Fo­cus on tar­get­ed val­ue cre­ation and in­creased strate­gic man­age­ment is key to ad­dress chal­lenges with R&D bio­phar­ma­ceu­ti­cal pre­c­om­pet­i­tive col­lab­o­ra­tions

Col­lab­o­ra­tion is top of mind for bio­phar­ma­ceu­ti­cal R&D ex­ec­u­tives, with 55% list­ing col­lab­o­ra­tion as the great­est op­por­tu­ni­ty to en­hance their or­ga­ni­za­tion’s R&D ca­pa­bil­i­ties.¹ With­in phar­ma­ceu­ti­cal R&D, a wide range of ecosys­tem col­lab­o­ra­tions are used to fu­el in­no­va­tion and cre­ate in­creased val­ue for the pa­tient, in­clud­ing start-up part­ner­ships, co-de­vel­op­ment with oth­er bio­phar­ma­ceu­ti­cal com­pa­nies, or aca­d­e­m­ic col­lab­o­ra­tions.

In ad­di­tion, bio­phar­ma­ceu­ti­cal com­pa­nies are em­brac­ing pre­c­om­pet­i­tive col­lab­o­ra­tions (PCCs) across the R&D val­ue chain to tack­le com­mon prob­lems. One of the fac­tors dri­ving this will­ing­ness to work with com­peti­tors is that the prob­lems be­ing tack­led by these PCCs are of­ten hard to achieve by com­pa­nies in­de­pen­dent­ly, in part due to economies of scale and the com­plex­i­ty of the chal­lenges. PCC par­tic­i­pants are seek­ing ben­e­fits such as shared costs, pooled re­sources and ef­fort, knowl­edge shar­ing, and ac­cel­er­at­ed de­liv­ery time­lines.

How­ev­er, there are two fac­tors com­pli­cat­ing the val­ue that these R&D col­lab­o­ra­tion or­ga­ni­za­tions and bio­phar­ma­ceu­ti­cal com­pa­nies can achieve to­geth­er: 1) land­scape vis­i­bil­i­ty and 2) R&D PCC dif­fer­en­ti­a­tion.

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The glob­al ecosys­tem of PCCs in bio­phar­ma­ceu­ti­cal R&D has sig­nif­i­cant­ly in­creased in size over the past 10 years at a con­sis­tent pace, with 75% found­ed since 2007.²

First, the vol­ume and com­plex­i­ty of the PCC land­scape have grown rapid­ly, which has lim­it­ed full vis­i­bil­i­ty for bio­phar­ma­ceu­ti­cal R&D ecosys­tem play­ers. In ad­di­tion to not be­ing ful­ly aware of all the PCCs that ex­ist, we be­lieve R&D lead­ers may strug­gle with how best to align the ob­jec­tives of the PCC or­ga­ni­za­tion it­self with their com­pa­ny’s own strate­gic ob­jec­tives – mak­ing it dif­fi­cult for these lead­ers to de­ter­mine which PCCs to join.

Sec­ond, bio­phar­ma­ceu­ti­cal com­pa­nies may not be able to ful­ly un­der­stand the dif­fer­en­ti­at­ing fac­tors be­tween each PCC, due to lack of trans­paren­cy in their in­di­vid­ual scope, val­ue cre­ation and op­er­at­ing mod­el. There is of­ten a lack of vis­i­bil­i­ty in­to key in­sights that would ex­plain how the PCC will sup­port an R&D or­ga­ni­za­tion’s strate­gic ob­jec­tives, in­clud­ing what the PCCs are in­vest­ing in; their cross-func­tion­al gov­er­nance struc­ture; and if they have a struc­tured com­mit­ment to knowl­edge-shar­ing.

The com­bi­na­tion of these two fac­tors across the PCC land­scape – lack of land­scape vis­i­bil­i­ty and dif­fer­en­ti­a­tion – in­crease the risks for com­mit­ment to a PCC and make it dif­fi­cult for both bio­phar­ma­ceu­ti­cal com­pa­nies and the PCC or­ga­ni­za­tion it­self to know where to in­vest to­geth­er ver­sus on the in­di­vid­ual com­pa­ny ba­sis.

To ad­dress this com­pli­cat­ed sit­u­a­tion, the PRISME Fo­rum and Ac­cen­ture joined forces to con­duct in-depth re­search of the R&D PCC land­scape. More than 400 life sci­ences col­lab­o­ra­tions were iden­ti­fied through re­search of pub­licly avail­able da­ta; more than 160 of these were R&D PCCs, de­fined as an ac­tive, mem­ber-based PCCs with more than five legal­ly dis­tinct life sci­ence en­ti­ties (con­tain­ing a min­i­mum of one bio­phar­ma­ceu­ti­cal com­pa­ny); open for oth­ers to join; with a pri­ma­ry fo­cus on bio­phar­ma­ceu­ti­cal R&D; and op­er­at­ing with a pri­ma­ry goal of pre-com­pet­i­tive­ly ad­dress­ing a chal­lenge (or chal­lenges) com­mon to many. Each of these R&D PCCs were in­di­vid­u­al­ly con­tact­ed and 53 par­tic­i­pat­ed in an on­line sur­vey and/or 1-hour phone in­ter­view to ad­dress 70+ ques­tions re­lat­ed to the land­scape vis­i­bil­i­ty and dif­fer­en­ti­a­tion fac­tors.

De­spite the ‘pre­c­om­pet­i­tive’ in­tent of these col­lab­o­ra­tions, many al­so fo­cus on³ the more com­pet­i­tive parts of the val­ue chain, in­clud­ing Clin­i­cal (59%), Pre­clin­i­cal (50%), and Dis­cov­ery (47%).  Sur­pris­ing­ly, not many R&D PCCs cov­er more reg­u­lat­ed parts of the val­ue chain, such as Reg­u­la­to­ry Af­fairs (18%), Phar­ma­covig­i­lance (10%) and Med­ical Af­fairs (4%).

Based on these da­ta, we be­lieve there is ad­di­tion­al col­lab­o­ra­tion po­ten­tial to be re­al­ized across the en­tire R&D val­ue chain – par­tic­u­lar­ly with­in reg­u­la­to­ry, phar­ma­covig­i­lance, and med­ical af­fairs.

 Al­though many bio­phar­ma­ceu­ti­cal com­pa­nies are in­creas­ing­ly fo­cus­ing their R&D ef­forts to few­er ther­a­peu­tic ar­eas (TAs; each of which may pose their own unique chal­lenges), 60% of R&D PCCs are not fo­cus­ing on spe­cif­ic TAs, but in­stead ad­dress TA-ag­nos­tic chal­lenges. For those PCCs that do fo­cus on a spe­cif­ic TA, most are con­cen­trat­ed in on­col­o­gy, cen­tral ner­vous sys­tem, and im­munol­o­gy.

From a dif­fer­en­ti­a­tion per­spec­tive, one would ex­pect that the more fo­cused an R&D PCC’s mis­sion, vi­sion and re­lat­ed ini­tia­tives, the more like­ly it is to be able to dif­fer­en­ti­ate it­self from oth­er PCCs, cre­ate unique val­ue for its mem­bers and the in­dus­try, and cap­i­tal­ize on its strengths. How­ev­er, we found 85% of PCCs fo­cus on two or more fun­da­men­tal­ly dif­fer­ent ini­tia­tive types (e.g. da­ta shar­ing, stan­dards de­f­i­n­i­tion, etc.) and 53% lack gen­er­al aware­ness of oth­er PCCs that may be work­ing on sim­i­lar ini­tia­tives. To­geth­er, these fac­tors make it more dif­fi­cult for bio­phar­ma­ceu­ti­cal com­pa­nies to un­der­stand an in­di­vid­ual PCC’s val­ue propo­si­tion and dif­fer­en­ti­a­tion.

In ad­di­tion, 84% of PCCs re­quire cash and/or re­source in­vest­ment in re­turn for mem­ber­ship, while at the same time many bio­phar­ma­ceu­ti­cal com­pa­nies seem to lack an over­ar­ch­ing strat­e­gy and as­so­ci­at­ed gov­er­nance for PCC in­vest­ments.⁵ In­di­vid­ual func­tions with­in bio­phar­ma­ceu­ti­cal com­pa­nies are of­ten free to par­tic­i­pate in PCCs of their choos­ing, con­tin­gent on­ly on avail­abil­i­ty of bud­get, with­out mea­sur­ing val­ue cre­ation/re­turn on in­vest­ment or co­or­di­nat­ing across func­tions. In­ter­nal si­los and/or a lack of vis­i­bil­i­ty in­to in­ter­nal in­vest­ments in PCCs can al­so mean pos­i­tive syn­er­gies be­tween ini­tia­tives may be over­looked, such as lever­ag­ing out­puts from PCCs that com­ple­ment each oth­er. In ad­di­tion, lack of strat­e­gy and gov­er­nance with­in the bio­phar­ma­ceu­ti­cal com­pa­nies can al­so lead to in­ap­pro­pri­ate or in­con­sis­tent shar­ing of in­ter­nal da­ta with PCCs.

Al­though the ma­jor­i­ty of R&D PCCs re­quire mem­ber­ship in­vest­ment, many strug­gle to de­liv­er val­ue that is mea­sur­able. On av­er­age, 61% of PCCs be­lieve that they are large­ly com­pe­tent at iden­ti­fy­ing new ar­eas for col­lab­o­ra­tion, mo­bi­liz­ing/ex­e­cut­ing new ini­tia­tives, and rolling out de­liv­er­ables. How­ev­er, many are not op­er­at­ing in a way that is fo­cused on val­ue cre­ation mea­sure­ment, with on­ly 19% mea­sur­ing up­take of out­puts. This makes it even more dif­fi­cult for both the bio­phar­ma­ceu­ti­cal com­pa­nies and the PCCs to de­ter­mine what val­ue is cre­at­ed – there­by di­min­ish­ing the abil­i­ty of bio­phar­ma­ceu­ti­cal com­pa­nies to iden­ti­fy the best PCCs for in­vest­ment.

Our re­search al­so iden­ti­fied a range of sub­op­ti­mal con­di­tions that many PCCs and bio­phar­ma­ceu­ti­cal com­pa­nies are cop­ing with, which will im­pact the val­ue cre­ation of the PCC that they en­gage in. Based on our analy­sis, we iden­ti­fied four rec­om­men­da­tions for the lead­ers of PCCs that will help them in­crease their im­pact and val­ue:

1. En­sure Your PCC’s Fo­cus. PCCs with a clear fo­cus and scope (i.e., cov­er­age of a se­lect­ed area of em­pha­sis) are more like­ly to gen­er­ate im­pact for their mem­bers and the in­dus­try. Ques­tions: Does your or­ga­ni­za­tion have a clear mis­sion? Are its strate­gic ob­jec­tives and cur­rent ini­tia­tives aligned with its mis­sion?
2. Nur­ture Your Brand.To max­i­mize val­ue, your PCC needs to be known to oth­ers in the in­dus­try. Your lead­er­ship and mem­bers should in­vest in speak­ing at in­dus­try events, pub­lish­ing in key trade pub­li­ca­tions and rais­ing aware­ness of the pro­gram. Ques­tions: How do bio­phar­ma­ceu­ti­cal com­pa­nies learn about your PCC, its ini­tia­tives and the val­ue it cre­ates?
3. Play to Your Dif­fer­en­tia­tors. Play to your or­ga­ni­za­tion’s strengths to gen­er­ate the high­est im­pact. Iden­ti­fy any com­pet­i­tive or­ga­ni­za­tions and iden­ti­fy how yours is dif­fer­ent. Ques­tions: Is your fo­cus spe­cif­ic and dif­fer­ent enough from oth­er PCCs? If sim­i­lar, did you con­sid­er part­ner­ing or in­te­grat­ing with an­oth­er PCC? Is your dif­fer­en­ti­a­tion aligned with its key par­tic­i­pants’ ex­per­tise?
4. Man­age Your PCC Strate­gi­cal­ly. In­clude short- and long-term plan­ning with clear ac­tiv­i­ty own­ers, an ef­fec­tive gov­er­nance mod­el and op­er­a­tional sup­port (e.g. ded­i­cat­ed, skilled project man­age­ment to en­sure de­liv­er­ables are fi­nal­ized on time and on bud­get). Be fo­cused on val­ue cre­ation for mem­bers and the in­dus­try and time­ly de­liv­ery of your com­mit­ments. Ques­tions: Do you have a strat­e­gy and mul­ti-year roadmap in place? Do you mod­el val­ue cre­ation and track this across your mem­bers and the in­dus­try through up­take?

For bio­phar­ma­ceu­ti­cal com­pa­nies, we iden­ti­fied three rec­om­men­da­tions to max­i­mize PCC re­turn on in­vest­ment:

1. Align PCCs to Your Strate­gic Ob­jec­tives. Bio­phar­ma­ceu­ti­cal com­pa­nies need to de­fine their PCC ap­proach­es to meet spe­cif­ic R&D strate­gic ob­jec­tives and in spe­cif­ic R&D ar­eas and de­ter­mine how PCCs can fit in­to each of them. Ques­tions: Do the PCCs cre­ate the val­ue that you are af­ter? How does the re­source and cash in­vest­ments re­late to the fi­nan­cial ben­e­fits gained?
2. Gov­ern Your PCC Par­tic­i­pa­tion & In­vest­ments.Con­sid­er us­ing an in­ter­nal team or ex­ter­nal part­ner to in­sti­tute a stronger and cen­tral­ized gov­er­nance for new and on­go­ing PCC in­vest­ments to avoid slow leaks of mon­ey and re­source over time. Gaug­ing the ef­fec­tive­ness of PCC in­vest­ments de­mands process­es that track and mea­sure val­ue from all ex­ter­nal part­ners, in­clud­ing the PCCs, and ad­just spend com­mit­ments based on progress and re­turn on in­vest­ment. Ques­tions: How are the PCC par­tic­i­pa­tion-re­lat­ed met­rics track­ing? Is there on­go­ing vis­i­bil­i­ty of how oth­er PCCs re­late to cur­rent in­vest­ments made?
3. Man­age Your Da­ta & In­sights From and Across PCCs: De­fine a ro­bust ap­proach to da­ta man­age­ment. PCC par­tic­i­pa­tion en­tails in­for­ma­tion shar­ing, cre­at­ing risks re­lat­ed to core in­tel­lec­tu­al prop­er­ty. More­over, many PCCs es­tab­lish da­ta shar­ing plat­forms which – when par­tic­i­pat­ing in mul­ti­ple da­ta shar­ing PCCs – com­pli­cates the da­ta land­scape for an in­di­vid­ual bio­phar­ma­ceu­ti­cal com­pa­ny. Ques­tions:Do you know what da­ta you share with what PCC and the rules that gov­ern that shar­ing? What da­ta you can­not share else­where? Are those con­straints man­aged across func­tions?

Fol­low­ing these rec­om­men­da­tions will en­sure that both PCCs and bio­phar­ma­ceu­ti­cal com­pa­nies are able to gain val­ue from their re­la­tion­ships, both for the ad­vance­ment of a com­pa­ny’s strate­gic goals and R&D im­prove­ments across the life sci­ences in­dus­try.

Sources/Notes:

1. In­dus­try at a Cross­roads: The Rise of Dig­i­tal in the Out­come-Dri­ven R&D Or­ga­ni­za­tion (Ac­cen­ture)
2. This sta­tis­tic is based on pub­licly avail­able da­ta
3. PCCs could cov­er mul­ti­ple parts of the val­ue chain in which case they were count­ed for each part
4. This sta­tis­tic is based on a com­bi­na­tion of sur­vey da­ta and pub­licly avail­able da­ta
5. Based on Ac­cen­ture in­dus­try ex­pe­ri­ence; not a re­search find­ing

Au­thors: Nicole Co­hen, Man­ag­ing Di­rec­tor, Ac­cen­ture – Life Sci­ences; Nicole van Pop­pel, Se­nior Man­ag­er, Ac­cen­ture Strat­e­gy – Life Sci­ences; Ash­ley Schwal­je, Man­ag­er, Ac­cen­ture Con­sult­ing – Life Sci­ences