 3rd Floor, Lisbon Portugal t

2 C O N T E N T S A Executive summary 3 B Partnering s Critical Impact 3 C PRMs: Designed for Partnering 4 D CRMs: Just Not Cutting It 5 E Inova: The Pharma PRM - Plugged into the Life Sciences Inova - all rights reserved I 02

3 A. EXECUTIVE SUMMARY During the last 5 to 10 years, the business and operating models of pharmaceutical companies have seen a fundamental shift. Specifically, more and more compounds and products are sourced externally. Biotechs and universities are the main sources of external innovation. Today, pharma s top companies source over 50% of their molecules from partners. Partnering also brings higher success rates and lower costs. In-licensed drugs, for example, have a 27% success rate after the first human trial versus 16% for their in-house peers 1. This fundamental shift has triggered a change in terms of organization. Business Development and External R&D departments now include hundreds of professionals. The types of partnerships and deals taking place are also more complex than ever before. Opportunities in collaboration, co-research, co-development and licensing by geography or indication are increasingly common. As a result, the number of opportunities reviewed every year has exploded. The largest organizations evaluate thousands of opportunities. This can no longer be managed with traditional tools such as s, erooms and Microsoft Office (Word, Excel, etc.). Even homegrown, custom systems cannot be scaled to meet the fast growing volumes and diversity of end users needs. Data integrity, process consistency, confidentiality and performance are just out of control. Business Development professionals need a tool that will manage all intelligence related to opportunities and partnerships Business development professionals need a tool that will manage all intelligence related to opportunities and partnerships - a Partner Relationship Management solution (PRM). PRMs are similar to a Customer Relationship Management solution (CRM), but enhanced to encompass the entire spectrum of partnering activities. While CRMs focus on sales, PRMs revolve around partnering. Key features include functionalities like technology assessments, partner evaluations, due diligence, contracts and project management. Additionally, PRMs are specialized for the life sciences. They integrate directly with relevant content providers in order to centralize all partnering intelligence. Using a PRM, business developers spend less time gathering, tracking and reporting information and more time in front of partners. Indeed, an efficient, structured partnering process is the foundation for being a partner of choice. Using a PRM, organizations gain: - 20% increase in efficiency because information is retrievable in one click - Corporate memory, making partnering intelligence exploitable and eliminating duplicate evaluations - A reputation as partner of choice, by quickly responding to partners B.Partnering s Critical Impact Partnering is a critical success factor for life science companies. Most leading pharma companies have late stage pipeline valuations that are predominantly externally driven. On average, external innovation makes up 64% of late stage pipeline value 2. Further, these numbers have been stable in recent years. This suggests that partnering will be critical to the success of large pharmaceutical companies in the years to come. 1 Mestre-Ferrandiz, Jorge, Jon Sussex and Adrian Towse. United Kingdom. Office of Health Economics. The R&D Cost of a New Medicine. London: Office of Health Economics, Deloitte and Thomson Reuters. UK Centre for Health Solutions. Measuring the Return from Pharmaceutical Innovation 2013: Weather the Storm? London: Deloitte, Inova - all rights reserved I 03

4 Source of late stage pipeline valuation, Partnering also has a significant impact on R&D costs. How? As mentioned, in-licensed drugs have a higher success rate than in-house. By improving the overall clinical approval success rate, total R&D costs per approved drug are decreased (other things held constant). For instance, for an organization with a 21.5% success rate and a cost per drug of US$802m, the cost per drug would fall to US$640m if the success rate were increased to 27% 3. Clearly, investing in partnering capabilities is a bet that pays off. C.P R M s : D e s i g n e d f o r P a r t n e r i n g Successful partnering involves many different departments. Scouts, business development and alliance management professionals are the central players, but finance, marketing, legal and R&D likewise play important roles. This diverse team can capture the best opportunities only if they have access to consistent, up-to-date intelligence. Simple tools that worked in the past cannot handle the quantity and diversity of information. They are difficult to maintain, tedious to update and not secure. Business developers need a more sophisticated tool. PRMs are designed to help scouts, business developers and alliance managers do more in less time by managing more data better. What is it exactly? It s similar to a CRM, but custom-made for partnering in the life sciences. A PRM s unique features and deep industry integration make it a distinct and superior tool for partnering. Read on to learn more. With access to the right information at the right time, business developers can pursue the best deals. Corporate Memory First and foremost, PRMs are an important source of corporate memory. Business developers are in touch with thousands of people, companies and assets. This generates an incredible amount of data. A PRM stores this intelligence, making it available for departments across the globe. This knowledge is also retained, even if staff members change. To protect sensitive intelligence, there are controls to limit who has access. But most importantly, corporate memory makes partnering information exploitable. Duplicate efforts, such as evaluations, are easily avoided. Efficiency is increased by 20% because time is no longer lost looking for documents. It s all in one place, just a click away. Life Science Industry Connectivity A PRM manages more than just the information generated by the enterprise. It also connects directly with scientific and competitive intelligence providers. Data from providers like Thomson Reuters, EBD and more, can be imported, centralizing partnering information. As a result, partnering professionals only have to consult one place as they prepare reports, get organized for conferences and monitor opportunities. At conferences, for example, one glance will tell them which partnering meetings are coming up, who the attendees are and what assets, contacts, opportunities, etc. are related. With access to the right information at the right time, business developers can pursue the best deals. 3 Mestre-Ferrandiz, Jorge, Jon Sussex and Adrian Towse. United Kingdom. Office of Health Economics. The R&D Cost of a New Medicine. London: Office of Health Economics, Inova - all rights reserved I 04

5 Collaborative Evaluations To decide which deals to pursue, or not, business developers need input from experts. Using a PRM, they can solicit evaluations from experts all over their organization. Opportunities can be assessed according to anything, from technology feasibility to market size. Since the evaluations are online, they are easy to compare and won t be misplaced. If a declined opportunity later resurfaces, the business development team immediately knows why it was refused and if the decision should be revisited. Structured Due Diligence Deal-making is complicated. That s why a PRM supports a structured dealclosing process with milestones, including due diligence. A clear workflow improves opportunity visibility and tracking so that they do not get lost in the shuffle. By adding structure to the process, steps aren t missed or procedures forgotten, making due diligence reproducible and secure. Further, a standard process helps business developers get back to partners quickly, supporting the organization s reputation as a partner of choice. Alliance Management With a PRM, alliance managers find all the details they need to develop strong relationships. The relationship history, contract, amendments, governance documents, milestones, payments and non-financial obligations are all there. Periodic relationship health check tools analyze feedback from both parties, helping uncover issues early. Finally, alliance managers are reminded about upcoming payments, whether they are triggered by a date or a milestone. These functionalities help alliance managers focus on what really matters: building profitable partnerships and developing a reputation as a partner of choice. D.CRMs: Just Not Cutting It If you re still asking yourself why CRMs don t suffice, here s why: While CRMS are great for sales, they re not for partnering. CRMs have to be adapted to partnering, which requires a long and intense configuration. They also don t connect with content providers from the life sciences. All external data must be manually entered or not at all. Having to chase down information stored in various sources makes reporting a time-consuming challenge. Finally, CRMs, with their focus on sales, neglect key features - there is no support for evaluations, due diligence or alliance management. E.I n o v a : T h e P h a r m a P R M - P l u g g e d into the Life Sciences A life sciences PRM solution encompasses the entire partnering process, from scouting new opportunities to managing alliances. Developing a tool that responds to the evolving needs of business developers is exactly what we ve done at Inova Software for the last 13 years. By working closely with our Pharma leaders, we ve developed an acute understanding of pain points and best practices. Further, we are integrated into the life sciences industry, partnering with the industry s best content providers like Thomson Reuters and EBD. This expertise is what enables our solution to fulfil the needs of business development professionals today and what drives our roadmap for the future Inova - all rights reserved I 05

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