WIB Profile: Will Partnering Models Continue To Evolve In 2016?

By Ed Miseta, Chief Editor, Clinical Leader

Jennifer Reichuber has spent over 15 years doing clinical research, with much of that time spent in senior research positions at Genentech. She has also spent time working as a director of global alliances and channels for Oracle. However, looking back on her career, she will quickly tell you the work she currently does as a consultant is what she enjoys the most. “I like helping companies accomplish their goals quickly and efficiently,” she says. “If I can use my knowledge and experience to help a company get their medicine to patients faster, or the preventive care that is needed for the patient to market quickly, then it’s a win all the way around.” She also enjoys helping others in the industry through the networking she does via her participation in Women in Bio.

I recently spoke to Reichuber about clinical trends we might expect to see in 2016. She feels the industry continues to undergo change in regard to partnering agreements. But are strategic partnerships going away or just evolving? And in what areas do small pharma and biotech firms really need the most help? In this Q&A article, the co-founder and principal of Altani Associates shares her thoughts.

Ed Miseta: I hear a lot of industry professionals saying we may be moving from strategic partnerships back to FSP (functional service provider) models. Are you seeing anything similar?

Jennifer Reichuber: I am seeing the exact same thing. Like a tide, we often see these different partnering models ebbing and flowing. Over the last 10 years I have seen the shift. But right now I am definitely seeing some companies resorting back to the FSP model. I like to refer to these as lean strategic partnerships because sponsors are essentially setting up light touch partnerships with perhaps three or four FSPs.

Miseta: What do you think is causing this trend?

Reichuber: I have seen a few strategic partnerships that did not work out well, but in those cases it was generally the ones where the pharma or biotech company did not actually relinquish control to the CRO like they promised they would. As a result, I’m sure there are many large sponsors right now that are beginning to reevaluate their sourcing model. They are looking into whether it is best for them to go with a strategic partnering or FSP model, but also trying to find things they could be doing more efficiently, regardless of what model they use.

The problem with many large companies is that they simply do not fully trust their strategic partner, or they do not put in place the necessary governance models and metrics to ensure bi-lateral partnership and success. Trust is fundamental in strategic partnerships and any situation where companies are building teams. If the sponsor would not give the strategic partner a seat at the table, it’s almost impossible for a strategic partnering model to work.

Current industry trends such as patient-centricity, or real world data/evidence, risk based monitoring, and personalized medicine are likely also causing this shift from strategic partnerships to FSP engagements. Some companies prefer to leverage in house talent and expertise before they are comfortable outsourcing to a strategic partner. Again, it comes down to trust. I know many folks in the industry working at CRO’s that are incredibly experienced and knowledgeable. They can add great value as strategic partners if they are given a seat at the table.

Miseta: What about the possibility of a Pfizer purchasing an ICON or a PAREXEL?

Reichuber: You’re not the first person I have heard mention that. I also hear a lot of talk about pharma companies purchasing a technology company outright rather than buying their product or service.

A potential downfall I could see is diluting their expertise. Suddenly you have a sponsor company that is also a tech company or a CRO and their core expertise is not as a services organization. That can be a difficult thing for any company to have to balance. But I can certainly see a holding company that is part of a large pharma company engaging in such a model.  

Miseta: What about a large CRO purchasing a small pharma or biotech company?

Reichuber: I think that would be a really interesting opportunity for a CRO. PPD recently acquired a small biotech so it’s happening.

Think about a mid-sized CRO like SynteractHCR, for example. A company that size is leaner and more agile than a larger CRO. They would definitely have the flexibility to be able to pull it off. They also have the core competency to be able to deliver. In a situation like that, they could actually derive some of the clinical trial changes and innovation we need the industry to do from a personalized medicine perspective.

I enjoy working with the small companies because it is always back to basics. Forget about the high-level concepts – they are thinking about things like finding the right CRO, obtaining next round of funding, and meeting primary objectives on trials. Part of my job is identifying the CROs and suggesting VCs that might be able to help them.

It’s fun to work with them because they do not have these highly complex system landscapes and over-engineered business processes. They also do not have complex strategic partnerships. As a result, they are able to do drug development in a more lean and agile manner. I am able to introduce new solutions to them like design thinking, telemedicine, or mHealth. I find the founding teams of these small companies to also be more innovative, since they are generally coming out of VC companies or large pharma and biotech firms, and they want to move the needle in a disease state quickly.

Miseta: Do they generally know how to present to VC companies?

Reichuber: Some do but that is another task I enjoy working on with them as a trusted team member. I can generally help in two ways. The first is to help them with their language and how to properly present to both partners and funding teams. I also help them to better understand the market and their market positioning. The founding team is often comprised of an operations person, a chief medical officer, and a researcher. In such a scenario, they do not have the skill set to speak to VCs about their pipeline, their clinical development plan, or their target product profile, from the lenses of the VC/funding team as it has not likely been a focus area for them previously. By communicating with trust and demonstrated competency, we have been able to assist with both biotechs and technology companies growing their businesses.

Miseta: How are you able to help with CRO selection?

Reichuber: Altani can help our clients with establishing strategic sourcing models, or on a trial/disease state CRO allocation. We evaluate the operational model of the sponsor and through our depth of knowledge on CRO capabilities; we can quickly recommend “matches” to the needs of our clients. For some client engagements, we have developed RFP’s/RFP’s and managed bid defenses to drive selection of the best fit CRO.

Occasionally you will have someone on the management team on a project that knows someone at a CRO, and has a strong preference, but when we are brought in to establish a sourcing model or identify best candidate CRO. 

We discussed strategic partnering earlier. With many of these small and virtual biotech companies, they are doing strategic partnering without actually calling it that. They turn their entire project over to a CRO and transfer the obligation of all responsibilities. That CRO obviously has to be a trusted partner. I have seen instances where they picked the right CRO and things worked really well, and a few instances where the relationship did not work out well as often times assumptions were made.