SPI USA, Inc. 4,5/4,5 CM Introducing a Way of Thinking About the Process of Partnering Asking the right questions By Elia Cossis Your Partner for Innovation

SPI USA, Inc.

4,5/4,5 CM 4,5/4,5 CM 4,5/4,5 CM 4,5/4,5 CM

Introducing a Way of Thinking About the Process of Partnering

Asking the right questions

By Elia Cossis

Your Partner for Innovation

SPI USA, Inc.5523 Research Park Drive, Suite 325Baltimore, MD 21225Phone: 443.543.5530E-mail: [email protected]


Partnerships

Partnership building needs to be among the core competencies of any company that wants to grow

There are 11 basic steps for navigating the twists and turns of partnering

• These steps are not in lockstep


Step 1: Ask: What Do I want?

Step 1: Ask: What Do I Want?

Is it to:

Leverage intellectual property?

Bring strategic, operational and financial benefits?

Enhance access to technologies?

Reducing investment exposure?

Increase R&D funding?

Commercializing products or technologies?


Step 2: Don’t Forget Your Strategic Plan

Step 2: Don’t Forget Your Strategic Plan

Once the basic questions are asked in step 1, the temptation will be to move straight to researching potential partners. But several steps must come first

First review your strategic plan and analyze how partnering fits into it

What are the goals and plans you have set for your company?

Will partnering advance them?

Are there elements of a potential deal that under the strategic plan are non-negotiable?

Are they realistic?

In some cases, simply contemplating a possible partnership will lead companies to reconsider their basic business strategies


Step 2: Don’t Forget Your Strategic Plan [cont.]

Step 2: Don’t Forget Your Strategic Plan [cont.]

Once you’ve figured out how a partnership fits with your strategic plan, the next objective should be to develop a partnering strategy

A well planned and executed strategy will include a thorough assessment of the commercialization potential of the partnership and development of the available strategic positioning options

Remember: The important goal isn’t to make a partnership. The important goal is to advance the business.


Step 3: Develop and IP Management Strategy

Step 3: Develop and IP Management Strategy

In most cases, the core of a partnership is allowing another company to have some level of access to your intellectual property (IP)

It will be essential to have a system in place to monitor the use of IP and track licensing, royalties, and collaboration projects

The best time to develop an IP management strategy and the necessary infrastructure is at the beginning of the partnership process


Step 4: Assess the Commercialization Potential

Step 4: Assess the Commercialization Potential

Once a plan is developed to manage the portfolio of IP, the commercialization potential of the IP must be determined

You must evaluate internal and external factors. For example:

External factors include:

Market need

Market size

Market competitors

Internal factors include:

Development potential

Allocation of resources

Probability of success estimates based on historical programs


Step 5: Evaluate Your Portfolio

Step 5: Evaluate Your Portfolio

Once the commercial value of a particular asset/program/IP is understood, its position relative to the broader IP portfolio should be evaluated

Understanding the strategic position within the portfolio will help to prioritize individual programs objectively, and best utilize partnering/licensing resources in a constrained environment

Strategic positioning options should be ranked, and relative strengths, weaknesses, opportunities and threats assigned to each asset/program/IP


Step 6: Gather and Analyze Data

Step 6: Gather and Analyze Data

Once the IP positioning is complete, careful data-gathering and analysis should occur, in order to understand the financial, strategic and operation value to a potential partner

Key things to look at are:

• Customer adoption

• Target pricing

• SWOT analysis

• Anticipated revenue

• Profitability and Net Present Value under various partnership models

• Assessment of the impact on the potential partner’s financials


Step 7: Identify and Prioritize Key Partners

Step 7: Identify and Prioritize Key Partners

Once the IP is positioned and analyzed, valued potential partners should be identified and prioritized

The first round of research usually turns up a large pool of potential candidates. After a more structured screening and selection process a large number of the initial companies identified are a loose fit

Factors that go into screening include critical factors such as:

• Past experience commercializing and marketing products

• Particular areas of technology

• Past level of commitment to other alliances and/or partnerships

• Financial records


Step 7: Identify and Prioritize Key Partners [cont.]

Step 7: Identify and Prioritize Key Partners [cont.]

Next, a contact strategy should be created

This involves creating a communications and marketing plan to effectively approach key contacts at the companies

Factors including corporate culture, introductory position, and approach should be considered before initiating contact with potential partners


Step 8: Develop Presentation Collateral

Step 8: Develop Presentation Collateral

Presentation collateral is a key component of the partnering process that serves to introduce both the partnering opportunity and the organization

A non-confidential business development brief is typically created to introduce the partnering opportunity, product/technology, and organization soliciting the business partnership

PowerPoint presentations called “Pitch Books” are typically prepared to present the product/technology, the partners involved, the rationale for the partnership and terms of agreement


Step 9: Assess Commercial Interest and Attractiveness

Step 9: Assess Commercial Interest and Attractiveness

With the marketing tools prepared, the next step is to initiate initial contact with the identified partners

Initial contact can be made via phone, email, mail, or through in-person appointments

In the initial presentation, the pitch book is presented, whereby the value proposition and alignment of intellectual property with commercial potential is made

Both parties then evaluate the attractiveness and feasibility of the partnership

Evaluate a preliminary go/no go decision


Step 10: Finalize the Partnership Model

Step 10: Finalize the Partnership Model

The first steps involve a period of in-depth valuation. At this stage, preliminary forecasts of financial returns from the commercialization partnership are prepared

Forecast valuation analyses of the technology or product are finalized, and a period of active due diligence is initiated

Provided the due diligence process moves to a partnership stage, final arrangements are made to finalize details and establish a partnership


Step 11: Understanding Partnering Option

Step 11: Understand Partnering Options

There are several types of partnership options. They include:

1. Collaborative Marketing

2. Licensing Agreement

3. Collaborative Development

4. Minority Investment

5. Joint Venture

6. Merger/Acquisition


Step 11: Understanding Partnering Option [cont.]


Review

Review:

1. Ask: What do I want?

2. Don’t forget your strategic plan

3. Develop and IP management strategy

4. Assess the commercialization potential

5. Evaluate your portfolio

6. Gather and analyze data

7. Identify and prioritize key partners

8. Develop presentation materials

9. Assess commercial interest and attractiveness

10. Finalize the partnership model

11. Understand partnership options


Reference

Biopartnerships magazine. October 2005 issue. Pages 18-23


USA Inc.

5523 Research Park Dr., Suite 325

Baltimore, MD 21228

Tel: +1 443 543 5530

Fax: +1 443 543 5533

[email protected]

www.usaspi.com

[email protected]

SPI USA Contact Information

California

USA – Irvine 2102 Business Center Drive, Suite

220E

Irvine, CA 92612

Tel: +1 949 253 5702

Fax: +1 949 253 5703

[email protected]

Baltimore

Documents

SPI USA, Inc. 4,5/4,5 CM Introducing a Way of Thinking About the Process of Partnering Asking the right questions By Elia Cossis Your Partner for Innovation