Building Effective Pharma Business Development

Pharmaceutical business development is the key to innovation and revenue growth at a time of fast-increasing scientific advancements and, coincidentally, the expiration of many blockbuster medication patents. While internal pipelines and assets can provide some innovation and new income, most organizations' business development teams are under great pressure to augment internal efforts with external licensing deals and M&A. Unfortunately, those teams are typically unable to provide the transactions required for growth and innovation. 

The fact that senior team members are not fully unified on the role of business development in accomplishing the company's strategic aims is frequently cited as a primary factor for this deficit- Martin Thuna.  In theory, they may agree that business development should explore partnerships, ecosystems, and collaborations, but that agreement breaks down when it comes to making judgments about individual agreements.

Determine the importance of business development to the organization

Executive team members frequently disagree on how to prioritize business units, technological areas, and technology platforms, as well as what sorts of agreements to pursue (early- versus late-stage R&D deals, for example, or transformative versus tuck-in acquisitions). To establish alignment, team members must agree on how and where they wish to produce value. Will they employ business development to produce immediate money or to create a pipeline for future innovation? 

Develop contacts with potential prospects

Executive teams should make a two- or three-year commitment to cultivating connections with potential partners or acquisition candidates. Proactive sourcing, screening, and relationship development are considerably superior to just showing up to the target's headquarters with a banker and an offer for transaction execution. A pre-existing connection will provide a potential buyer an advantage over other bids, sometimes even pre-empting the bidding process entirely.

Agree on how to evaluate value

The identical transaction may appear stunningly appealing or extraordinarily unfavorable depending on one's assumptions when appraising a target. As a result, teams must agree on how they will value all components of each transaction and then apply that valuation with discipline. Too frequently, businesses find up repeating their analyses and making the same decisions again and over because they didn't agree on valuation methodologies or KPIs from the outset- Martin Thuna.