S&E Strategies: Biotech Success Case Study

Search and Evaluation (S&E) leaders from some of the largest pharma companies joined moderator Stephanie Oestreich, CBO of Galecto Biotech, on a panel that focused on two main themes: the current dealmaking market and top pharma wish lists and how S&E teams work with (or not with) their corporate venture arms.

Khatereh Ahmadi, Head of S&E BD for Europe and the Middle East at MSD, kicked things off by indicating the importance of partnerships to her company. “We rely heavily on external innovation to build our pipeline,” she said, “I think more than 60% of our pipeline is derived from collaboration.” She encouraged biotechs reaching out to partner with MSD to focus their pitch on the data and the science. The size of the market and the commercial possibilities are something that MSD already understands deeply, she said. Decks should focus on data and highlight any challenges on the horizon.

Hugh Nuthall, Senior Director of S&E at Eli Lilly and Company, agreed that it’s all about the science. He urged biotechs to focus on three areas in their pitches to Lilly: explain the target rationale, what is known about the therapeutic effect, and how the project will move forward in the clinic. Biotechs should explain to S&E teams what is known and what still needs to be discovered, something that Friedemann Janus, SVP of Open Innovation and Divestitures at Bayer, also endorsed.

Come with fascinating science, Friedmann said, not with a sales pitch. Bayer’s partnering models are very flexible and even extend to making complete acquisitions where the acquired company remains independent and at arm’s length from Bayer management. Boehringer Ingelheim (BI) SVP for Global BD&L, Detlev Mennerich, said his company favored deals with first-in-class assets, noting that 75% of the BI pipeline consists of first-in-class assets.

Quizzed on how S&E teams work with their respective corporate venture capital (CVC) arms, Mennerich and Ahmadi suggested that the two did not work closely together. At BI and MSD, the two teams are separate groups and do not share information about their targets. Mennerich admitted that if a biotech that the BI CVC group has invested in is maturing to the point that the S&E team would be interested, there might be a phone call. Still, a competitor is just as likely to buy a BI CVC play.

At Eli Lilly, things are different, and the S&E team can work closely with the CVC group. “We flag things for each other,” said Nuthall. He added that Lilly’s CVC group has offices in many different regions worldwide as their interests are truly global, including making investments into third-party biotech funds.

But Janus’ explanation of Bayer’s S&E/CVC approach had the greatest impact. The S&E team remains focused on filling gaps in the pipeline while the CVC team, Leaps by Bayer, sets their sights on ‘moonshots.’ These are “a little bit crazy,” said Janus, but if these venture bets pay off, they can change the world. Leaps by Bayer initially funded some of Bayer’s cutting-edge cell and gene therapies. It’s a point of pride for Janus that his company is willing to make those sorts of bets.