International partnerships are becoming ever more important as both big pharma and biotechs face the challenge of sustaining their growth in an increasingly pressured environment. The relationship is symbiotic – big pharma needs to fill its pipelines and biotech needs resources. Together, both can pool strengths and share risk whilst sharing rewards. In theory, this seems simple enough; in practice, it’s a long-term and delicate process. Therefore, a business strategy which incorporates partnership must provide clear direction on what, who and how. Whilst it is important to adapt to a changing environment, it’s not enough to follow trends: a partnership must make strategic sense to both sides; there must be a synergy between the two teams; and the collaboration must be constructed creatively and managed effectively in order to meet the needs of both companies.

THE DRIVE FOR INTERNATIONAL PARTNERSHIPS

International partnerships are an accelerating trend in the pharmaceutical and biotech industries. But is today’s landscape any different to that of a generation ago? In the 1960s, the pharmaceutical industry consisted of a number of small, family firms together with multinationals – though not on the scale we know today. Price pressure led to consolidation, which in turn led to a narrowing focus of the innovation landscape. As a result, gaps in pipelines began to emerge, creating a hunger for innovation to fill them. The pharmaceutical companies turned to the academic research community to help fill the pipeline.

By the 1980s, academics and their institutions had become more savvy, forming their own companies to realise the full potential of their inventions. Thus, the first biotech companies were born. At the same time, the financial community was quick to seize this opportunity and began fuelling the growth in this new industry by placing their bets on the most promising ideas. All along, established pharma has continued to consolidate. The legacy of all this activity has been a plethora of small biotech firms, together with multinationals. Does this sound familiar?

History has demonstrated that big pharma has a responsibility to foster a relationship with the smaller biotech companies in order to maintain and support the source of an increasing amount of innovation. Not helping to create an environment in which diverse cultures can flourish, creates the risk of stifling the ideas that will help each type of company to grow.