A new survey of pharmaceutical and biotechnology executives finds that business development efforts require input and participation from more functional groups than most other strategic activities.

“Pharmaceutical Business Development and Licensing” reports that 84 percent of companies either have dedicated business development groups in place or are currently building a dedicated function. Responsibility and authority is more centralized in such a structure, but these groups actually pull in help from many other groups to thoroughly vet licensing deals.

“In a relatively short period of time, a team must determine not only whether a deal is a ‘win,’ but also more beneficial than other options,” said Adam Bianchi, chief operating officer at Cutting Edge Information. “This decision may involve looking at the product from clinical, marketing, financial, and regulatory perspectives. Getting strong organizational support from so many different voices can be an intensive process.”

For out-licensing partners, this is often a make-or-break strategic decision; for example, deciding whether the company should take an offer with less upfront money to partner with a company it deems more dedicated to the product’s success. For in-licensing teams, the value of a deal is often more financial, based on the likelihood that the deal will deliver a strong Return-on-Investment.

Some functions are almost always represented, while others only participate in certain types of deals. “Company size often determines who is involved in the deal-making process,” said senior research analyst Jeremy Spivey. “Large companies tend to be less likely to allow the business development group to exclude certain types of groups entirely. Small companies have more flexibility to exclude some groups if they are managing smaller deals – or deals that build upon previous partnerships.”

The study identified several common business development and licensing concerns, including:

• How do compounds fit the company’s long-term therapeutic area strategy?
• Can the partner can meet all obligations of the deal terms?
• How strong is the compound compared to other products already in the company portfolio?

For more information about research on business development teams, visit http://www.cuttingedgeinfo.com/research/portfolio-management/business-development/.