So far, 2018 and 2019 have been off to a flying start with over $200B in M&A activity. Just a few major examples include:
With new innovations and the increase in M&A activity, how do new innovations and acquisitions inform corporate strategy? This white paper summarizes and frames a company’s strategy, portfolio, and business development transactions. This includes investments made across different modalities and platforms, different disease areas, in-house and licensing opportunities, etc. This approach supports the entire value chain from Research, Development through Commercial opportunities.
The result is not a portfolio that is balanced – unless that’s the company’s goal. The result is a portfolio that is transparent and aligned with the corporate strategy. The approach also addresses a problem – many companies focus on process, analytics, resources – which are all important. However, the strategy itself is ambiguous and is seen as opportunistic or a gut instinct. Scimitar Inc. proposes a different approach that aligns our strategic, scientific, and business objectives to allow executives to establish a clear strategy and make portfolio decisions align with the corporate direction.
Companies often evaluate products by thinking about a product’s natural growth and maturity phase. Looking at a disease area across several competitive products we find a similar lifecycle effect –sometimes lasting 30 years based on one initial discovery, followed by several similar and/or better products.
A lifecycle may include working in a Novel, Growing or Mature Disease area. To further define these:
Similarly, we can look at the specific targets and assess the level of target validation for what we call the “Scientific” or Innovation axis. A company needs to define these for itself, but an example includes:
Proven Mechanism – Marketed product.
Emerging Mechanism – Definition depends on a corporate level and company wide use. Some companies have stated Phase II POC data (p value > X).
Novel Mechanism – Only animal or human target validation data (e.g., pharmacology, genetics, pathophysiology, early efficacy indicators).
Defining the level of validation across a variety of scientific measures may include:
Pathophysiology–do the physiological changes from this disease make this region and target a viable option?
Pharmacology–is this a druggable target and are we seeing traction?
Early Efficacy–have we or a competitor established early efficacy indicators based on Phase 2A studies?
Genetics–Is there genetics data (e.g., GWAS) that validate the target?
The level of strength across some or multiple categories allows a company to understand the risk with target selection, it makes the process transparent, and drives alignment across governance and teams as to why leadership has chosen these specific targets for the portfolio.
A large pharmaceutical company’s legacy approach was a novel, highly risky and invalidated mechanisms, along with an attrition-based approach. This led to projects failing to advance through the pipeline and almost no candidates advancing to Phase III and Launch. The new approach reinvigorated their pipeline and resulted in several launches across a variety of disease areas, completely turning around the company’s direction.
And if one combines these –the Disease Area and Scientific axes –they end up with an extraordinary framework for thinking about how business and science intersect.
Within this framework, companies can take a variety of different approaches. Further examination shows that each has its own challenges and implications:
Note: The colors may indicate difficulty of entry (e.g., orange), but doesn’t exclude a company from working in that particular space. As an example, Cardiovascular Disease was a mature disease area with generic competition, and it was saturated with “me-too” products that were going off patent. However, companies developed products targeting PCSK9 to help patients with high LDL. This re-invigorated the market and transformed the Disease Area from a mature to a growing market disease arena.
Portfolio Managers and Portfolio Committees can look at their Programs, Modalities, Disease Areas, and Licensing Opportunities to understand strategic fit, risk, value, etc. that drive corporate “go/no-go” decisions.
It’s an exciting time in the BioPharmaceutical industry with therapies being developed that Bolster, Treat, and Alter the immune system to fight disease. As depicted in the Figure below, the competitive environment and treatment options for patients is growing at significant rate.
For companies developing their internal strategy across Research, Licensing, and Acquisitions, the portfolio mix of options is remarkable –each company’s blueprint and final offering of products can be quite unique.
Scimitar, Inc. is positioned to help companies develop their R&D, Business Development, Disease Area and Life Cycle Management strategies to enable for long-term company success and supporting organizations to help patients live better lives.
Top 5 Pharma Company had a highly risky portfolio.
Majority of their R&D focus was on highly innovative, very risky programs which was counter to their corporate strategy.
Presented the discrepancy between their Corporate Strategy and actual pipeline execution.
This has been applied at small biopharma and large pharma companies to inform Business Development and portfolio advancement decisions
Amit Bhatia practices operational strategy management consulting in the areas of post-merger integration, strategic workforce planning, and early & late stage development. He focuses on strategy, performance management, and team dynamics.
| Intended Reader Biopharma leaders | Key Takeaways GLP-1 drugs inspire broader therapeutic advancements. Long-lasting delivery mechanisms reduce dosing frequency. Sustained delivery technologies attract significant
| Intended Reader Functional Leaders Business Managers | Key Takeaways Effective team management benefits from structure Business managers are central to high performance Begin with
| Intended Reader Biopharma leaders | Key Takeaways Striking a Balance Between Speed and Safety Global Collaboration for Effective Regulatory Pathways Agile Regulations for Rapidly
| Intended Reader Biopharma leaders | Key Takeaways Striking a Balance Between Speed and Safety Global Collaboration for Effective Regulatory Pathways Agile Regulations for Rapidly
| Intended Reader Biopharma leaders | Key Takeaways Emerging Modalities: Cell and Gene Therapies Engineered Live Biotherapeutics Regulatory Adaptations to Facilitate Innovation Implications for Clinical