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Pharmaceuticals: Companies Will Focus On External Partnerships To Improve Productivity in Chemical and Engineering News, By Lisa M. Jarvis, January 14, 2013

Article:
"If the buzzword for the pharmaceutical industry in 2012 was “patent cliff,” the key theme for 2013 is “partnership.” With smaller R&D organizations and budgets, drug companies are putting more emphasis on working relationships with biotech firms or with academia.
“Everything we hear, everyone we talk to, has one word. It’s ‘collaboration',?” says Patrick Flochel, global pharmaceutical leader for the consulting firm Ernst & Young. The urge to partner is driven by a desire to share risk and lower research costs while at the same time improving productivity.
Partnerships are extending across the entire life cycle of a drug, Flochel notes, from precompetitive collaborations related to elucidating targets all the way to commercial relationships that leverage a partner’s marketing network. They run the gamut from deeper ties with academic institutions—such as Biogen Idec’s new academic consortium to identify treatments for amyotrophic lateral sclerosis—to more pacts with biotech companies and consortia with governments, nonprofits, and other drug firms.
The focus on collaboration comes as drug companies try to move beyond several years of patent expirations on some of their biggest selling products. Along with the patent losses came overhauls to drug company R&D organizations and painful job cuts. In 2013, industry observers expect, companies will focus on executing new R&D strategies. They say the worst of the pharma layoffs is likely over.
While trying to make their own research efforts more productive, companies are filling gaps in their drug pipelines through acquisitions. Merger and acquisition activity in 2013 should keep to the tone set last year: modest purchases and an emphasis on mitigating risk. Transactions will be creative, with drug firms offering less money up front but promising bigger benefits as a project reaches key milestones, notes Michael Latwis, an analyst with the health care consultancy Decision Resources.
Industry experts say big pharma companies will continue to shun megamergers like those seen in 2009. An exception may be AstraZeneca, which lost its patent for the antipsychotic drug Seroquel and was hit hard by generics competition. “AstraZeneca is in a pretty dire situation,” Latwis says. Last year, Pascal Soriot, former chief operating officer of Roche’s pharmaceutical business, took on the unenviable task of turning AstraZeneca around after the ouster in March of CEO David Brennan. Soriot “hasn’t ruled anything out yet,” Latwis notes, and industry watchers are awaiting an update on the company’s strategy that’s expected at the end of January."

Article at:
http://cen.acs.org/articles/91/i2/Pharmaceuticals-Companies-focus-external-partnerships.html