spi usa, inc. 4,5/4,5 cm introducing a way of thinking about the process of partnering asking the...
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SPI USA, Inc.
4,5/4,5 CM 4,5/4,5 CM 4,5/4,5 CM 4,5/4,5 CM
Introducing a Way of Thinking About the Process of Partnering
Asking the right questions
By Elia Cossis
Your Partner for Innovation
SPI USA, Inc.5523 Research Park Drive, Suite 325Baltimore, MD 21225Phone: 443.543.5530E-mail: [email protected]
Introducing a Way of Thinking About the Process of Partnering
Partnerships
Partnership building needs to be among the core competencies of any company that wants to grow
There are 11 basic steps for navigating the twists and turns of partnering
• These steps are not in lockstep
Introducing a Way of Thinking About the Process of Partnering
Step 1: Ask: What Do I want?
Step 1: Ask: What Do I Want?
Is it to:
Leverage intellectual property?
Bring strategic, operational and financial benefits?
Enhance access to technologies?
Reducing investment exposure?
Increase R&D funding?
Commercializing products or technologies?
Introducing a Way of Thinking About the Process of Partnering
Step 2: Don’t Forget Your Strategic Plan
Step 2: Don’t Forget Your Strategic Plan
Once the basic questions are asked in step 1, the temptation will be to move straight to researching potential partners. But several steps must come first
First review your strategic plan and analyze how partnering fits into it
What are the goals and plans you have set for your company?
Will partnering advance them?
Are there elements of a potential deal that under the strategic plan are non-negotiable?
Are they realistic?
In some cases, simply contemplating a possible partnership will lead companies to reconsider their basic business strategies
Introducing a Way of Thinking About the Process of Partnering
Step 2: Don’t Forget Your Strategic Plan [cont.]
Step 2: Don’t Forget Your Strategic Plan [cont.]
Once you’ve figured out how a partnership fits with your strategic plan, the next objective should be to develop a partnering strategy
A well planned and executed strategy will include a thorough assessment of the commercialization potential of the partnership and development of the available strategic positioning options
Remember: The important goal isn’t to make a partnership. The important goal is to advance the business.
Introducing a Way of Thinking About the Process of Partnering
Step 3: Develop and IP Management Strategy
Step 3: Develop and IP Management Strategy
In most cases, the core of a partnership is allowing another company to have some level of access to your intellectual property (IP)
It will be essential to have a system in place to monitor the use of IP and track licensing, royalties, and collaboration projects
The best time to develop an IP management strategy and the necessary infrastructure is at the beginning of the partnership process
Introducing a Way of Thinking About the Process of Partnering
Step 4: Assess the Commercialization Potential
Step 4: Assess the Commercialization Potential
Once a plan is developed to manage the portfolio of IP, the commercialization potential of the IP must be determined
You must evaluate internal and external factors. For example:
External factors include:
Market need
Market size
Market competitors
Internal factors include:
Development potential
Allocation of resources
Probability of success estimates based on historical programs
Introducing a Way of Thinking About the Process of Partnering
Step 5: Evaluate Your Portfolio
Step 5: Evaluate Your Portfolio
Once the commercial value of a particular asset/program/IP is understood, its position relative to the broader IP portfolio should be evaluated
Understanding the strategic position within the portfolio will help to prioritize individual programs objectively, and best utilize partnering/licensing resources in a constrained environment
Strategic positioning options should be ranked, and relative strengths, weaknesses, opportunities and threats assigned to each asset/program/IP
Introducing a Way of Thinking About the Process of Partnering
Step 6: Gather and Analyze Data
Step 6: Gather and Analyze Data
Once the IP positioning is complete, careful data-gathering and analysis should occur, in order to understand the financial, strategic and operation value to a potential partner
Key things to look at are:
• Customer adoption
• Target pricing
• SWOT analysis
• Anticipated revenue
• Profitability and Net Present Value under various partnership models
• Assessment of the impact on the potential partner’s financials
Introducing a Way of Thinking About the Process of Partnering
Step 7: Identify and Prioritize Key Partners
Step 7: Identify and Prioritize Key Partners
Once the IP is positioned and analyzed, valued potential partners should be identified and prioritized
The first round of research usually turns up a large pool of potential candidates. After a more structured screening and selection process a large number of the initial companies identified are a loose fit
Factors that go into screening include critical factors such as:
• Past experience commercializing and marketing products
• Particular areas of technology
• Past level of commitment to other alliances and/or partnerships
• Financial records
Introducing a Way of Thinking About the Process of Partnering
Step 7: Identify and Prioritize Key Partners [cont.]
Step 7: Identify and Prioritize Key Partners [cont.]
Next, a contact strategy should be created
This involves creating a communications and marketing plan to effectively approach key contacts at the companies
Factors including corporate culture, introductory position, and approach should be considered before initiating contact with potential partners
Introducing a Way of Thinking About the Process of Partnering
Step 8: Develop Presentation Collateral
Step 8: Develop Presentation Collateral
Presentation collateral is a key component of the partnering process that serves to introduce both the partnering opportunity and the organization
A non-confidential business development brief is typically created to introduce the partnering opportunity, product/technology, and organization soliciting the business partnership
PowerPoint presentations called “Pitch Books” are typically prepared to present the product/technology, the partners involved, the rationale for the partnership and terms of agreement
Introducing a Way of Thinking About the Process of Partnering
Step 9: Assess Commercial Interest and Attractiveness
Step 9: Assess Commercial Interest and Attractiveness
With the marketing tools prepared, the next step is to initiate initial contact with the identified partners
Initial contact can be made via phone, email, mail, or through in-person appointments
In the initial presentation, the pitch book is presented, whereby the value proposition and alignment of intellectual property with commercial potential is made
Both parties then evaluate the attractiveness and feasibility of the partnership
Evaluate a preliminary go/no go decision
Introducing a Way of Thinking About the Process of Partnering
Step 10: Finalize the Partnership Model
Step 10: Finalize the Partnership Model
The first steps involve a period of in-depth valuation. At this stage, preliminary forecasts of financial returns from the commercialization partnership are prepared
Forecast valuation analyses of the technology or product are finalized, and a period of active due diligence is initiated
Provided the due diligence process moves to a partnership stage, final arrangements are made to finalize details and establish a partnership
Introducing a Way of Thinking About the Process of Partnering
Step 11: Understanding Partnering Option
Step 11: Understand Partnering Options
There are several types of partnership options. They include:
1. Collaborative Marketing
2. Licensing Agreement
3. Collaborative Development
4. Minority Investment
5. Joint Venture
6. Merger/Acquisition
Introducing a Way of Thinking About the Process of Partnering
Step 11: Understanding Partnering Option [cont.]
Introducing a Way of Thinking About the Process of Partnering
Review
Review:
1. Ask: What do I want?
2. Don’t forget your strategic plan
3. Develop and IP management strategy
4. Assess the commercialization potential
5. Evaluate your portfolio
6. Gather and analyze data
7. Identify and prioritize key partners
8. Develop presentation materials
9. Assess commercial interest and attractiveness
10. Finalize the partnership model
11. Understand partnership options
Introducing a Way of Thinking About the Process of Partnering
Reference
Biopartnerships magazine. October 2005 issue. Pages 18-23
Introducing a Way of Thinking About the Process of Partnering
USA Inc.
5523 Research Park Dr., Suite 325
Baltimore, MD 21228
Tel: +1 443 543 5530
Fax: +1 443 543 5533
www.usaspi.com
SPI USA Contact Information
California
USA – Irvine 2102 Business Center Drive, Suite
220E
Irvine, CA 92612
Tel: +1 949 253 5702
Fax: +1 949 253 5703
Baltimore