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Evolution of partnering in drug development is leading to new business models for biotechnology

11 October 2011

  • Old biotechnology model of ‘going it alone’ rare and increasingly less valid;
  • Demonstration of true product differentiation now essential;
  • Smarter biotechnologies need to partner and engage in a whole new way.

In the face of ongoing economic pressure and risk aversion, the evolution of partnering in drug development is leading to a reevaluated approach to biotechnology, according to Deloitte, the business advisory firm.

Commenting ahead of chairing a session on the opportunities and challenges in pharmaceutical partnering at the BioPartnering Europe Conference this afternoon, Jason Rushton, a director in corporate finance and the biotechnology sector leader for Deloitte Switzerland, says: “There is a need for all in the pharmaceutical industry to be fully aware of the new environment under which we now operate.  In more difficult financial times, reducing drug development risk from the outset and cost sharing have become essential. The old biotechnology model of ‘going it alone’, financing and developing a product to clinical proof of concept, followed by a high value out license to a big pharmaceutical company is rare and increasingly less valid.

“For successful drug development, it is no longer sufficient to demonstrate just safety and efficacy. Drug developers need to show true product differentiation via label claims, defined payer benefits and, factor in the impact of reimbursement to make informed drug development and commercialisation decisions.”

Partner engagement
Rushton continues: “As a result, the smarter biotechnology groups need to take on partners and engage in a whole new way.  They need to talk to the large pharmaceutical businesses as early as possible, seeking to learn from their larger peers and creating collaborative drug developments that are not only less risky, because of the shared resource and skills employed, but also of higher quality. The outcome is a drug candidate and data package that is much easier and more valuable to license and commercialise.

“The reception and interest to such an approach amongst the licensing teams at the major pharmaceutical groups is strongly positive.  Many are aware that with return on investment on in-house R&D under pressure, a source of quality, externally-derived drug candidates cannot be ignored.  Many have had to adjust their approach and flexibility to partnering as a result.”

-Ends-

Notes to Editors:
About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

For more information, please visit www.deloitte.co.uk.

Member of Deloitte Touche Tohmatsu Limited.

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