Exubera shows the importance of having an exit strategy
Pfizer has announced that it will drop Exubera, its poorly selling inhaled insulin developed in partnership with Nektar Therapeutics. Unfortunately a tough business orientated decision was turned into something akin to an alliance manager's worst nightmare. It seems that something went badly wrong in the communication between the partners with Nektar Therapeutics claiming that it only learned about the decision from Pfizer's press release.
This led Morgan Stanley analyst Jami Rubin to write in a research note that she was surprised at how Pfizer delivered the news to Nektar: "Such tactics can't be good for your 'partner of choice' reputation." Other analysts, bloggers and journalists have followed Ms Rubin's line.
So why the breakdown in communications? Pfizer's explanation, again communicated in a press release, was that it had withheld the news from Nektar because the announcement contained material financial information related to Pfizer's quarterly earnings. On the face of it this explanation for the lack of communication seems a bit odd. Pfizer has dozens of alliances that are financially material and the company must be making decisions about those alliances on a daily basis. Effective communication is at the very heart of managing alliances and we would hope that they have a well-developed communication strategy with partners that balances the need to keep partners in the loop with the three month reporting cycle.
Of course it is quite possible that an executive somewhere within Pfizer made a decision about managing the exit and that there was nothing that the alliance management team could do about it except watch with horror. Or it may be that the relationship between Pfizer and Nektar had broken down to such an extent that there was no communication between the parties. It happens.
Whatever facts lie behind the breakdown in communication the events do show the importance of having a well thought out exit strategy and a strategy for handling the situation where the relationship breaks down to such an extent that the parties start trading accusations in public. For instance, which journalists and bloggers do you focus on and who handles the interviews? How are other partners to be handled? Whichever way the exit and disaster strategies are formulated communicating with partners by press release is not a good strategy.
Similar articles
AstraZeneca's acquisition of Medimmune
Reducing alliance risks
The impact of alliances on share prices
The impact of cultural factors on alliance performance
The key drivers of alliance formation
The impact of conditional payment mechanisms on alliance outcomes
Learning from game theory
Procter and Gamble relies on collaboration to drive innovation
Balancing control and trust in alliances
Using balanced scorecards as a tool for partnership analysis
The impact of large alliances on share prices
Alliances drive the hunt for clean energy
Getting to the bottom of alliance failure rates
TAGS: Alliances Exubera Nektar Partnering Pfizer || Post to del.icio.us 
|| Mail us about this analysis 
