Strategic Partnering = Strategic Synergy

Joanne F. Gucwa

Coupling information technology with biotechnology results in bioinformatics, a discipline that enables the conversion of huge amounts of genomic data into practical pathways for drug discovery...synergy because it produces something that neither technology could accomplish easily by themselves. So too, forming alliances with strategic partners -- partners that can help you reach your business goals -- can produce business value that exceeds the value of the individual parties (strategic synergy). Here are just some of the reasons to consider strategic partnering.

Even the largest companies, such as Pfizer, partner with smaller firms to conduct very targeted R&D. This minimizes the costs and risks of the big company trying to develop a similar level of expertise themselves.

Larger companies support smaller firms by contracting with them to conduct R&D. Sometimes funding comes from financial sources such as venture capitalists, angels or even government or private grants.This funding has numerous advantages for smaller firms, including:

  1. Skilled job creation and keeping skilled workers
  2. Increased economic value to the local community
  3. Generating "intellectual capital" to benefit society

Sometimes larger companies take an equity position in the smaller companies, bringing the smaller entities not only funding, but access to management and other expertise.

Focusing on core competencies and outsourcing activities that others excel at releases funds for marketing and reduces costs. For example, Roche outsources some of its manufacturing to contractors. Process Firms Must Deconstruct For Supply Nets

Many biotech products are co-developed, with the smaller company often providing R&D and the larger one market access through their well-established sales forces. Others develop co-promotional licensing strategies, such as Amgen and Kirin. (Pg. 27 of pdf file below)

Finding a manufacturing partner in a foreign country is another means of accessing a biotech market.

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