Business Development: Accelerating the Deal

This publication has been discontinued on June 1, 2011.

Introduction

Abstract

Close key deals and build a top-flight business development team:

Deal-making is an established strategy for filling company pipelines, raising cash, expanding portfolios and driving long-term revenue. Whether companies forge straightforward licensing agreements or long-term alliances, organizations across the industry depend on other firms' discovery, development and marketing capabilities to reach a range of different objectives.

Use this report to perfect your team' s approach to different elements of the deal-making process. Explore primary data and read other executives' perspectives for a comprehensive look at current business development challenges:

• Align deal making with company and therapeutic franchise strategies
• Win competitive funding and staffing
• Streamline due diligence, early deal evaluation and negotiation
• Build cross-functional excitement for new deals
• Identify red flags and watch for stumbling blocks to deal success

Table of Contents

Charts and Graphics

EXECUTIVE SUMMARY

• Figure E.1:Deal-Making Challenges
• Figure E.2: Business Development Annual Budgets: Companies With Budgets Greater Than $1 Million
• Figure E.3: Company G: Identification for Therapeutic Areas Covered by General Business Development
• Figure E.4: Company O: Decision-Making Process

BUSINESS DEVELOPMENT BUDGETS, STRUCTURE AND STRATEGY

• Figure 1.1: Centralization of Business Development Functions
• Figure 1.2: Business Development Annual Budgets: Companies with Budgets Less Than $1 Million

Business Development Budgets

• Figure 1.3: Business Development Annual Budgets: Companies with Budgets Greater Than $1 Million

Business Development and Licensing Structure

• Figure 1.4: Business Development Staffing: Companies With 10 or More FTEs
• Figure 1.5: Business Development Staffing: Companies With Fewer Than 10 FTEs
• Figure 1.6: Company L' s Business Development Structure
• Figure 1.7: Company M' s Split System
• Figure 1.8: Company L' s Small BU Business Development Reporting Relationships
• Figure 1.9: Company O' s BD&L Structure
• Figure 1.10: Company Q' s Structure
• Figure 1.11: Company L' s Primary Care BD&L Function
• Figure 1.12: Company L' s BD&L Finance Team
• Figure 1.13: Reasons for Pursuing New Deals

Business Development Strategy

• Figure 1.14: Licensing Enters the Pipeline
• Figure 1.15: Phases in Which Companies Focus for In-Licensing Deals
• Figure 1.16: Phases in Which Companies Focus for Out-Licensing Deals
• Figure 1.17: Phases in Which Companies Focus for Inbound, Co-Development Deals
• Figure 1.18: Phases in Which Companies Focus for Outbound, Co-Development Deals
• Figure 1.19: Phases in Which Companies Focus for Inbound, Co-Promotion Deals
• Figure 1.20: Phases in Which Companies Focus for Outbound, Co-Promotion Deals
• Figure 1.21: Company T' s Licensing Strategy Structure

OPPORTUNITY IDENTIFICATION AND EVALUATION

• Figure 2.1: Structure of Deal Identification Process
• Figure 2.2: Deal Challenges: Deal Identification and Evaluation
• Figure 2.3: Deal Challenges: Identifying Deal Opportunities (by Company)
• Figure 2.4: Deal Challenges: Establishing Partner Relationships (by Company)
• Figure 2.5: Company M' s Basic Market Assessment
• Figure 2.6: Company O' s Identification Process
• Figure 2.7: Company G: Identification Structure for Therapeutic Areas Covered by General Business Development
• Figure 2.8: Company G: Identification Structure for Therapeutic Areas Covered by Therapeutically Aligned BD

Best Practices

• Figure 2.9: Company P' s Alliance Review Process

The Deal Identification and Evaluation Process

• Figure 2.10: Company O' s Decision-Making Process

DUE DILIGENCE

• Figure 3.1: Deal Challenges: Due Diligence
• Figure 3.2: Master Due Diligence Model
• Figure 3.3: Warning Signs

Goals and Investments

• Figure 3.4: Duration of Due Diligence
• Figure 3.5: Due Diligence Investment
• Figure 3.6: Company G' s Due Diligence Considerations

Cooperation in Due Diligence

• Figure 3.7: Business Development Staffing By Deal Stage: Companies With Up to 10 Cumulative FTEs

Cross-Functional Involvement

• Figure 3.8: Business Development Staffing By Deal Stage: Companies With More Than 10 Cumulative FTEs
• Figure 3.9: Inbound Deals: Functions Involved in Due Diligence
• Figure 3.10: Outbound Deals: Functions Involved in Due Diligence
• Figure 3.11: Prevalence of Tools Used to Estimate Potential ROI

Deal Negotiation and Finalization

• Figure 4.1: Deal Challenges
• Figure 4.2: Business Development Staffing By Deal Stage: Companies With Up to 10 Cumulative FTEs
• Figure 4.3: Business Development Staffing By Deal Stage: Companies With More Than 10 Cumulative FTEs
• Figure 4.4: Inbound Deals: Functions Involved in Deal Negotiation/Finalization
• Figure 4.5: Outbound Deals: Functions Involved in Deal Negotiation/Finalization

BUSINESS DEVELOPMENT DEAL PROFILES

9 Deal Profiles that Contain the Following Data Points:

Deal Background

• Type of Deal
• Number of Bids Solicited
• Anticipated Peak Annual Sales
• Groups Involved in Steps of Deal-Making Process

Timing and Decision-Making

• Investment in Deal-Making Process
• Time to Complete Due Diligence
• Average Cost of Due Diligence
• Division of Control for Clinical Development and Marketing Decisions

Finances and Key Challenge

• Royalty Percentage
• Milestone Payment Triggers
• Key Challenge to Deal Success

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