4 tips for biomedical startups looking to partner with big pharma

The feelings are mutual – While startups are eyeing tie-ups with big industry players, global pharmaceutical companies are also keen to partner startups for the next big discovery.

“There’s a reason why we’ve outsourced innovation, because biotech startups and universities are better equipped to drive our discoveries,” said Ms Miemie Strydom, Director of New Business Development at Johnson & Johnson Innovative Medicine.

She was speaking at a panel discussion, Evaluating Science through the Lens of Commercialisation, organised by the Agency for Science, Technology and Research’s (A*STAR) academic-industry research partnerships office, Biomedical Sciences Industry Partnership Office (BMSIPO), and SGInnovate. She disclosed that more than 50 per cent of her company’s revenue is driven by the results of such partnerships.

 
(L to R) Director of BMSIPO, Yee Kwang Seck; Panel moderator, CEO of SGInnovate, Dr Lim Jui; Executive Director of Business Development and Licensing at global pharmaceutical company MSD, Dr Nikhil Mutyal; Partner at venture capital firm Novo Holdings Equity Asia Mr Navjeewan Khosla; Director of New Business Development at Johnson & Johnson Innovative Medicine, Miemie Styrdom. 

Ms Strydom also zoomed in on why she’s turned her attention to identifying business opportunities in Asia – partly due to its growing and ageing population, increasing healthcare needs and favourable government policies.

“I have a strong belief that a lot (of opportunities) are going to come out from (Asia) because there’s so much interest,” she noted in the discussion. She was joined by the other panellists who offered up advice to biomedical startups looking to collaborate with big pharma players and investors. Here are their top four considerations:

Getting one foot into the door of bigger industry players can be a painful process for startups, with Dr Mutyal offering some sobering figures: “Typically, less than 1 per cent of opportunities we see get a deal (with us).”

One of the biggest reasons, said the panellists, is that startups lack a commercialisation mindset. “We like to see some high-level thinking done early on with a commercialisation lens in mind,” he said. “It is important for startups to have a vision about how they’re going to commercialise the product and deliver it to the patient.”  

Beyond that, it is critical for startups to highlight why their new technology is different from the market or those being developed by other companies.

Once you have your business plan, connect with larger industry partners or investors earlier rather than later.

“Engage early and try to have us learn your science over a period of time,” said Dr Mutyal, adding that it is not necessary to show market forecast at this stage.
The logic is simple: a deal can be struck only when both parties are aligned in their goals. “Many of the deals that we have done happen over a period of time; they were not the first conversations,” he noted.

READ: Why partnerships between startups and healthcare providers is crucial

To find out who are the most suitable investors or partners, Ms Strydom advised startups to do extensive research on the area of focus for different companies. 

“Just because one company says this is off the table doesn’t mean it is not interesting,” she added.

Startups usually need to educate investors on the ins and outs of their technologies. 

“People don’t know about the biotech ecosystem in Singapore, and so a lot of our investor discussions are about education,” said Ms Strydom.  

However, organising such forums is not something most startups can afford. One way to get around this is to engage industry professionals and set up a Scientific Advisory Board. These experts are credible and also possess a wide network of connections that can be tapped and built upon.  

“Most of them do it out of personal interest and not because they want to get paid,” she explained. “It’s a great way for you to access expertise without breaking the bank.” 

It is for this reason that Mr Khosla connects startups under his company with relevant businesses through an outreach session every quarter. But money is not the deciding factor when Novo Holdings evaluates a startup for a partnership. “For me, the biggest risk is reputational,” he said.  

The company once invested in a startup whose founders said it had only five to six shareholders. However, they were later found to have given away shares to their friends and families without proper documentation, raising the shareholder headcount to 500. Sorting out the paperwork set the team back by six to eight months – an eternity in the tech world.

“(That’s why) in addition to science, a lot of the work we do is regarding the company founders’ track record and their corporate governance,” he explained. One such initiative introduced is the 100-day and one-year roadmaps which helps founders clearly define goals and milestones they need to achieve within each period. 

The initiative’s purpose is to act as a reference point for Novo Holdings to gauge the amount of financing required at any given point in time. That way, they can better provide better support as partners. 

Is Asia the place to be for biomedical startups?

“For some things, Asia is a hot topic, and it makes more sense to be here than anywhere else because you’ll be a first mover,” said Ms Strydom. 
For example, India currently has South Asia’s largest genome bank. Therefore, it makes sense for startups specialising in genome technology to make the strategic move to the country.

The same goes for China, which has been getting attention from global pharmaceutical companies due to its large market, cost effectiveness and innovative technologies. “In Asia, there’s a tremendous amount of interest and focus on China,” noted Dr Mutyal. 
While a first-mover advantage is helpful for some startups, having a capable management team is also crucial to achieving business success regardless of geography. 

READ: Unlocking talent diversity in Singapore’s biotech sector

Thriving in a fast-paced startup culture with night calls and 14-hour workdays – a common occurrence in startup life – is not easy.  Founders have the responsibility to cultivate a team that can hold its ground in the competitive landscape.

“Look at where the science and technology trends are headed,” said Ms Strydom. “Here you’re going to be a big fish in a small pond, and in the US, you’re going to be a big fish in a big ocean. Figure out whether it makes more sense to be here or to expand.” 

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