Licensing Trends By Clinical Phase
Executive Summary
We revisit a chart from 1997 examining deal volume by clinical phase to highlight the changing landscape of late stage licensing.
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The Infrastructure Dilemma
Most drug companies struggle against duplicating in their biotech partners the development and marketing infrastructure that will support the collaboration's product. And though they frequently lose that battle, biotechs generally have to co-fund their share of the expenses, including infrastructure. But the Neurocrine/Pfizer transaction on indiplon marks a new valuation sign post. Not only will it pay significant up-fronts, milestones, and royalties, but Pfizer will fund all further clinical work, while Neurocrine makes final development decisions, and 100% of the creation and maintenance of Neurocrine's sales and marketing group, while supplying it with a blockbuster quid, Zoloft. Pfizer's strategy: to turn infrastructure overlap into sales augmentation: it will control indiplon's marketing and, by helping to train Neurocrine's sales force, be able to exercise considerable influence over its direction and activities. Moreover, if it chooses to acquire Neurocrine, it will be able to do so with minimal integration issues since the Neurocrine marketing team will have been so closely associated with the Pfizer way of doing things.
The Infrastructure Dilemma
Most drug companies struggle against duplicating in their biotech partners the development and marketing infrastructure that will support the collaboration's product. And though they frequently lose that battle, biotechs generally have to co-fund their share of the expenses, including infrastructure. But the Neurocrine/Pfizer transaction on indiplon marks a new valuation sign post. Not only will it pay significant up-fronts, milestones, and royalties, but Pfizer will fund all further clinical work, while Neurocrine makes final development decisions, and 100% of the creation and maintenance of Neurocrine's sales and marketing group, while supplying it with a blockbuster quid, Zoloft. Pfizer's strategy: to turn infrastructure overlap into sales augmentation: it will control indiplon's marketing and, by helping to train Neurocrine's sales force, be able to exercise considerable influence over its direction and activities. Moreover, if it chooses to acquire Neurocrine, it will be able to do so with minimal integration issues since the Neurocrine marketing team will have been so closely associated with the Pfizer way of doing things.
Is Group Purchasing Broke?
Facing unprecedented scrutiny from major media and the US Senate, leading GPOs are beginning to revamp their policies to address concerns on the part of small suppliers that the current system unfairly excludes them. But given the animosity between the two sides, will there ever be a meeting of the minds on GPO reform?