5 tips for creating effective biotech partnerships

The J.P. Morgan Healthcare Conference is like the Olympics for biotechnology entrepreneurs. Every January, small companies with big ideas go for the gold: the chance to see their innovation, hard work, and talent recognized and rewarded with the resources they need to move forward.

As the show kicks off, entrepreneurs naturally focus on how to win the attention of major players who can offer the capital, scientific expertise, and development experience it takes to turn a promising innovation into a successful medicine — or, better yet, to completely change the way the industry thinks about therapy.

As someone who led small private and public biotechs before joining Genentech to focus on partnerships, I’ve been on both sides of such budding relationships. Here are some thoughts on how to build a truly effective partnership.

Know what to work on. Before you even start to think about partnerships, you have to decide which molecule or scientific path to pursue. It may sound trivial, but it’s the first and most important decision that startup investors and CEOs make, and often it’s not thought through as deeply as it should be. In oncology, for example, there are classes of medicines with multiple therapeutics already in the marketplace and many more undifferentiated molecules in development, yet startups continue to work on these slight variations of existing medicines.

There may be economic reasons to join the fray but, in my opinion, developing slight variations on an existing theme is not sound corporate or scientific strategy. The best biotech companies don’t follow what’s already being worked on by others, but rather take novel approaches and thoughtful risks to force the industry to take notice. That’s what Kite Pharma and Juno Therapeutics, for example, have done with CAR T-cell therapies for cancer.

Plan to partner. Virtually everyone has to partner. The reality of our business is that 9 in 10 prospective therapeutics that enter clinical development fail to reach the marketplace. The capital market eventually will not tolerate the risk of a small company operating alone with perhaps one or two programs. At the other end of the spectrum, most large companies, just by virtue of their size and fitness, become risk averse and unadaptive. Smaller innovators force these large companies to adapt in order to survive — it’s a wonderful symbiosis. The relevant questions then become when to partner, with whom to partner, and how to structure the arrangement.

Stay attuned. Great partners are always aware of what the other party really needs in order to thrive. Think Ginger Rogers and Fred Astaire. John Lennon and Paul McCartney. Or Genentech founders Herb Boyer and Robert Swanson, who came from different worlds but shared a vision for the potential of recombinant DNA technology. The word I use for this kind of compatibility is “attunement.”

In a biotech partnership, it’s essential that the larger company be attuned to what the startup needs to succeed, and vice versa. Each partner must get to know the other company, its scientists, its culture, and its business model. Once that is accomplished, they can work together in very open ways to formulate the best kind of partnership.

Genentech’s partnership with BioNTech, a German company developing personalized cancer vaccines, is an example of this. We recognized the scientific brilliance of what they were thinking, and they recognized our entrepreneurial spirit and experience in taking big leaps to successfully develop and launch transformative medicines in oncology. Genentech couldn’t have entered this field on its own — it isn’t a vaccine company.

When we decided to partner with BioNTech, it was through a finely balanced cooperative effort crafted to develop these personalized therapies that included close collaboration on manufacturing and development in order to understand the best way to implement this incredibly exciting technology.

We created the partnership this way because Genentech understood BioNTech’s desire to continue contributing its own expertise in personalized cancer vaccines and to partner with the development, manufacturing, and commercialization power that our company has.

Meld science and art. Partnerships have both science and art components. The science part is predominantly analytical. For the larger company, this means looking back and asking if this kind of deal has succeeded in the past. If it compares favorably, it is worth pursuing.

The artistic part is harder to define. Attunement is part of it — you must be highly attuned to what the other partner wants. Clarity is also important. Each partner must make sure it is clear about what it wants and articulate that.

And then there is something I call buoyancy, which boils down to keeping your enthusiasm in the long run. My team looks at more than a thousand different opportunities every year and ends up doing somewhere between five and 15 deals. You have to keep your excitement high and your attitude afloat as you sail through that sea of deals that don’t work out, or you’ll never reach those successful partnerships. For the smaller company, the challenge is to stay focused and optimistic knowing that the odds are stacked against even your best ideas.

Push the envelope. The best partnerships aren’t the ones that follow the pack. Instead, they are the ones that force the industry to change the way it thinks about developing new therapies. There are opportunities to do this by identifying new targets through basic cell biology or genetics. Good examples of this approach include mutations in the PCSK9 gene that cause a drop in cholesterol or in the gene for the Na_V1.7 sodium channel that causes insensitivity to pain. Companies that take novel insights and run with them to develop early-stage therapeutics can be attractive partners.

In my mind, excitement also comes from companies that are developing new ways of attacking diseases. That’s been done with antibodies and antibody-drug conjugates in the past. We’re now seeing the first generation of CAR T-cells reach the market, which is just the beginning for cytotherapies. Therapies that target the microbiome are coming up fast, and they have implications not only for gastrointestinal diseases but also for cancer immunotherapy. Viral therapies, CRISPR, personalized cancer vaccines — all of these are areas for potentially transformative therapeutics, something we should all be striving for.

James Sabry, M.D., is senior vice president and global head of partnering at Genentech.