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Bolstering Product Portfolios: Resources, Structure and Process for Effective In-licensing Organizations

ID: OP-93


9 Info Graphics

11 Metrics

28 Narratives

31 Best Practices

Pages: 93

Published: Pre-2013

Delivery Format: Shipped


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Gain insight into how to structure in-licensing organizations, develop processes that facilitate the ability to identify the best opportunities and move smoothly from initial contact to binding agreement. This study provides particular attention to oncology in-licensing because it is recognized as a particularly competitive and scientifically difficult area in which to win valuable deals. By examining how the best organizations operate under such demanding criteria, other in-licensing operations can apply effective methods to their own business development operations and goals. 

Industries Profiled:
Pharmaceutical; Biotech; Chemical; Health Care; Medical Device

Companies Profiled:
AstraZeneca; Sanofi-aventis; Bristol-Myers Squibb; Genentech; GlaxoSmithKline; Johnson & Johnson; Novartis; Roche

Study Snapshot

Faced with the exorbitant and rising cost of new product development, large companies – particularly pharmaceutical firms – increasingly rely on in-licensing new technology as a key source of continued growth. However, organizations tasked with finding and cultivating the best in-licensing deals face many internal and external hurdles to success.  This Best Practices Benchmarking™ Report provides guidelines to managing this important area of business development by profiling nine highly effective in-licensing operations and revealing the best practices that make them so successful.

While the emphasis of this study is on pharmaceutical companies that license developmental drugs with biotech companies or research organizations, the discussions of strategy, structure and process for these in-licensing groups can be meaningfully applied to business development efforts in any industry.

This study is invaluable, as it details the experiences of nine leading pharmaceutical companies with proven track records of developing effective in-licensing organizations. These in-depth case studies discuss and reveal key parameters such as: 

  • Defining and executing the corporate in-licensing strategy. 
  • Staffing the group with the right talent in the right numbers.
  • Shepherding thousands of compounds through the in-licensing process.
  • Measuring overall success in in-licensing.

Augmenting these case studies is a thorough documentation of important benchmark metrics. The report also identifies and explains in great depth and clarity dozens of essential tactics to bolster your portfolio through world-class in-licensing.

Benchmark metrics included in the report cover:

  • Core Team Staffing Levels
  • Decision Points in Li-Licensing Process
  • Number of Deals Reached Annually
  • Cycle Times to Reach Deal Conclusion
  • Opportunities Examined Vs. Deals Signed
  • Proactive Vs. Reactive Opportunity Reviews

Sample Case Study

The report contains 9 case studies and more than 30 practices. An excerpt of one case study appears below: 

Company A Case Study

Strategy: In the past, Company A focused on single products as business development opportunities, but now the company uses in-licensing opportunities as a means to develop agreements to license entire product pipelines from target biotech companies. This is driven in part by biotechnology companies seeking more comprehensive partnerships because they need the money to fund operations. Company A is interested in pursuing these broader deals because it allows them to leverage relationships to achieve a more robust portfolio of products. The company still makes room for opportunistic projects. Company A has a Disease Area Strategy committee, which sets licensing strategies in all therapeutic areas.  Strategy is reviewed when major changes occur to the drug portfolio, or when changes occur in the competitive environment – about every two years.

Structure: Company A has a core business development group with overall expertise in several therapeutic areas. This group reports to a corporate business development organization that oversees all business areas.

Core Group Staffing: Company A has the largest core group dedicated to oncology in-licensing in the benchmark class. This group consists of four to eight people wholly dedicated to oncology, including two to four finance positions and two to three business evaluation positions. One to two marketing positions have 75 percent of their time dedicated to the in-licensing group. All of the licensing personnel are located at the company’s U.S. headquarters. The executive director of global business development has responsibility for licensing and acts as champion for the preliminary stages of the in-licensing process, but hands the project off to the due diligence team when it reaches that stage. The core group staff has an average of more than five years of experience in pharmaceutical business licensing.

Process: In the initial “triage phase,” the core business development group makes an initial screen of the more than 300 opportunities based on criteria defined in the disease area strategy and research strategy. Once compounds are identified, licensing liaisons coordinate and assign research, clinical development and legal staff to the core business development team in the assessment and prioritization phase. This group checks patents, and weighs scientific merits of the compound and the target. This involves evaluating the compound’s trial data research in the context of other published data. If there is significant discussion about the target, Company A secures a Materials Transfer Agreement so the evaluation team can test the compound in its own labs. At the end of the assessment phase, the project champion, who oversees the triage and assessment phases, makes a presentation to a peer-review committee of all Company A licensing directors. If the compound passes muster, another presentation is made to the functional heads of the relevant business unit. Both meetings are standing monthly engagements. Approval by both groups is required to advance a compound to the due diligence phase. An internal financial peer-review also takes place.

At this point, the business development group hands the project off to the due diligence team. This team consists of a group of 20 to 30 senior managers from core areas, including manufacturing and regulatory. There is some backlog for due diligence – five to 10 opportunities are evaluated for due diligence each year.

If the compound moves forward, a dedicated team of negotiators (which report to the corporate global head of development and licensing) works with the due diligence team to contract an in-licensing agreement for the compound. Once approval for the deal is secured and the partner company agrees to the deal terms, the project is handed off to lifecycle and R&D committees.

Information Sources: For information on which drugs it will seek out for in-licensing deals, Company A relies primarily on major therapeutic area conferences where data on new compounds are published. The company’s market strength provides contact with many opinion Key Opinion Leaders, which Company A depends on for market information that could influence decisions, such as treatment practices, upcoming technologies, and characteristics of different classes of drugs.

Success Measurement: Company A measures the effectiveness of its in-licensing effort solely on the quality and outcomes of the deals that are produced. They are not measured on the interim steps or the number of deals that are looked at.

Sample Data Graphic
The report contains 18 information and data graphics. One appears below, showing a breakdown of the Organizational Fit of In-Licensing Teams among the benchmark class.

Table of Contents

Executive Summary
  • Project Overview
  • Benchmark Class
  • Report Structure & Organization
  • General Recommendations
  • Additional Key Findings
  • Next Steps

Case Studies
  • Company A - I
  • Response Matrix (Selective)
  • Lessons Learned Matrix

  • Overview
  • Focused vs. Opportunistic Approach
  • Risk Tolerance
  • Growth vs. Filling Gaps

  • Chapter Contents
  • Overview
  • Personnel Resources
  • Organization and Reporting Lines
  • Measuring Success

  • Chapter Contents
  • Overview
  • Quality
  • Efficiency
  • Clarity/Transparency

List of Charts & Exhibits

Organizational Charts (9 charts, for Companies A through I)
In-Licensing Process Maps (9 maps, for Companies A through I)
Deal Making Influencers
Deal Performance
Strategy Responsibility Spectrum
Core Licensing Team
Core In-Licensing Team Size
Ideal Business Development Team Member Skills
Organizational Fit of In-Licensing
Proactive Opportunities Reviews
Deal Funnel