The Rise Of The Alt-Deal
Executive Summary
As the pharmaceutical industry works to manage big data, improve the way drugs are used and delivered, and expand services to patients, industry is working increasingly with non-traditional partners.
Pharma’s interest in using big data to demonstrate the value of its medicines and efforts to expand services to patients beyond the pill are resulting in more deals between biopharma and non-traditional partners like digital health firms, data management companies and other service providers.
The growing interest in these kinds of alternative deals, generally partnerships and alliances instead of outright M&A, was evident in 2016. This increasing emphasis on alliances with partners outside the industry that provide related services is expected to continue.
“When I talk to the larger life sciences companies, they are very active in alliances with non-traditional partners,” says PwC’s Dimitri Drone, global pharmaceutical and life sciences leader, deals practice.
“For years the model has been, [here’s] a company like me. I’m going to partner with them and we are going to bring a drug to market,” he says. “Now you are seeing a lot of discussion around a company unlike me, and we are going to partner to try to understand more about how drugs interact with a patient population, how to make sense of all this big data that is being created as it relates to pharmaceuticals and health care.”
EY’s global life sciences industry leader Pamela Spence agrees. “I can very clearly see a world where new combinations and alliances are performed with companies who can help deliver services whilst pharma, medtech, biotech stick to their core,” she says.
Teva Pharmaceutical Industries Ltd. chief scientific officer Michael Hayden, PhD, addressed the Israeli pharma’s interest in non-traditional alliances during the company’s second-quarter sales and earnings call.
“The partners that we are looking at are not just around products, but also around technologies that can enhance compliance and adherence and add to the quality of life of the patients that we serve,” he said. Teva has been active in the space, signing deals last year with partners like Microchips Biotech to apply its implantable drug delivery device to Teva’s portfolio of products and IBM Watson Health to analyze big data.
Many big pharmas are making similar moves. Here is a look at some of the alternative partnerships industry has signed this year:
- GlaxoSmithKline PLC and Verily Life Sciences (formerly Google Life Sciences) will form a new company called Galvani Bioelectronics to develop and commercialize bioelectronics medicines, with plans to invest £540 million in the joint venture over seven years. ( (Also see "GSK And Google To Invest £540m In UK-Headquartered Bioelectronics JV" - Scrip, 1 Aug, 2016.).)
- Astellas Pharma Inc. is developing a new investment venture DigiTx Partners with health care venture firm MPM Capital; DigiTx will invest in broad initiatives across the digital health arena. ( (Also see "Astellas Dips Into Digital Health Via New Venture" - Scrip, 4 Aug, 2016.).)
- Pfizer Inc., in April, said it is working with IBM to develop a remote monitoring system for Parkinson’s disease. The system, made up of sensors and a mobile device, will provide around-the-clock, real-time symptom information to clinicians, with the goal of better understanding disease progression.
- Novartis AG and Microsoft revealed in February how they are developing Microsoft Kinect (used with an Xbox games console) as a tool called Assess MS to more consistently measure multiple sclerosis patients’ performance in tests and better assess disease progression.
- Novartis teamed with Qualcomm Life in January to develop a next-generation Breezhaler that will give patients real-time access to data on their inhaler. ( (Also see "Mylan's Generic Advair FDA Filing Puts Added Squeeze On GSK " - Scrip, 13 Jan, 2016.).)