THANK YOU FOR SUBSCRIBING
Pharma Tech Outlook | Wednesday, August 10, 2022
Scientific due diligence is the key element for successful partnerships. Following a few critical criteria will result in optimum scientific due diligence outcomes for the seller and buyer parties.
FREMONT, CA: Effective planning for partnering, mergers, and acquisitions must be carried out accurately to prepare scientific, technical, and regulatory information on complex therapeutic products. The seller is responsible for gathering information, but the purchaser must concentrate to evaluate the opportunities. Assessing the possibilities of a collaboration or licence deal is best thought of for biotech firms and academic developers as scientific due diligence. Due diligence should effectively ensure that both parties receive what they expect. Biotech firms that want to consider a merger and acquisition, collaborating agreement, or licensing products or technology platforms should present their assets to potential partners and equity providers.
Stay ahead of the industry with exclusive feature stories on the top companies, expert insights and the latest news delivered straight to your inbox. Subscribe today.
An Invaluable Resource
The primary focus of academic researchers is to create scientific knowledge from their research. However, converting this knowledge into commercial biopharmaceutical products is not their crucial skill set. The experience and resources of larger pharmaceutical companies are invaluable in the late-stage drug development, authorization, and commercialization processes for advancing biotech firms and academic developers. Such small-scale companies face several issues of product uptake and launch value during their first product launch. It is reported that the medium first-time launcher reaches just 63 per cent of expectations, as against the 93 per cent for the experienced equivalent.
However, partnerships can accelerate the success rate of EMA marketing authorization applications, with the entire company's acquisitions having a greater success rate than product acquisitions or partial licence agreements. Therefore, collaboration with larger companies is an effective strategy for smaller companies to introduce new products to the market.
It is Never Too Early to Start
There is an increased need for due diligence, which is visible in the growing number of agreements made. Therefore, both academics and early-stage biotech companies need to be prepared for this. Smaller biotech companies will have to consider a merger, acquisition, partnership, or next investment at any given time. Therefore, it is not too early for such companies to plan and prepare a convincing case for new and existing investors.
Academics possess a different culture as compared to biotech startups. Academic arena: emphasis on scientific achievements and publishing to maintain higher funding. The focus on readiness for due diligence and documentation relating to partnership or funding is less. Although most universities have technology transfer offices, the time or knowledge to prepare a comprehensive scientific due diligence package to prepare the asset for partnering is lacking.
It is common to underestimate the significant effort required to prepare for due diligence, especially on the seller's side. Small businesses naturally tend to concentrate on ongoing operations. There are situations when not enough time is allotted for effective due diligence preparation.
Due diligence is not just a one-time event. To complete a deal, a seller may need to undergo up to 10 due diligence reviews by interested parties. Therefore, research and development plans, including reports, should be prepared for due diligence readiness. Moreover, external parties should be able to evaluate raw data. Programs must also follow GxP guidelines to translate academic research into biopharmaceutical drug development. Smart start-up businesses consider these needs when setting up their operational and governance systems.
More in News