Okay, now, let's talk about structuring and negotiating alliances. And like on this slide, if this is the way you are negotiating alliance and structuring them, if you can see on the bottom right corner, there is a poor pigeon that is basically not going to be ending very happily. So if you are doing it this way, you probably are not going to be successful in negotiating alliances. Alliances need to be negotiating with the mindset that everybody is going to win, otherwise everybody will lose. Let's talk about the different steps and what needs to be included. First, you need to define very clearly, the vision. What are you trying to achieve, what is the objective? And you need to be clear on what these objectives and vision are. And you need to agree from the beginning. You need to also decide very clearly how decisions are going to be made. You need to have steering committee or joint management, ultimately with the same number of people on each side of the company or the academic institution. You need to select strong leaders that are going to be able to work through difficulty, that have great, not just technical skills, but people skills as well, so they can manage the program. You need to have a sizeable committee. But there, again, you need to be careful that it's not too big, because if it's too big, you're not going to be able to make decisions. You need to decide on the frequency of meetings, and you need to assign authority to the team, to the joint team. And you have to have a tie breaker, and usually it's either the CEO of the biotech company or the head of R&D, if they is issue that are going to maybe end up negotiating and discuss if there are potential issues where the team cannot move forward. Resources are very important. Obviously, once you've agreed on the work plan, you have agreed on the research and the deliverables, then who is putting what? How much money, how much in kind, how many people are going to be assigned to the team, and at what stage and who is going to to do what? Finally, you need to really talk about ownership of IP. Is it joint ownership? You need to have a very clear partner strategy. Who is going to prosecute the intellectual property? Who is going to be financially responsible? And depending on the size of the partners, depending on if you are dealing between pharma and biotech, depending if you are dealing between academia and pharma, and so forth, that's all going to change. R&D responsibilities, absolutely essential. Detailed research plan, and I cannot emphasize that enough, it needs to be very detailed. You have to have a Gant chart, which are going to tell you, here are the go/no go decisions, everybody has to agree to what it is. You then have to agree in putting together a plan including, how many FT's or full time employee equivalent for each partner. Regulatory matters, let's not forget. And you learned this already in previous slides. Who is responsible for filing with the FDA, or the EMA, or the Japan Ministry of Health, or any other country for that matter? Who owns the file? Who pays for them? Who is representative? All these are very key to be addressed from the beginning. As you can see, the contract is going to be very big. Clinical development, same thing here, responsibilities, how they are going to be implemented, oversights, how are the impact of delay from regulatory or from sites are going to be addressed? So you have to plan absolutely almost everything, and again, this is not a laundry list, I don't want that, I that cannot give you everything you have to think of, but I just wanted to outline really, some of the key points. Same on the manufacturing side. You have to go have a think, especially if it's a new product, first-in-class. What of inventory? How much manufacturings do we need? What's the cost of goods? What's the efficiency, is going to be? And from there you're going to have to decide your pricing. Let's talk about key considerations on again, continue key considerations on the commercial side. In marketing, same thing, you have to look at who's going to be promoting? Who is going to market the drug? Which partner has which responsibilities in terms of territory? If it's together or maybe one partner is doing it on their own. Then there's many other things that you need to think about. You need to look at evaluation and the financing terms. You need to look at adverse events and reporting. You need to look at recall if the drug has to be withdrawn from market, who's going to pay for the identification? If there's going to be lawsuit, I mean you have to think about all these, that's why the lawyers coming. They're actually going to be involved very early on, your lawyer team is going to be involved. And hopefully they work together, otherwise you're never going to be able to get a deal done. You also have to look at performance criteria. And that has to be defined very clearly, so that way there is no questions as to, for example, well, it's time to IND, time to NDA and these types of things. I mentioned one of the other things you want is that they are collaborative. You definitely don't want what's happening in this picture here. Even though I think that maybe the two lions are playing, but you don't want to necessarily have confrontational negotiations, otherwise your dealing is not going to get done. Some other things you have to think about from the beginning is termination clause. We all want to get married for the best. We all want to be working together. But what if something happens? What if the strategy no longer align? What if the product just doesn't work? What if there is a change of thinking in the science? You need to think about all these from the beginning. And that's where termination clauses become very important. And you have to think about exit strategy from day one. I know usually that is very tough. When I first started doing this as a scientist, I was like, what are you talking about? We have to think about termination? We don't have a deal yet. We don't have any collaboration going on. And but on the other hand, now that I've done this a few times, I completely understand how this works. And this avoids problems later down the line. Dispute resolution is also very key. We need to talked about guarantee and financing, as well as understanding benefit allocation and dividend determination. Again your finest department is going to be very involved. So as you can see, this alliance says my start has research collaborations, but very quickly they involve everybody within your organizations including lawyers, CFO, manufacturing people, marketing people, everybody is going to have to be involved. So, that way your collaboration is truly successful. Let's talk about a few example. This is for example, swapping assets. GlaxoSmithKline, Novartis did what I call an asset swap in 2014, where Novartis provided Glaxo with their vaccine unit, and Glaxo gave their cancer treatment business. And what they did is they also creating a JV to develop consumer healthcare business. So here they realize well gee, this is my strength, I'm not that good here, I think this would be better to you guys, let's do an asset swap and see if that could work. I'm sure these deals are very tough to do, but at the same time it strengthens the company. In some cases, it's just, let's sell the business. Novartis sold its animal health business to Lilly for 5.4 billion. Another one was for example Sanofi & Boehringer Ingelheim in exclusive negotiations, where they basically were going to exchange animal heath business worth 11 billion. Boehringer was going to give their consumer health care business for 6.7 billion. And to make up the difference in value, BI was going to pay Sanofi 4.7 billion. And the asset swap is anticipated to be EPS neutral by 2017. So again as you can see here, a lot of big companies are now looking and doing this to strengthen their areas. Transforming the pipeline. This is an example of Sanofi, who wanted to transform their pipeline in immuno-oncology product. They did a deal with Regeneron to gain access to a PD-1 which is in Phase I clinical development at the time when that slide was put together. The alliance basically allowed for Sanofi to have access very quickly to compound in clinical development. That in another collaboration with BioNTech to discover and develop up to five cancer immunotherapies. And the objective is to have a very balanced pipeline between internal and external innovation. What is interesting is the study by Bain, a consulting firm, found that in the past 20 years those drug companies that consistently did well in various therapeutic areas, were earning more than 70% of the sales from products developed elsewhere. So if that doesn't tell you that strategic alliances and collaborations are important, I'm not sure what does, okay? But anyway, as you can see, and as we have seen during that presentation, companies and academic centers have understood the message, and that's why it becomes very important to understanding the entire process of making collaboration work. So let's talk a little about the challenges and success factor. Top five challenges as you can see from this slide. This is actually from a report that you have access to again and the references. And it was based in Western Europe pharmaceuticals, biotechnology or medical devices. It came from actually interviewing Head of Corporate Strategy to Head of Alliances Management. And this is what they reported. At least what this report gave us. And really it's the contribution by each partner, top five challenges, the management, the overlap of the structures. And the success factor was really the mutual trust and the strategic fit. These are extremely important. And again, along the strategic fit was the cultural fit is very key. So making sure that people can work well together is going to be absolutely essential. These are all important, and there's many more, I mean you can see in the report. Again, I just wanted to give you the top five of each one of them. So with that, once you have done the deal, the honeymoon is done, everybody is happy. But the true collaboration starts, and alliance management becomes absolutely essential, because that's what's going to make or the deal in the long term. Collaboration have to be 100% transparent, if there is no transparency and people start playing games, the collaboration will not end well. You have to keep relationship, so you have to have people in charge of basically collaborating and communicating very often and very regularly with one another. And always keeping the objective with for the strategic alliance in mind. Always going back to these objectives, and if they change, let's make sure that the objective are the same for both partners and they are aligned. That way you keep everybody on the same page. At the end of the day, to achieve successful strategic alliances, it's the chemistry just like in a marriage, between people that create and sustain a successful alliance. And like in this picture here, as you can see, a male and a female duck. They are flying together. That's basically what chemistry is all about. And with that, thank you. I'll leave you on this little cartoon here about what the true birth of science is. So don't forget to wear your lab coat, and happy alliances. Thank you.
