When done right, partnering is a strategic tool in both good times and bad. As a recent EY Voice article in Forbes highlights, NPS Pharma used partnering to first survive a near-catastrophic regulatory failure coupled with a financial crisis, and then to transform the company into a nimble market leader.
Securing cash and boosting growth through partnering
In 2007, NPS Pharma was facing dire circumstances: with $200 million in debt and a lead product that failed regulatory approval, their stock price was collapsing. NPS Pharma CEO, Dr. Francois Nader, quickly refocused the company on other development efforts, but they needed cash to finance this redirection. Dr. Nader turned to partnering. By out-licensing proprietary compounds and techniques, NPS generated enough cash to serve as working capital and to pay down its debts. Effectively, partnering allowed them to weather the crisis while they reoriented themselves. But, that’s not the only role partnering played in NPS’ turnaround.
NPS still leverages partnerships today to keep the company nimble and reactive. In their own words, “Forging strategic partnerships has been and will continue to be a key pillar of our growth and success.” In particular, NPS partners or outsources drug discovery and manufacturing, gaining access to expertise, technology and facilities. Their lean and focused strategy has paid off – revenues have increased more than 300% since 2011.
Partnering serves many different needs
A recent report by the Boston Consulting Group also attests to the strategic role partnering can play in a company’s success. Depending on the need, partnering can impact the business immediately or years off in the future. It can be used to outsource R&D, extend the product portfolio, secure IP or create a competitive advantage, amongst many other things. In the graphics below, BCG explains the different types of partnering and how each can be used to promote growth.
Get the most out of partnering
Partnering is a powerful tool, if you know how to leverage it. In our experience, to get the most out of your partnering activities, you first need a centralized partnering solution. With all of your M&A, in/out-licensing and collaboration projects in one place, you gain 360° visibility into your activities. From there, you can accurately target your efforts on the most promising opportunities that fit your strategic needs. It will also help keep your entire team on the same page, working towards the same goals. But not just any partnering solution is up to the task. Download our latest white paper and learn why the life science industry needs an expert Partner Relationship Management solution. It’s because of stories and experiences like that of NPS Pharma that we at Inova are investing in ways to make partnering easier and more successful.