A rough guide to pharma partnership deals

We’re seeing a lot of biopharma partnership deals in the current stage of the coronavirus research efforts. And while some of these are business as usual, some of them aren’t. Here’s a rough field guide to how these tend to work. 

One standard type of deal is when a small company partners up with a larger one. That’s generally because the smaller one has some compound, technique, or platform that they own, but that they don’t have the resources to take it forward. In this business, that often means the advent of human clinical trials. Those are never cheap, but in some therapeutic areas they can be disorientingly expensive, suitable for only the largest players to take on.

Manufacturing is another area that most smaller companies will think hard about before investing in: you’re taking on a lot of fixed costs and a lot of (immediately depreciating) equipment, in many cases for a product you haven’t even properly launched yet. It can be a better use of the money to have someone else deal with all that (and the packaging, shipping and so on). Even further downstream is the sales force, and while persuading people and organisations to buy them is not really a consideration with coronavirus vaccines, it’s very much something to think about under more normal conditions.