beyond the business plan - managing unexpected risks in biotechnology business development
DESCRIPTION
An case-based overview of unexpected risks encountered in biotechnology entrepreneurship, and guidance on developing business plans to accommodate these risks.TRANSCRIPT
Beyond the Business PlanBeyond the Business Plan
• To accompany To accompany Building Biotechnology Building Biotechnology ISBN 9780973467666ISBN 9780973467666
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For more information:Yali Friedman, Ph.D.
Beyond the Business Beyond the Business PlanPlan
Managing unexpected risks in Managing unexpected risks in biotechnology business developmentbiotechnology business development
Yali Friedman, Ph.D. – [email protected]
Beyond the Business PlanBeyond the Business Plan
A good business plan will define company A good business plan will define company objectives and the path to achieving objectives and the path to achieving
them,them,
but...but...
How do you deal with unexpected risk?How do you deal with unexpected risk?
Business risksBusiness risksBusiness risksBusiness risks
Reaching markets• Freedom to operate• Manufacturing problems
Post-launch• If you build it, they might not come• Market size estimates• Off label-use
General management• With partners like these, who needs
competitors?• Shareholder / board activism
Reaching markets• Freedom to operate• Manufacturing problems
Post-launch• If you build it, they might not come• Market size estimates• Off label-use
General management• With partners like these, who needs
competitors?• Shareholder / board activism
Freedom to operateFreedom to operate
Do other’s patents restrict your business?Do other’s patents restrict your business?• Upstream patents may impede your ability to practice your Upstream patents may impede your ability to practice your
invention, or prevent customers from using itinvention, or prevent customers from using it• E.g. patents on drug formulation or on technology required to use a E.g. patents on drug formulation or on technology required to use a
drug/medical devicedrug/medical device
• Blocking patents may restrict which markets you can serveBlocking patents may restrict which markets you can serve• E.g. patents for specific applicationsE.g. patents for specific applications
What are your options?What are your options?• Design around patentsDesign around patents• License patentsLicense patents• Challenge patentsChallenge patents• Wait for patents to expireWait for patents to expire
BUILDING BIOTECHNOLOGY Chp 7, p. 267
Amgen v. Transkaryotic: Amgen v. Transkaryotic:
Amgen’s EpogenAmgen’s Epogen• First billion-dollar biotechnology drugFirst billion-dollar biotechnology drug• Produced by introducing human genes into hamster cellsProduced by introducing human genes into hamster cells
Transkaryotic Therapies’ Transkaryotic Therapies’ (since acquired by Shire)(since acquired by Shire) Dynepo Dynepo• Stimulates expression of the existing erythropoietin gene Stimulates expression of the existing erythropoietin gene
in cultured human cellsin cultured human cells
Strategic patentingStrategic patenting• Amgen convinces court that Dynepo infringes on Epogen Amgen convinces court that Dynepo infringes on Epogen
patentspatents
BUILDING BIOTECHNOLOGY p. 120
Monsanto hit by submarine patentMonsanto hit by submarine patent
BST (bovine somatotropin)BST (bovine somatotropin)• Increases milk production in cows by 8 to 12 pounds a dayIncreases milk production in cows by 8 to 12 pounds a day
University of California obtains BST patents in 2001 and 2003University of California obtains BST patents in 2001 and 2003
• Patents filed in 1990, based on patents dating back to 1980Patents filed in 1990, based on patents dating back to 1980• Patents describe DNA sequence coding for BST and an expression Patents describe DNA sequence coding for BST and an expression
system to produce the hormone.system to produce the hormone.
• Monsanto introduced BST in 1994Monsanto introduced BST in 1994• Monsanto forced to license patents, or stop selling BSTMonsanto forced to license patents, or stop selling BST
Estimated cost: $185 millionEstimated cost: $185 million
BUILDING BIOTECHNOLOGY p. 126
Manufacturing problemsManufacturing problems
Chiron’s flu vaccine – Chiron’s flu vaccine – It’s your own faultIt’s your own fault• Failure to adequately address contamination problems leads to loss of licenseFailure to adequately address contamination problems leads to loss of license• Far-reaching effects – 50% of U.S. vaccine supply came from Chiron’s plantFar-reaching effects – 50% of U.S. vaccine supply came from Chiron’s plant• Chiron’s stock falls 30%, other companies quickly move in to fill market needChiron’s stock falls 30%, other companies quickly move in to fill market need
Baxter’s heparin – Baxter’s heparin – Someone else did itSomeone else did it• Baxter uses domestic manufacturing partner, who outsources production to Baxter uses domestic manufacturing partner, who outsources production to
ChinaChina• Somewhere along production chain, in apparent case of economic fraud, Somewhere along production chain, in apparent case of economic fraud,
oversulfated chondroitin sulfate substituted for heparinoversulfated chondroitin sulfate substituted for heparin
J&J’s human serum-free Epogen – J&J’s human serum-free Epogen – Blame the governmentBlame the government• EMEA request to eliminate HSA from Eprex (sold as Epogen by Amgen in the EMEA request to eliminate HSA from Eprex (sold as Epogen by Amgen in the
US)US)• Immunogenic responses emerge in Eprex patientsImmunogenic responses emerge in Eprex patients• Five-year, $100 million investigation, discovers that that Polysorbate 80, the Five-year, $100 million investigation, discovers that that Polysorbate 80, the
human serum albumin substitute, was reacting with uncoated rubber stoppers human serum albumin substitute, was reacting with uncoated rubber stoppers used in used in oneone of the drug dosage forms of the drug dosage forms
BUILDING BIOTECHNOLOGY pp. 202, 346-7, 161
LessonsLessons
IPIP• Be prepared for unexpected patent litigationBe prepared for unexpected patent litigation• Be prepared to challenge the validity of competitor patentsBe prepared to challenge the validity of competitor patents
• A common response to infringement challengesA common response to infringement challenges
• Don’t short-change IP due diligenceDon’t short-change IP due diligence• Have multiple products in developmentHave multiple products in development
ManufacturingManufacturing• Don’t lose your manufacturing licenseDon’t lose your manufacturing license• Don’t lose control of outsourcersDon’t lose control of outsourcers• Buy insuranceBuy insurance
If you build it, they might not comeIf you build it, they might not come
Biotechnology is, by its nature, Biotechnology is, by its nature,
revolutionary.revolutionary.
Just because something is new Just because something is new oror
based on exotic science, it’s based on exotic science, it’s notnot
guaranteed to sell.guaranteed to sell.
Evacyte: Classic technology pushEvacyte: Classic technology push
Spun out of UT Austin in 2000Spun out of UT Austin in 2000• Commercialize patented method to stretch Commercialize patented method to stretch
cells between two laser beamscells between two laser beams• Assay for cancer detection:Assay for cancer detection:
Healthy cells don’t stretch, cancer cells doHealthy cells don’t stretch, cancer cells do
Perceived primary challengePerceived primary challenge• FDA trials to prove efficacyFDA trials to prove efficacy
Actual primary challengeActual primary challenge• Change the practice of physiciansChange the practice of physicians
• Cell stretchiness was often associated with other signs of Cell stretchiness was often associated with other signs of cancer, cancer, limiting its utility for positive diagnosislimiting its utility for positive diagnosis
• In the absence of stretching but presence of other indicators of In the absence of stretching but presence of other indicators of cancer, oncologists would still treat for cancercancer, oncologists would still treat for cancer
Where’s the value?Where’s the value?
BUILDING BIOTECHNOLOGY pp. 264-265
Calgene’s Flavr Savr tomatoCalgene’s Flavr Savr tomato
Produce a novel tomato product that can be sold at a premium Produce a novel tomato product that can be sold at a premium priceprice
Most tomatoes are gas-ripenedMost tomatoes are gas-ripened• Picked while green Picked while green • Sprayed with ethylene to ‘ripen’ prior to saleSprayed with ethylene to ‘ripen’ prior to sale• Result is bright red but tasteless tomatoesResult is bright red but tasteless tomatoes
Vine-ripened tomatoes sell for a premiumVine-ripened tomatoes sell for a premium• Tastier than gas-ripened tomatoesTastier than gas-ripened tomatoes• Cost more to deliver to market, have shorter shelf-lives, limited availabilityCost more to deliver to market, have shorter shelf-lives, limited availability
Polygluconase enzyme was associated with ripening in 1984Polygluconase enzyme was associated with ripening in 1984• Highly expressed in red tomatoes, absent in green tomatoesHighly expressed in red tomatoes, absent in green tomatoes• Calgene set out to reduce expression of polygluconase to delay ripeningCalgene set out to reduce expression of polygluconase to delay ripening
Goal: Produce tomatoes that can be transported like gas-ripened Goal: Produce tomatoes that can be transported like gas-ripened tomatoes tomatoes
but are worthy of vine-ripened pricesbut are worthy of vine-ripened prices
Produce a novel tomato product that can be sold at a premium Produce a novel tomato product that can be sold at a premium priceprice
Most tomatoes are gas-ripenedMost tomatoes are gas-ripened• Picked while green Picked while green • Sprayed with ethylene to ‘ripen’ prior to saleSprayed with ethylene to ‘ripen’ prior to sale• Result is bright red but tasteless tomatoesResult is bright red but tasteless tomatoes
Vine-ripened tomatoes sell for a premiumVine-ripened tomatoes sell for a premium• Tastier than gas-ripened tomatoesTastier than gas-ripened tomatoes• Cost more to deliver to market, have shorter shelf-lives, limited availabilityCost more to deliver to market, have shorter shelf-lives, limited availability
Polygluconase enzyme was associated with ripening in 1984Polygluconase enzyme was associated with ripening in 1984• Highly expressed in red tomatoes, absent in green tomatoesHighly expressed in red tomatoes, absent in green tomatoes• Calgene set out to reduce expression of polygluconase to delay ripeningCalgene set out to reduce expression of polygluconase to delay ripening
Goal: Produce tomatoes that can be transported like gas-ripened Goal: Produce tomatoes that can be transported like gas-ripened tomatoes tomatoes
but are worthy of vine-ripened pricesbut are worthy of vine-ripened prices
BUILDING BIOTECHNOLOGY p. 326
Path to developmentPath to developmentPath to developmentPath to development
Isolate PG gene and generate antisense tomatoesIsolate PG gene and generate antisense tomatoes
Develop assay for ripeningDevelop assay for ripening• Flavr Savr tomatoes spoiled slower than wild tomatoes at room Flavr Savr tomatoes spoiled slower than wild tomatoes at room
temperaturetemperature• 1 lb weight and timer to measure firmness1 lb weight and timer to measure firmness
Field testField test• Flavr Savr tomatoes ripened as fast as wild tomatoes, rotted slowerFlavr Savr tomatoes ripened as fast as wild tomatoes, rotted slower
File PatentsFile Patents
Solicit FDA ApprovalSolicit FDA Approval• Demonstrate that Flavr Savr tomatoes do not pose a health riskDemonstrate that Flavr Savr tomatoes do not pose a health risk
Isolate PG gene and generate antisense tomatoesIsolate PG gene and generate antisense tomatoes
Develop assay for ripeningDevelop assay for ripening• Flavr Savr tomatoes spoiled slower than wild tomatoes at room Flavr Savr tomatoes spoiled slower than wild tomatoes at room
temperaturetemperature• 1 lb weight and timer to measure firmness1 lb weight and timer to measure firmness
Field testField test• Flavr Savr tomatoes ripened as fast as wild tomatoes, rotted slowerFlavr Savr tomatoes ripened as fast as wild tomatoes, rotted slower
File PatentsFile Patents
Solicit FDA ApprovalSolicit FDA Approval• Demonstrate that Flavr Savr tomatoes do not pose a health riskDemonstrate that Flavr Savr tomatoes do not pose a health risk
Market launchMarket launch
Taste of Flavr Savr tomatoes not as good as competing Taste of Flavr Savr tomatoes not as good as competing premiumspremiums• Flavr Savr gene was not introduced into premium tomato varietiesFlavr Savr gene was not introduced into premium tomato varieties
Flavr Savr tomatoes could not withstand shippingFlavr Savr tomatoes could not withstand shipping• Firmer than vine-ripened, but not as durable as green tomatoesFirmer than vine-ripened, but not as durable as green tomatoes
General lack of expertise in the fresh-tomato businessGeneral lack of expertise in the fresh-tomato business• Product pulled from marketProduct pulled from market
Flavr Savr tomatoes had marginal added value; Flavr Savr tomatoes had marginal added value; could not be sold at a profitcould not be sold at a profit
Taste of Flavr Savr tomatoes not as good as competing Taste of Flavr Savr tomatoes not as good as competing premiumspremiums• Flavr Savr gene was not introduced into premium tomato varietiesFlavr Savr gene was not introduced into premium tomato varieties
Flavr Savr tomatoes could not withstand shippingFlavr Savr tomatoes could not withstand shipping• Firmer than vine-ripened, but not as durable as green tomatoesFirmer than vine-ripened, but not as durable as green tomatoes
General lack of expertise in the fresh-tomato businessGeneral lack of expertise in the fresh-tomato business• Product pulled from marketProduct pulled from market
Flavr Savr tomatoes had marginal added value; Flavr Savr tomatoes had marginal added value; could not be sold at a profitcould not be sold at a profit
Why do companies aim for empty Why do companies aim for empty markets?markets?
HaveHave• Potent technologiesPotent technologies
WantWant• FundingFunding
SellSell• Any opportunity you canAny opportunity you can
Genentech’s first product was a throwaway Genentech’s first product was a throwaway neurotransmitter, but it proved their technologyneurotransmitter, but it proved their technology
Estimating market sizeEstimating market size
Measuring market size helps:Measuring market size helps:• Attract investors and partnersAttract investors and partners
• Determine royalties and compensationDetermine royalties and compensation
• Determine necessary production capacityDetermine necessary production capacity
• Inform actions to develop internal sales team / Inform actions to develop internal sales team / external partnershipexternal partnership
BUILDING BIOTECHNOLOGY pp 235-239, 273-276
Resolving valuation disagreementsResolving valuation disagreements
Centocor and Schering-Plough disagree on market Centocor and Schering-Plough disagree on market potential for Remicadepotential for Remicade
• First dedicated treatment for Crohn’s diseaseFirst dedicated treatment for Crohn’s disease• Centocor estimates: $1 billion in 10yCentocor estimates: $1 billion in 10y• Shering-Plough estimates: 300mmShering-Plough estimates: 300mm
Compromise:Compromise:• Centocor asks for lower royalty up to $300mm in sales, higher Centocor asks for lower royalty up to $300mm in sales, higher
royalty past $300mmroyalty past $300mm
Result:Result:• Remicade achieves $1.2 billion in sales within 6yRemicade achieves $1.2 billion in sales within 6y• Contract extended, Centocor’s profit share increasedContract extended, Centocor’s profit share increased
BUILDING BIOTECHNOLOGY p 304
Low estimates can be detrimentalLow estimates can be detrimental
Enbrel: Underestimating market sizeEnbrel: Underestimating market size• First-in-class drug for rheumatoid First-in-class drug for rheumatoid
arthritisarthritis• Difficult to assess market size for first-in-class drugsDifficult to assess market size for first-in-class drugs
• Immunex is overly-pessimistic in projecting patient Immunex is overly-pessimistic in projecting patient drop-outdrop-out
Drug sets 24-month sales growth recordDrug sets 24-month sales growth record• Immunex resorts to drug rationingImmunex resorts to drug rationing• Inability to fully leverage drug popularity leads to Inability to fully leverage drug popularity leads to
acquisition by Amgenacquisition by Amgen
BUILDING BIOTECHNOLOGY p 275
LessonsLessons
Know your marketKnow your market• What painful unmet need are you filling?What painful unmet need are you filling?
Know your market sizeKnow your market size• What assumptions are you making?What assumptions are you making?• Why might your estimates be off?Why might your estimates be off?• What if you’re wrong? What if you’re wrong? • How can you hedge you bets?How can you hedge you bets?
Off-label useOff-label use
Drug companies are not allowed to advocate usage Drug companies are not allowed to advocate usage of drugs for indications which are not FDA of drugs for indications which are not FDA approvedapproved
• But physicians are free to use drugs for any indicationBut physicians are free to use drugs for any indication
UpsideUpside• More salesMore sales
DownsideDownside• Loss of control of pricing, patentsLoss of control of pricing, patents• Potential for side-effects to emerge and prompt market Potential for side-effects to emerge and prompt market
withdrawalwithdrawal
BUILDING BIOTECHNOLOGY pp 148-150
Fen-Phen: Yes, you can be too popularFen-Phen: Yes, you can be too popular
Fen-PhenFen-Phen• FDA-unapproved combination of fenfluramine and FDA-unapproved combination of fenfluramine and
phenterminephentermine• Fenfluramine: approved for Fenfluramine: approved for short-term short-term treatment of obesitytreatment of obesity• Phentermine: member of a class of drugs traditionally used for Phentermine: member of a class of drugs traditionally used for
treatment of morbid obesitytreatment of morbid obesity
• Fen-Phen becomes widely used by weight-loss clinics. Fen-Phen becomes widely used by weight-loss clinics. Fenfluramine sees largest the largest single-year increase Fenfluramine sees largest the largest single-year increase (300%) of any drug in the United States.(300%) of any drug in the United States.
• Following revelation of heart valve problems, fenfluramine Following revelation of heart valve problems, fenfluramine and chemically-similar dexfenfluramine pulled from marketand chemically-similar dexfenfluramine pulled from market
BUILDING BIOTECHNOLOGY p 150
Fentora: Don’t buy our drugFentora: Don’t buy our drug
FentoraFentora• For cancer pain untreatable by regular pain medicinesFor cancer pain untreatable by regular pain medicines
Four deathsFour deaths• Fentora used to treat conditions such as headacheFentora used to treat conditions such as headache
ResponseResponse• Cephalon sends letters to doctors reaffirming that Cephalon sends letters to doctors reaffirming that
Fentora is only to be used for cancer pain that is Fentora is only to be used for cancer pain that is untreatable by regular doses of pain medicinesuntreatable by regular doses of pain medicines
BUILDING BIOTECHNOLOGY p 148
Avastin: Controlling off-label useAvastin: Controlling off-label use
Lucentis and Avastin: Lucentis and Avastin: Monoclonal antibodies produced by GenentechMonoclonal antibodies produced by Genentech• Lucentis ($2,000 per treatment): approved for advanced, age-related Lucentis ($2,000 per treatment): approved for advanced, age-related
macular degeneration (AMD)macular degeneration (AMD)• Avastin ($150 per treatment): approved for colon and other cancers, but Avastin ($150 per treatment): approved for colon and other cancers, but
not for macular degenerationnot for macular degeneration
Doctors widely using Avastin for AMDDoctors widely using Avastin for AMD• Genentech responds by banning Avastin purchases by compounding Genentech responds by banning Avastin purchases by compounding
pharmacies, which repackage it for eye injectionpharmacies, which repackage it for eye injection• Cites FDA concerns regarding the safety and efficacy of drugs from Cites FDA concerns regarding the safety and efficacy of drugs from
compounding pharmaciescompounding pharmacies
Physicians and patients complainPhysicians and patients complain• Many patients may be unable to access vision-saving drugMany patients may be unable to access vision-saving drug• NIH National Eye Institute initiates trial to test efficacy of Avastin for AMDNIH National Eye Institute initiates trial to test efficacy of Avastin for AMD
BUILDING BIOTECHNOLOGY p 282
LessonsLessons
Monitor prescriptions and patient Monitor prescriptions and patient outcomesoutcomes
Be willing to say no: don’t let markets or Be willing to say no: don’t let markets or greed dictate prescription policygreed dictate prescription policy
Shareholder / board activismShareholder / board activismBUILDING BIOTECHNOLOGY pp. 193-197
Dyadic: Dyadic: Et tu BruteEt tu Brute
Entrepreneur uses shipping arbitrage to dominate landscaping Entrepreneur uses shipping arbitrage to dominate landscaping stone marketstone market
• Wants to diversify, so he sells pumice to Levi’s for stonewashed jeansWants to diversify, so he sells pumice to Levi’s for stonewashed jeans• Emergence of cellulases starts eroding pumice stonewashing marketEmergence of cellulases starts eroding pumice stonewashing market
If someone’s going to put me out of business, it might as well If someone’s going to put me out of business, it might as well be mebe me
• Repeats strategy used to dominate landscaping stone market: find a Repeats strategy used to dominate landscaping stone market: find a cheaper sourcecheaper source
• Forms partnership with Moscow State University to select and Forms partnership with Moscow State University to select and engineerengineerfungi for optimal cellulase activityfungi for optimal cellulase activity
• Creates first fungal mass protein-production systemCreates first fungal mass protein-production system• Starts targeting pharmaceutical applicationsStarts targeting pharmaceutical applications
Attack from withinAttack from within• Financial irregularities with Chinese partnerFinancial irregularities with Chinese partner• Board ousts founderBoard ousts founder
Shareholder
letter
Founder regains control … of what?Founder regains control … of what?
MedImmune: Shareholder activismMedImmune: Shareholder activism
Shareholders lack faith in managementShareholders lack faith in management• Believe MedImmune would deliver greater value if Believe MedImmune would deliver greater value if
acquiredacquired• Carl Icahn buys 1.16 % of MedImmune, threatens a Carl Icahn buys 1.16 % of MedImmune, threatens a
proxy-war (backed by other shareholders) to obtain a proxy-war (backed by other shareholders) to obtain a board seat and push for acquisitionboard seat and push for acquisition
• Management relents and seeks acquisitionManagement relents and seeks acquisition
MedImmune reaches agreement to be acquired by MedImmune reaches agreement to be acquired by AstraZeneca for $15 billionAstraZeneca for $15 billion
• Icahn makes $300 millionIcahn makes $300 million
BUILDING BIOTECHNOLOGY pp. 195
With partners like these, who needs With partners like these, who needs competitorscompetitors
Your technology may workYour technology may work
Your market may be goodYour market may be good
Your execution may be flawlessYour execution may be flawless
but,but,
Watch your back!Watch your back!
Suing the Red CrossSuing the Red Cross
J&J vs. Red CrossJ&J vs. Red Cross• 100 year-old agreement to share “red cross” symbol:100 year-old agreement to share “red cross” symbol:
• J&J uses it for commercial productsJ&J uses it for commercial products• Red Cross uses it for humanitarian missionRed Cross uses it for humanitarian mission
2007: Red Cross licenses symbol for first-aid kits2007: Red Cross licenses symbol for first-aid kits• Trademark law requires owners to actively police their mark or Trademark law requires owners to actively police their mark or
risk losing it (e.g. Bayer no longer owns “aspirin” trademark)risk losing it (e.g. Bayer no longer owns “aspirin” trademark)
J&J sues Red CrossJ&J sues Red Cross• Initial ruling sides with Red CrossInitial ruling sides with Red Cross• J&J withdraws case, loses faceJ&J withdraws case, loses face
BUILDING BIOTECHNOLOGY p 131
IP disputes with major backersIP disputes with major backers
Sandoz and Ciba Geigy merge to form NovartisSandoz and Ciba Geigy merge to form Novartis• Shelve SPP100 due to inability to profitably manufacture itShelve SPP100 due to inability to profitably manufacture it
Ciba Geigy scientist Alice Huxley forms spin-off to pursue drugCiba Geigy scientist Alice Huxley forms spin-off to pursue drug• Novartis licenses drug with buy-back optionNovartis licenses drug with buy-back option• Becomes major funder, owns 10% of SpeedelBecomes major funder, owns 10% of Speedel
Speedel develops new manufacturing processSpeedel develops new manufacturing process• SPP100 gains FDA approval, launched as TekturnaSPP100 gains FDA approval, launched as Tekturna• First in a new class of drugs for high blood pressureFirst in a new class of drugs for high blood pressure• Novartis charged with using new manufacturing process for other drugs, Novartis charged with using new manufacturing process for other drugs,
without licensewithout license
Solution: Novartis announces plans to buy Speedel for $880mmSolution: Novartis announces plans to buy Speedel for $880mm
BUILDING BIOTECHNOLOGY p 186
Nektar: Running with the big dogsNektar: Running with the big dogs
Insulin market is mature, VERY largeInsulin market is mature, VERY large• Nectar develops inhalable version of insulin. Projected $2-3B annual Nectar develops inhalable version of insulin. Projected $2-3B annual
sales.sales.• After six years of clinical trials, delivery system is approvedAfter six years of clinical trials, delivery system is approved
Need large partner to market drug effectively Need large partner to market drug effectively • Pfizer charged with marketing drug, leveraging their massive sales forcePfizer charged with marketing drug, leveraging their massive sales force
Pfizer gets scaredPfizer gets scared• Long term effects of protein administration via lungs is unknownLong term effects of protein administration via lungs is unknown• Vioxx-like recall could bankrupt PfizerVioxx-like recall could bankrupt Pfizer• Deal with Nektar was made three CEOs agoDeal with Nektar was made three CEOs ago• Pfizer pulls drugPfizer pulls drug
Nectar’s outcomeNectar’s outcome• Learns of Pfizer’s withdrawal Learns of Pfizer’s withdrawal via press releasevia press release• Gets $135mm payoff, pays $38mm to suppliersGets $135mm payoff, pays $38mm to suppliers• 150 staff cut, COO leaves, company to change focus to drug 150 staff cut, COO leaves, company to change focus to drug
developmentdevelopment
BUILDING BIOTECHNOLOGY pp.250-251, 308
LessonsLessons
Know when to ask for helpKnow when to ask for help• Entrepreneurs are exceedingly good at starting companies,Entrepreneurs are exceedingly good at starting companies,
but they may need professional assistance in running thembut they may need professional assistance in running them
Avoid outsized partnerships or opportunitiesAvoid outsized partnerships or opportunities• Find a compatible partner: Pfizer had much more to lose Find a compatible partner: Pfizer had much more to lose
from a tort suit than from not selling inhalable insulinfrom a tort suit than from not selling inhalable insulin• Contract with Pfizer should have clearly laid out expectations and Contract with Pfizer should have clearly laid out expectations and
included punitive penalties for underperformanceincluded punitive penalties for underperformance
• MedImmune’s enterprise value had outgrown managementMedImmune’s enterprise value had outgrown management
Don’t sue the Red CrossDon’t sue the Red Cross
The business plan is but the The business plan is but the beginningbeginning
The business plan is but the The business plan is but the beginningbeginning
It is not the planning that is important; it is the planning that makes you able to change it
Dwight D. Eisenhower
Business plan should:•Define framework for operations•Set objectives and milestones
If you don’t know where you’re going, you’ll end up somewhere else – Yogi Berra
•Provide a basis for contingency plans•Remain flexible
It is not the planning that is important; it is the planning that makes you able to change it
Dwight D. Eisenhower
Business plan should:•Define framework for operations•Set objectives and milestones
If you don’t know where you’re going, you’ll end up somewhere else – Yogi Berra
•Provide a basis for contingency plans•Remain flexible
Yali Friedman – [email protected]
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