The key drivers of alliance formation
Research by Silico Research and IBM shows that two factors, the deal on offer and the scientific expertise on offer, dominate the underlying reasons senior executives in biotechnology and pharmaceutical companies enter a partnership.
This analysis draws on the data collected in two surveys conducted by Silico Research and IBM in 2003 and 2006 among senior executives from biotechnology and pharmaceutical companies.
The first survey was completed by 182 respondents and the second by 148 respondents. Both surveys asked respondents to indicate the reasons they had entered a partnership. In the first survey respondents were asked which nine possible factors were important in deciding to enter into the partnership.
The questions were framed as binomial "Yes" or "No" questions. In the second survey respondents were asked to rate eleven factors on a five point Likert scale in terms of the importance of the factor in deciding to enter the partnership, where 1 represented not very important and 5 represented very important. Respondents were allowed to enter 0 representing "Don't know" or leave the question blank. Overall the two surveys explored 25 possible reasons why senior executives in the biotechnology and pharmaceutical industry enter a partnership.
In both surveys tangible financial benefits were the key drivers of entering into the partnership. In the first survey access to capital was selected by 52% of respondents (n=129) and access to sales and marketing channels was selected by 51%. In the second survey the terms of the deal on offer from the partner was ranked as 4 or 5 by 70% of the respondents, with a mean rating of 3.90 out of 5 (n = 94) overall.
The intangible benefit of access to a partner's scientific expertise and knowledge was considered almost as important as the deal on offer in both surveys. Access to scientific expertise was selected by 44% of respondents (n = 129) in the first survey. In the second survey a partner's scientific expertise was ranked as 4 or 5 by 66% of the respondents, with an average rating of 3.69 out of 5 (n = 95). A partner's market position was ranked as 4 or 5 by 48% of respondents in the second survey, with an average of 3.14 (n = 94). This was ranked as a more appealing in deciding to enter into the partnership than say a partner's reputation as a partner (mean = 3.03, n = 94).
Few of the respondents in both surveys saw a prior relationship with key people in the partnering company as important. Just 16% of respondents in the first survey nominated a prior relationship with the partner as an important reason for entering into the partnership. In the second survey only 29% of respondents rated this relationship as 4 or 5, and gave it the lowest rating of any factor with an average rating of 2.27 out of 5 (n = 89).
Where the respondent's company previously had a partnership or had an ongoing partnership with the partner the prior relationship became more important (mean = 3.39, n = 30) although it was still less attractive than the terms of the deal on offer (mean = 3.68). Respondents evaluated fewer potential partners (mean = 3.48) where the companies had previous or existing relationships. The mean number of potential partners evaluated by respondents in the second survey was 6.79.
Where a prior partnership-based relationship existed the partner's expectations were more likely to have been met (mean = 4.00) among respondents in the second survey than where no prior partnership had existed (mean = 3.36). Overall, however, there was no statistically significant relationship between the underlying reasons for entering into the partnership and the outcome of the partnership.
BioPartnering 2006 Preferred Partners
The top five companys rated by respondents as their preferred partner.
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