Discovering the Perfect Partner

August 23rd, 2013
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This is Part 3 in a series of blog posts on best partnering practices for life sciences and health tech companies. Read the previous posts in the series for Part One, and Part Two.
 
A lesser-known fact about Isaac Newton’s famous quote, “If I have seen a little further it is by standing on the shoulders of Giants,” is that he wrote it to rival scientist Robert Hooke, praising Hooke’s work. As we now take the next steps toward forming strategic partnerships, the application of the quote for us is that help may be found in unexpected places.
 
When we work with clients on partnering strategy, we combine the step of looking for categories (e.g. markets, segments, regions) with the steps of identifying specific companies that may represent attractive potential partners. We often will present the result of this exercise as a matrix, with the categories as columns and the companies as rows. It can look something like this (but may have much more refined categories than this example):  

Remote Patient Monitoring Clinical Diagnostics Specialty Pharmaceuticals
Cardiocom Novartis Mylan
AirStrip BD Teva

 
Following are the specific steps we take in the partner development process:
 
First, find the right markets.
We’ll begin by identifying the obvious categories where we will explore potential partner candidates. These categories of businesses and industries will probably differ from opportunity to opportunity or from client to client. They could be industry segments (like our chart above), but they also could be global geographic regions. Categories could include retailers, distributors, and companies with complementary products (i.e., for whom adding our client’s product could fill out their portfolio).
 
For example, in digital health, a client may have a new way to download and interpret metabolic information. Digital health involves the convergence of multiple industries and disciplines, a characteristic that often results in a greatly expanded view of possible partner categories. In our metabolic data example, categories could include large diagnostics companies making complementary products that want to be one-stop shops for screening or clinical diagnostics, or companies involved in particular diseases for which our client’s innovation would apply. Another category might be organizations/foundations that focus on specific disease areas, and who may see benefits in making the product/service available to their members. Additionally, public health organizations in the U.S. and elsewhere may want to establish a relationship to gain access to our client’s innovation and share it with underserved areas of the world. Pharmaceutical companies could be developing treatments for these diseases, and may be interested in a screening or companion diagnostic link.
 
During this stage we will find the usual suspects of companies and categories for every opportunity. But a key benefit of our team’s different backgrounds, skill sets, and expertise — our multidisciplinary approach — is our ability to conceive and investigate non-obvious relationships and categories, too (like a software or “big data” company, or a retailer who knows how to make slick portable devices). Returning to our matrix, we can fill columns and rows very broadly, pushing the envelope a bit, to get creative – so we don’t omit a category or company that could help our client. We leave no stone unturned.
 
Next: Who you going to call?
The next step is relatively less demanding, now that we’ve narrowed down potential categories and perhaps identified a few companies within each. We’ll look to expand the list of companies or organizations that would populate each category, again including the obvious and not so obvious names. But we still need to rank the list. To do that, we take a broad view of each company’s strategy to predict their likely interest in our client’s product or service. We’ll also perform due diligence, including reviewing recent transactions, public statements, product portfolios, areas of interest, and perhaps most important, the ability to pay. Essentially, we gather as many facts and opinions (e.g., analyst reports) as we can to assess how interested a company should be in our client’s products.
 
The next step(s)? We’ll talk about contacting target companies, and making the deal! To be sure you don’t miss a future post in this series and to learn more about my take on the strategic partnering process, please subscribe to our newsletter and follow us on Twitter. Got a partnering question or challenge? Send me an email – and let’s discuss!


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About the Author:

I co-founded Popper and Company more than ten years ago to help life science companies at all stages of development and of all sizes address inefficiencies in health care. Along with my team members, I focus on helping clients develop and implement strategies that enable the application of technology and processes to improve health care in novel ways, often through the establishment of relationships with industry partners. Click to send me an email.

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