IBM Study Suggests Bio-Alliances Needed for Success

A new study conducted by IBM and Silico Research showed that biopharmaceutical companies that do not partner or collaborate with other companies, risk delays in the production of new medicines, medical devices, diagnostics and support services. “The Industry is at risk of delaying new targeted treatment solutions if biopharmaceutical companies do not collaborate more effectively,” said Guy Lefever, who leads IBM’s Global Life Sciences practice.

The survey, An Imperfect Harmony: Alliances within the life sciences industry, suggests that while the number of alliances between larger and smaller life-sciences companies has increased over the past decade, the ability to work together effectively and produce new drugs has not been achieved. According to the study, 55% of life sciences chief executives surveyed do not plan to partner extensively during the next three years, and although many large biopharma companies have the strength to collaborate, they fail to act.

The study indicates that many large life-sciences companies have made only 3-4% improvements in their abilities to find new partners, negotiate terms, and manage alliances established during the past two years. It also suggests that companies must attract the best scientists, develop targeted treatments and services for specific disease pathologies, and move into new or emerging markets, and that collaborations are the way to achieve this.

The IBM study revealed some of the factors that drive a company to partner, and notes that size is not one of them. Larger companies do not always dictate the terms of alliances and smaller companies with promising molecules can often call the shots. Development expertise and overall reputation are among the top factors involved in partnering decisions according to the study. Scientific expertise ranks only eighth on the list of factors, primarily because most companies believe they have a strong background in research.

A sign that Biopharma partnering is maturing is the growing use of co-promotion and equity arrangements. According to IBM, almost half of biopharmaceutical companies are now using risk-sharing arrangements to finance the development of new medicines. Companies have adopted new business models for developing products using different partners at different stages in the R&D process. For example, Debiopharma in-licenses the molecules it develops and registers them before out-licensing for sales and marketing.

Also, many large firms are expanding their links with academia and adopting a more strategic approach to such alliances. Rather than using academic medical centers to design and conduct clinical trials, pharmaceutical companies are now commissioning university scientists to solve specific research problems in areas of mutual interest.

For more information on An Imperfect Harmony: Alliances within the life sciences industry, visit www-935.ibm.com/services/us/index.wss/ibvstudy/gbs/a1030772