SUBSCRIBE

Breaking News on Contract Research, Manufacturing & Clinical Trials

Service Sectors > Phase III-IV

Big pharma firms seek CROs to co-develop excess IP; INC

By Nick Taylor , 12-Mar-2012
Last updated on 12-Mar-2012 at 11:12 GMT

Large pharma companies are seeking co-development deals to handle excess intellectual property, INC said.

In 2006 Solvay and Quintiles moved towards a co-development model and its success was hailed in Harvard Business Review. Others took note of the deal and are now viewing the model as a possible solution to some of their drug development woes.

Pharma has more intellectual property than development dollars”, Andrew Townsend, vice president of alliances at INC Research, told Outsourcing-Pharma at Partnerships in Clinical Trials. These firms are looking for creative ways to develop compounds, Townsend said, and INC wants to play a role.

INC is already involved in co-development projects and Townsend, a former Pfizer employee hired by the CRO four months ago, is tasked with advancing its relationships with clients into alliances. The formation of co-development partnerships is one possible outcome from these efforts.

Many of the co-development opportunities are at large pharmaceutical companies. For a company to want to enter into such deals it needs to have more intellectual property than it can develop and this tends to happen more at larger companies, especially after recent capacity cuts.

At the same time large sponsors are becoming more comfortable working with third-parties. “We’re seeing a great willingness from large pharma companies to hand over operational responsibility”, Neil MacAllister, chief business officer at INC, said in a virtual development session at Partnerships.

Co-development opportunities

Some smaller companies are also interested in co-development deals. INC is talking to a mid-sized biotech about a co-development deal, Townsend said, and thinks there are other opportunities beyond the leading pharmaceutical companies.

Pressures on pharmaceutical companies could create more opportunities. “Pharma has not truly been financially squeezed yet. As that happens companies will be forced to look at more creative and innovative ways to bring products to market”, Townsend said.

Shared risks and rewards feature in some of the more creative models and MacAllister said a CRO has an advantage if it can provide cash to the partnership. When PPD went private some speculated it was motivated by a desire to form more creative risk-sharing deals, like Quintiles has pursued.

FSP option

Another of possible outcome from efforts to form alliances is the creation of functional service provider (FSP) deals. INC had hoped to disclose such a deal at Partnerships but the contract is still in the last stages of discussion. Townsend expects to announce the deal by the end of the month.

The FSP deal puts the model centre stage at INC”, Townsend said. Efforts to win the contract, said to be “a big deal for [INC]”, were boosted by last year’s $232m (€177m) acquisition of Kendle, which helped popularise the FSP model with Pfizer.

INC also had some FSP experience and by acquiring Kendle created “a pretty robust business”. With this platform in place INC views FSP as “a big opportunity” in an area some CROs overlook because of the perception it offers low margins, Townsend said.

Subscribe to our FREE newsletter

Get FREE access to authoritative breaking news, videos, podcasts, webinars and white papers. SUBSCRIBE

Related products

Key Industry Events

 

Access all events listing

Our events, Events from partners...