NEUROGEN CORPORATION

Alliance Management: View from the Smaller Side of the

Alliance

Thomas A. Pitler, Ph.D.VP Business Development

Alliances often fail because partners are unable to work together effectively

30%

6%

64%

Foremost Cause of Alliance Failure

Poor or Damaged

Relationships Between Firms

Bad Legal and Financial Terms and Conditions

Poor Strategyand Business Planning

Common Causes for Relationship Issues

›Breakdowns in trust

›Build-up of negative partisan perceptions

›Questioning of one another’s motives

›Festering conflicts

›Little joint problem solving

›Feelings of disrespect/coercion

›Missed milestones

›Lack of learning/innovation

›Project delays

›Dissatisfaction with partner’s performance

›Unresponsiveness to changes in the market place

›Perception that alliance is not adding value

“Absent Facts People Make up Stories”

Launching Alliance Relationships: Key Objectives

Enabling Skills Enabling Skills and Mindsetand Mindset

•A common set of experiences and mindset for effectively working together

•Building personal relationships through face-to-face interaction and fun activities

Alliance Work Alliance Work planplan

•Defining a joint work plan for scientific and commercial activities

•Clearly understood roles and responsibilities, timelines and priorities

Relationship Relationship Challenges Challenges

and and protocolsprotocols

•A common understanding of key challenges

•A set of procedural agreements that define the basic operating assumptions for working together

•Collaborative conflict resolution methods and escalation procedures

•Standard relationship audit

Contractual Contractual CommitmentCommitment

•A clear understanding of the negotiated agreement

•A shared picture of all parties’ scientific and business goals for the arrangement

Launching Alliance Relationships: Key Objectives

Enabling Skills Enabling Skills and Mindsetand Mindset

•A common set of experiences and mindset for effectively working together

•Building personal relationships through face-to-face interaction and fun activities

Alliance Work Alliance Work planplan

•Defining a joint work plan for scientific and commercial activities

•Clearly understood roles and responsibilities, timelines and priorities

Relationship Relationship Challenges Challenges

and and protocolsprotocols

•A common understanding of key challenges

•A set of procedural agreements that define the basic operating assumptions for working together

•Collaborative conflict resolution methods and escalation procedures

•Standard relationship audit

Contractual Contractual CommitmentCommitment

•A clear understanding of the negotiated agreement

•A shared picture of all parties’ scientific and business goals for the arrangement

RACI matrices provide a useful tool to ensure that all stakeholders are aware of their role in any decision

Responsible: The individual(s) who performs a task. The doer, responsible for recommendation, action and implementation.

Accountable: The individual (s) who is accountable for ensuring alignment with the overall plans and ensures the quality/ performance/ outcome of the activity.

Consulted: The individual(s) who are asked to provide input and/or insight prior to an action being taken or a recommendation being made.

Informed: The individual(s) who need to be informed when an action is taken or a decision is made but does not need to be consulted.

ALLIANCE MANAGEMENT WORKING GROUPDecision making roles and responsibilities

Decision Responsible Accountable Consulted Informed

Financial reporting -unanticipated funding (e.g. FTE #, 3rd party exp.)

Project leaders

JRC P-Functional

heads

N-EMC P-

Functional heads

Project team

Finance

Communication of structural changes to the organization (e.g. reorganization which could materially impact project)

JRC Committee

Chairs N-Rep

P-Head of Licensing

N-CEO

P-Corp. Licensing

N- Bus Dev

Other party

Filing patents for new inventions (e.g. timing, competitive strategy, etc.)

Patent attorneys

JRC Patent dept

Project leaders

P- Corp. Licensing

N- Bus Dev

Press releases (e.g. milestone achieved, compound failed, compound progression)

N- Bus. Dev.

P-Corp. Licensing, Public Affairs

N-CEO P- Legal

N- EMC P- Public

Affairs Project

Leaders JRC

ROW N- Board

Relationship Survey: Quantitative Results

Questions Average Responses

  Neurogen Partner

Operational Metrics

1 - Roles and responsibilities are clearly defined 5.31 4.80

2 - The work plan is well defined 5.31 4.93

3 - We have a clear understanding of what needs to get done and by when 5.08 4.80

4 - We are coordinating effectively across multiple functions, sites and geographies 5.25 4.47

5 - Decision making is efficient 5.25 4.38

6 - Decision making is effective 5.17 4.79

7 - All necessary information for decision making is communicated from the project team to the governance committee 5.33 4.75

8 - Decisions are well communicated from the governance committee to the project team 5.10 4.60

9 - We are focusing our attention on those things that will help us meet our overall goals 5.17 5.07

10 - We have met all contract and work plan objectives on time 5.30 4.58

11 - We are on track to meet future contract, work plan objectives on time 5.20 4.83

12 - Each party is resourcing the collaboration appropriately for effective execution of work plan 5.09 4.40

Quantitative Results con’t

Relationship Metrics

14 - We have a positive, successful working relationship 5.58 5.29

15 - We are working together in accordance with operating protocols 5.36 5.00

16 - When we disagree, we discuss and resolve the issue based on relevant, objective criteria 5.11 4.91

17 - My ideas, input are welcomed and considered by our partner 5.25 5.15

18 - We have access to info, data, updates as needed 4.67 3.85

19 - Information and data are volunteered, shared in open and transparent manner 5.27 4.79

20 - When we have specific questions, we are able to contact and get a timely, appropriate answer from our direct counterpart(s) 5.27 5.00

21 - Our meetings are a good use of my time - we are clear about purposes, participation and outcomes 5.18 4.17

Quantitative Question Results – Radar Chart

OperationalRelationship

6 5 4 3 2 1 0

Strongly Agree

Strongly Disagree

No Opinion

Rating Scale

Neurogen-Partner Alliance Health

0

1

2

3

4

5

6

Roles

Planning

Team Coordination

Decision Making

Performance ManagementResources

Relationship Strength

Conflict Management

Communication / Openness

Neurogen

Partner

NEUROGEN CORPORATION

DRUG DISCOVERYPRODUCT

DEVELOPMENT

NEUROLOGICAL DISORDERS

PAIN

METABOLIC DISEASES

INFLAMMATION