Getting the most of your international strategic alliance by maximizing your partner\'s resources.

1. GETTING THE MOST OF YOUR
ALLIANCE INTERNATIONALLY BY
MAXIMIZING YOUR PARTNER’S
RESOURCES
Pharmaceutical Licensing Partnerships and Alliance Management Conference
July 18-19, 2011
Philadelphia, PA
Daisy Rivera-Muzzio, R Ph, MS, MBA
Managing Partner,
DRM BioPharmSource

2. Introduction
Alliances between small players (biotech, academia, small companies) and big
pharma have been driving the innovation in the biopharma industry for years.
Small companies / inventors aspire to be acquired by big pharma to leverage
its financial, regulatory and commercial capabilities to market the inventions and
maximize their value.
The current partnering landscape has become increasingly competitive. Both sell
and buy side experience an intense pressure to be selected as the partner of
choice. An effective partnership requires the understanding of each other’s
perspective. The value of the initiative goes above and beyond the financial
transaction and could bring learning and growing opportunities.
International alliances brings additional dimensions if both partners are willing
to be creative in the deal structure leveraging each other core competencies.
July 18-19, 2011|DRM BioPharmSource

3. Overview
¨ Sell and Buy Side expectations/ perspectives
¨ How to address the gaps, leveraging partner’s
resources
¨ Considerations to maximize the partnership
July 18-19, 2011|DRM BioPharmSource

4. Rational for Partnership:
Mutual Benefit : Incremental Value
Drivers for collaboration :
¨ Buy Side : Big Pharma
¤ High Value, fast speed, low cost innovation to fill the gaps of their pipeline
n Buy side is continuing to increasing its emphasis on late stage deals, shorter term revenues
and lowered risk
n Partners selection based on institutionalized due diligence process for risk assessment. A
seamless product introduction and reliable quality and supply as if the product is developed/
manufactured internally
¨ Sell Side : Small Bio-tech/Start ups/Academia
¤ Commercial ( Sales, Marketing, P &R) Regulatory Capabilities, to market its invention and
maximize its value
n Partners who can clearly demonstrate a credible value maximization, solid capabilities, risk
sharing and creativity in deal structures.
¤ Financial Resources
n Sell Side, struggling with the balancing act of raising capital and the challenges to get
regulatory approval may choose as a best alternative partnering/ selling out to cash rich big
pharma
¤ Development of additional capabilities
July 18-19, 2011|DRM BioPharmSource

5. What each partner brings to the table
Small Companies Big Pharma
Restless / Results oriented Reliable Business Process
Unconventional/ Entrepreneurs Global Regulatory and Commercial Strengths
Risk affined Calculated risks
Innovation minded Global Manufacturing Network Capabilities
Flexible, adaptable Pursue differentiation as a competitive advantage
External Funding Dependent High Financial resources
Broad Network of Collaborators Established Business Process, Logistics, Supply Chain
July 18-19, 2011|DRM BioPharmSource

6. What a partner continues to look for - value creation
(Sell Side Companies Perspective)

7. Synergies and Gaps
¨ There is synergy between the expectations of the sell side and
the strategies of the buy side on :
¤ SellSide looks to complement the Regulatory and Commercial
capabilities they are lacking
¤ Big Pharma continues to strengthen their commercial and regulatory
capabilities.
¤ Deal structure considers expanded roles for licensors
¨ GAPS: Both Sell side and Buy side Outsource R&D and Mfg.
which may increase the risk of the initiative
¤ Big Pharma has increased the outsourcing of R&D and
Manufacturing, placing more emphasis in selection of CMO’s and
supportive entities for product development.
n Sell side could enable Buy Side resources to address this potential risk
July 18-19, 2011|DRM BioPharmSource

8. How to address the gaps leveraging the partner’s
resources?
¨ Seek for synergistic/complimentary/ reliable partnerships in earlier stages
¤ Value Chain of Key players: CMOs/ Academia/CROs/others small to mid-size companies
¨ Considerations
¤ CMO’s - Highly reputable, reliable quality and supply (Patheon, Catalent, DSM, Lonza,
etc.)
n Using the partner’s network of strategic suppliers and global external supply resources
n Incentives
n Small company: De-risk due diligence process
n CMO: Commitment to M&S
¤ Academia- Low Cost, great reservoir of expertise
n Leverage on Pharma and Academia and Regulatory Agencies joint initiatives ( ex. Rutgers
University -NSF Engineering Research Center on Structured Organic Particulate Systems
n Overcome the IP disputes that delays opportunities for collaboration
¤ CRO’s : Cost and Risk management of clinical studies
n Low Cost locations- Highly reputable CRO’s used by big Pharma
n Use of technology to predict rate of success of clinical studies
§ BioVista
§ Absorption Systems

9. Contract Manufacturing Organizations
July 18-19, 2011|DRM BioPharmSource

10. Reputation:
DSM and DSM Pharma are recognized for Innovation and Sustainability
2010 Dow Jones Sustainability World Index
DSM #1 in the Global Chemical Industry 5 of 7 years
DSM recognized June 2011 by Patent Board in the top ten (of 167) most innovative chemical firms
due to ‘research intensity and industry impact’
DSM Pharma received:
¨ Profiles in Sustainability Award 2011 for Green Innovation
¨ European Outsourcing Award 2010 for carbon footprint reduction
¨ Profiles in Sustainability Award 2010 for Green Chemistry Toolbox
¨ Safe Bridge Certification for handling of potent compounds
Good Corporate Citizenship
Endorse obligations in the chemical industry’s
International Responsible Care® Program
July 18-19, 2011|DRM BioPharmSource

11. Vertical integration:
DSM is a Leading Global Provider of Custom Manufacturing and
Development Services for the Nutritional, Consumer and Biopharma
businesses
Pharma Chemicals Dosage Forms Biologics
• DPC: Custom manufacturing of • DPI: Secondary manufacturing of • DSMB: Custom manufacturing of
API and Intermediates of sterile injectables, non-sterile biopharmaceutical ingredients
• Broad technology toolbox for liquids, and oral dosage forms • Leaders in innovative process
process innovation and • Experts in technology transfer technology
commercial manufacture projects
July 18-19, 2011|DRM BioPharmSource

12. Academia
July 18-19, 2011|DRM BioPharmSource

13. Partnership with Academia
¨ Universities can be great partners: Great reservoirs of expertise at a lower cost
- Extensive instrumentation and modeling methodologies
- Inexpensive, highly trained labor (Graduate Students and postdocs)
- Forum for collaboration between Pharma and Regulatory Agencies
¨ To maximize these positives:
- Overcome struggles about IP:
- Restrict the scope of the university contract to roles that are not likely to generate IP: perform
measurements, obtain access to instrumentation, generate data, provide analytical services, etc.
Such services can be accessed through "service agreements” that are much faster to negotiate
and do not compromise IP
- For scientific support, retain the academic as a consultant.
- Students, once they graduate, are excellent recruits that already know the company –
and the company has a chance to get to know them while they work on company-
sponsored projects
July 18-19, 2011|DRM BioPharmSource

14. Partnership with Academia
Resources of Big Pharma are dedicated to sponsor industry driven
¨
research:
¤ Drug discovery
¤ Drug Delivery
¤ Quality by Design and Process Analytical Technologies
¤ Support for product/process development
¤ Participation in research consortia and centers
Big Pharma often builds long-term alliances with academic institutions
¨
of interest
¤ Eli-Lilly
foundation $20 million gift to Purdue University to establish a center of excellence in
pharmaceutical sciences
¤ Novartis $65 million award to MIT to develop continuous manufacturing technology
¤ J&J long term “partnership for innovation” with Rutgers in drug discovery
¤ Most Big Pharma-Rutgers University -NSF Engineering Research Center on Structured
Organic Particulate Systems

15. Contract Research Organizations
Innovative technologies to enable
early decision making, reduce the cost
and risk of clinical studies
July 18-19, 2011|DRM BioPharmSource

16. Absorption Systems:
A Comprehensive Preclinical CRO offering
Toxicology Services
Innovative research tools and services to better predict human outcomes
Lead
Candidate
Toxicology
&
FTIH
to
OpJmizaJon
SelecJon
Safety
Phase
II
Biowaiver
of
Human
Studies
Human
Bioequivalence
Study
•
Clinical
Drug-­‐Drug
InteracJon
Studies
•
Significant
savings
in
development
Jme
BA/BE
Clinical
DDI
Cost
Comparison
Human
BE
study
In
vitro
study:
≈$50k
In
vivo
human
BE
study:
≈$250k
Clinical
DDI
study
Discover
Clarity
in
Transporters:
In
vitro
study:
≈$100k
to
assess
CellPort
Technologies®
mulJple
interacJons
(
transporters
Class
I
&
Class
III=61%
of
classified
drugs
and
CYPs)
FDA/EMA
experience
In
vivo
study:
≈$100k
to
1M
Projected
savings
of
biowaivers
for
all
Enabling
waiver
of
clinical
DDI
depending
on
number
of
Class
I
&
Class
III
≈$128M
to
150M
studies
interacJons
Absorption Systems Exton, PA US; Asia Sapporo, Hokkaido, Japan ; Western US -San Diego, CA
www. Absorption.com

17. BioVista
¨ COSS™ is a proprietary very large scale profiling technology specifically
developed to address the need for pipeline value enhancement and
improved patient cohort stratification.
¨ It uses very large scale mechanism of action (M o A) profiling to generate
four solutions:
¤ Find novel indications for any drug, beyond the ones they were initially
developed for
¤ Identify novel, mature chemistries against targets and mechanisms
¤ Identify new biology and novel targets for diseases of interest
¤ Develop M o A- based patient cohort stratification and inclusion /exclusion
criteria that may be used in RMPs by profiling M o A of AE’s of any drug
prior to or during clinical trials
¨ The technology helps prioritize and “kill” programs with elevated risks of
MoA based attrition due to Safety or efficacy
BioVista- SA Charlottesville, VA USA ; EU Ellinikon, Athens, GREECE
info@biovista.com

18. Partnership Value Creation
July 18-19, 2011|DRM BioPharmSource

19. Maximization of Value Creation through
Partnership ( Sell Side)
Buy-Side Resources increase the value to the Sell Side
¨
Partner
• Commercial and Regulatory Global outreach
• Established business process
• Access to a global network of external suppliers already
qualified
• Economies of scale through strategic CMO’s partnerships
• Reliable Supply Chain and Logistic Process
• Sponsored Academic research
• In house resources to International partners to monitor and
July 18-19, 2011|DRM
control Quality and EHS controls BioPharmSource

20. Terms and Conditions to Provide
Growth Opportunities to Sell Side
¤ Retain responsibilities for worldwide
technical support
¤ Retain commercial rights for strategic
markets
• Build its own sales force
• Seek local markets partnerships
¤ Co-marketing opportunities, synergies
between both partners portfolio
July 18-19, 2011|DRM BioPharmSource

21. Buy Side - Alliances with local players
in International Markets offer
¨ The potential to leverage local market partner’s
resources:
¤ Untapped science resources in newer markets…
n India – Cardiovascular work, clinical study data gathering and
analysis
n China – Chemistry, Chemical intermediates
n Eastern Europe - Clinical Research
n Latin America- Biotech, Clinical studies
¤ Treating diseases found primarily in newer markets
¨ Strong local network: political/ regulatory/
commercial
July 18-19, 2011|DRM BioPharmSource

22. In summary
¨ Resources of Big Pharma enhance the value of the strategic
partnership:
¤ Providing complimentary capabilities
¤ Enabling the use of a network of qualified collaborators
¤ Providing Access to global markets
¨ Big Pharma could also benefit from alliances with local
markets partners unique resources and competitive
advantage in international markets
¨ Each partner’s definition of value and expectations lay the
basis for creative deal structures to achieve mutual benefit
July 18-19, 2011|DRM BioPharmSource