If a growing biotech company wants to succeed, it must create long-term sustainable value.  Everyone wants to partner with large pharmaceutical companies, however, either they do it very early and give away an important part of their long-term value, or they are unable to build all the capabilities on time to allow for their technological value to be noticed.  These partnerships are difficult to manage given the important cultural differences between organizations, so, even though they are a fast way to build value, they very often fail to deliver.

The most reliable   way for a biotech company to become successful is to develop a product that meets a specific need and thus, is bought by many customers. However, getting there is not easy.

Biotech companies normally strive to partner with a pharmaceutical company as a way to validate their technology and ensure financing.  These partnerships possess many benefits, but also pose challenges and disadvantages, namely: an increasing number of biotech companies seeking partnerships; the fact that pharma companies really do not give extra benefits like better R&D effectiveness and only pay royalties for well-defined product candidates; the difficulty of managing such different working cultures; and the fact that the big company always gets the largest portion of the deal because it acts as the technology integrator.

Pharmaceutical companies have proven to be very inefficient in making the fast decisions needed to take advantage of the opportunities at the drug candidate and clinical proof of concept phase of the drug discovery process, a field where biotechs move very fast and where their business approach can better meet the challenges of this phase.

The problem is that biotechs on their own do not possess the range of capabilities needed to keep product rights after Phase IIa or to give an integrated technology solution.  In order to address this, some biotechs decide to join forces with other biotechs that have complementary capabilities.  Although this seems logical and feasible, since both have similar cultures and complementary skills working together on a common purpose, these partnerships have failed in the past.

What happens is that the partnership relationship works well great until the companies have to commit to additional resources to take an initial lead to a drug candidate, and they start discussions to partner with pharma companies.  Then, they start thinking what’s best: to continue the 50:50 partnership that offers no revenue in the short term, or use their resources to join pharma.  Most commonly, they select pharma because this provides for the fastest solution to market.

Nevertheless, biotech-biotech partnerships are very valuable for these companies to hold on to important value by giving pharma what it wants: integrated technology solutions or product candidates with proof of concept clinical data.

In order to achieve biotech-biotech partnering success, it is vital to design a carefully structured arrangement.  It is necessary to look at the relationship throughout phases, and to define responsibilities, deliverables, and resource commitments for the first phase, always considering that something can change, thus, an alternative plan must be established in the agreement.  At the end of each phase each partner must have the opportunity to commit again or leave, with clear terms that should be agreed upon.

The initial agreement should guide the relationship through the other phases, and it must offer a flexible way to identify responsibilities.  Given the fact that new companies change very rapidly, flexibility is crucial.  In truth, the shorter the partnership, the better.  Since both parts have to compromise, every partnership offers aspects of the relationship that are less desirable for each party.  Each company must be able to develop its own interests and path forward, so as to have a better chance of success.  Three worthy models for biotech-biotech partnerships are:

-    Barter model
-    Baton exchange model
-    Draft model

Pharmaceutical consulting firms can provide information and guidance on these three models and how to best apply them given the case.

Through biotechs partnerships, these companies can control their technologies for high value deals by keeping product rights through Phase IIa or by providing an integrated technology solution.  In this way, biotechs can profit from their strengths and move efficiently through drug discovery and early drug development, giving them the space to consider their next step: continue developing the product alone since it will have the financial capability to do it, or consider a partnership with a pharmaceutical company.

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Biotechnology companies are now quite convinced of the advantages of stirred tank disposable bioreactors for their manufacturing. The economics and advantages are so compelling that in a few years we could see the universal use of these equipments in all new production lines. Also, the FDA has accepted now, for more than one year, investigational new drug applications using these new equipments.

Large scale means upwards of forty and up to two-thousand litre working volume ranges and higher, although beyond two-thousand litres, the traditional stainless steel bioreactor is still preferred.

The fully-installed capital cost to put a single-use system, is double that of disposable systems, including utilities. Installation time is one-third in the case of one-use reactors. The need for cleaning validation is eliminated, thus reducing costs even more and improving the opportunity of changeover in facilities that are multiproduct. Stainless steel reactors require many hours of cleaning, lots of water and cleaning products, and agents to be ready to use, which increases production time – and cost.

With time between batches also reduced, the output of a production facility can also be increased, thereby also reducing costs.

In the next decade, the workhorse bioreactor for the industry will be around two-thousand litres and not 10,000 to 20,000 litres, as it currently stands. Drugs are becoming more potent and niche markets are becoming smaller, which requires more specific, productive, and efficient processes. Disposable technology makes drug development in niche markets much more economical, since a major hurdle in the development of these personalized drugs is precisely the smaller size of the niche and thus the difficult justification of an investment by a manufacturer.

In short, both development and manufacturing of bio products using single-use technology is more economical when we look at the trend taking hold, where products are more focused and go to smaller and smaller niche markets.