By Scott Shaunessy, CEO of ideaPoint
The Pharmaceutical industry has always been a leader in partnering with academia, start-ups, biotechs and other large pharmaceutical companies to research, develop, distribute and resell lifesaving medicines worldwide. They have been doing this with great success and double-digit growth for over 50 years, and other industries are (finally) starting to take notice. The pharma industry has always taken the approach that “not invented here” should not be an obstacle in finding new novel approaches to human and animal healthcare.
At a recent Innovation Conference in London, I heard one of the speakers, who came from a Global Fortune 1,000 company in the consumer products industry, say, “Most good ideas don’t come from inside the company.” This is a dramatic shift from just a few years ago when some non-pharma companies finally admitted that “Not all good ideas come from inside the company.” Other industries are finally coming to realize what pharma realized many years ago. In fact, our client Merck, the US based Global Pharmaceutical giant, has stated that in 2016, approximately 60 percent of human health revenue at Merck was attributable to alliance/acquisition products and patents.
Global companies like Merck have become large commercialization engines. They have the manufacturing, regulatory affairs, distribution, marketing and sales machine all revved-up in nearly every region of the world, and they need fuel to keep that machine running. That fuel is new products and services and they cannot possibly feed the machine with purely their own R&D organization. It is too slow, too expensive, too risky and the market and their shareholders simply won’t let them. So, they must turn to partnerships with other companies and researchers all over the world.
Here are the top 3 ways that other industries can learn from the pharmaceutical industry and adopt their practices to achieve their own success.
- License other products and market/sell them as your own- If you have a particular strength in a particular region of the world and already have all the pieces in place to launch, market and sell products of a specific type in a specific region of the world, then leverage that by entering into license or royalty agreements with other companies (even your competitors), to sell those products in that region, thereby leveraging your strengths. It is a “win-win” for everyone. For example, our client GlaxoSmithKline (GSK), announced earlier today (July 24, 2018) that they had entered into a long-term agreement with Adaptimmune Therapeutics, to use Adaptimmune’s novel T-cell Receptor therapy to treat cancer. In this case, GSK gives their Immuno-oncology Portfolio a huge boost, while giving Adaptimmune a $27.5 million up-front payment that will greatly enhance their efforts to focus on the development of more pioneering cancer therapies. Adaptimmune did not have the resources to take this novel therapy to market at the pace that the world and the markets demand, while GSK does have those resources but needed novel new therapies to enhance its vast portfolio of products. This is truly a “win-win” for both companies.
- Work with academia for early-stage research- The Pharmaceutical industry has been sponsoring university research in their areas of interest for years. Many great new products and new companies have spawned from university research. University researchers are not bound by the same physical or ideological constraints as large companies- they can be free to innovate, no silos, no reporting structure, no departmental budget constraints, no worries about career pathing. But researchers at universities do have limits on budget and resources. Industry should leverage the innovative nature of Academic Researchers and partner with academia to leverage their strengths where you might be weak by offering to add value where you are strong. For example, in addition to funding, a company could provide expertise in helping bringing ideas born in the lab to market and helping make them commercially viable. You could provide access to your top scientists who understand the nuances of taking products to market. You could also provide access to your laboratories, which often are much more high-tech compared to what is available at many university research labs.
- Sharing is innovating– My company helps support a pharmaceutical and academic industry consortium called Clinical Study Data Request (CSDR for short). The 15 pharmaceutical companies and four non-profit funders of research that comprise CSDR, are inspired to drive scientific innovation and improve medical care by facilitating access to patient level data from clinical studies that they sponsored in the past by giving researchers access to combined data pools and allowing them to discover outcomes which could advance science and medicine. An example of industry sharing include material transfers which give access to raw compounds that independent or academic researchers can use in their research. This may lead to new therapies not yet explored, as is the case with our client ViiV Healthcare, a company dedicated to HIV medicines and research focused on people affected by HIV/AIDS. Giving grants and access to medicines, allows doctors to run independent clinical studies called an “Investigator Initiated Study,” that can explore alternative or investigational uses of medicines already on the market or still in development by a pharmaceutical or biotech company.
I heard one of our clients mention at a recent symposium that industry needs to have the “humility to co-create.” The pharmaceutical industry has shown that by looking outside of their physical and figurative walls and not being afraid to share and support research with academia, they have prospered immensely through the years. Other verticals have finally taken notice and we see an emerging trend developing in some adjacent industries. Hopefully, more will notice.
As the giant companies continue to get bigger through acquisition, in most cases, they are no longer as innovative as they may have once been. Small companies, start-ups, and academics can provide tremendous value by providing the breakthrough innovation that the giants can then take to the world.
Scott is the Founder and CEO of ideaPoint and has over 25 years of experience as an executive in both Business-to-Business and Consumer-facing businesses and is an expert in best practices for Innovation, Business Development, Licensing and R&D Collaboration processes in the Pharmaceutical, Medical Device, Biotech, Nutrition, Healthcare and Consumer Products industries. Before his management career, Scott spent eight years as a professional hockey player in the National Hockey League and American Hockey League.