IN A world where money is harder to come by, big pharma is beginning to rethink its relationship with much smaller companies 鈥� and academia. 鈥淪mall companies have a culture that can be beneficial to [big pharma] in terms of product development,鈥� says Joe Panetta, CEO of Biocom, the San Diego-based industry association which represents some 550 biotech companies in southern California. The giants are increasingly prepared to work with, and even buy, small firms.
Importantly, big pharma now realises that the small firms it has bought work best left to operate as independent units. 鈥淭here鈥檚 an appreciation of their ability to move quickly, to be innovative and have a culture that is very difficult to create in a large company,鈥� Panetta says. Smaller companies need to know that, and should sell those benefits to larger firms. Glen Giovannetti, Ernst & Young鈥檚 global life sciences leader, agrees. 鈥淏ig pharma benefits by having a vibrant ecosystem of smaller innovative biotech companies,鈥� he says.
To get big pharma backing, small firms and their teams must be flexible and nimble. That is also true for attracting venture capital. 鈥淭he capital coming into biotech is still sizeable but is not spread as evenly, especially for early-stage companies,鈥� says Giovannetti. 鈥淭he ones who get funded tend to get well funded, but business models have become much more efficient.鈥� Smart companies grow workforces and build infrastructure only as and when needed.
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Power in numbers
Sharing expertise and resources can be key to survival, but for it to work, you must tell others what you are doing, says Ken Jones, CEO of the European arm of . 鈥淲e send key scientists to conferences to discuss trends and breakthroughs. Many diseases have multiple targets 鈥� in certain areas you can鈥檛 do it alone.鈥�
Sharing resources means small companies can carry out research on a scale they never could do alone. To test a hypertension drug, for example, you need a study involving 5000 to 10,000 people. 鈥淚t might be better to spread the risk with another company than do it alone,鈥� says Jones.
Academia can also benefit from the changes. 鈥淏ig pharma companies have concluded that discovery is more efficient outside than within,鈥� says Steven Burrill, CEO of California-based investment company Burrill & Co, and they are keen to finance discovery through academia again. 杏吧原创s able to cross the academia-industry divide will thrive in this changing landscape, says Kevin Cox, CEO of Imanova, a clinical imaging centre in London set up by GlaxoSmithKline (GSK) but now owned by a group of universities.
Getting personal
Take personalised medicine, where big pharma is particularly keen to collaborate with academia or research institutes because research is risky and the results will not be blockbuster drugs, says Paul Workman of the Institute of Cancer Research in Surrey, UK. 鈥淎cademics and industry have to work together to make sure innovative medicines can be discovered,鈥� he says. 鈥淚t鈥檚 really critical.鈥�
Pharma companies aren鈥檛 the only ones cashing in on outsourcing: even small companies can minimise costs and risks by contracting out work. 鈥淲e spend 50 per cent of our money buying services from other people,鈥� says Phil Boyd, CFO of UK-based biologics company .
By building a biotech 鈥渆cosystem鈥� in which contract research organisations do the most expensive things such as setting up labs and running trials, it is much easier to switch off the tap if a product is failing, says Boyd. This approach has paid off for the company in the shape of top investors, such as GSK鈥檚 venture fund .
Looking to foreign markets is one way to boost a company, with big pharma already capitalising on emerging markets by moving R&D abroad. Smaller companies should build bridges, too, says Panetta. 鈥淚t is difficult, but there are experts they can work with,鈥� he says. These include venture firms who do deals with BRIC countries 鈥� Brazil, Russia, India and China 鈥� as well as organisations such as Biocom, which help them build contacts.
Back home, with competition for funding fiercer than ever, there are other things small biotechs can do to get a piece of the pie. 鈥淪mall companies need to be competitive, and innovative,鈥� says Allison Beattie of the UK鈥檚 partnership. 鈥淚t鈥檚 also about people 鈥� are they easy to work with, can they be flexible?鈥�
In difficult times, it is important not to resist change. 鈥淭he trend is [for] fewer positions in big companies, and more in big pharma and contract research organisations,鈥� says Glyn Edwards, CEO of the Bioindustry Association, the UK鈥檚 trade body for biotechs. 鈥淵our career will involve moving more often but that can be immensely fulfilling.鈥�