BioWorld Today Correspondent
BOSTON - If there was one takeaway message from Wednesday's Boston Bio-Relationships 2005, it was that a successful overseas biotechnology firm would look a lot like a successful American one. Or at least have a U.S. address.
The daylong conference, organized by the Australasian Life Sciences program of the American Australian Association, brought together more than 130 attendees with 14 Australian and five New Zealand biotech companies in what conference speaker John Wood, New Zealand ambassador to the U.S., called "a compulsory event" for New Zealand and Australian firms seeking U.S. partners.
Partnerships always require a give and take - examples abound in the industry - and that theme ran throughout the conference, as well as how to court VC funding beyond a company's home turf.
"Partnerships must share a common vision about a product," said Michael Levy, vice president of alliance management for Bristol-Myers Squibb Co., who moderated a session titled "The Collaboration Challenge." A partnership must do what is in the best interest of the product, he said. That includes being collaborative and diplomatic, as well as being "the voice behind the scenes."
His sentiments were echoed by Neuren Pharmaceuticals' CEO and managing director, David Clarke, who drew on his 20-person company's partnerships with Pfizer Inc., of New York, and the U.S. Army. "Don't forget the soft stuff," he said. "Half the sales in the world [are made] with emotion and trust, credibility and relationships." Companies must win prospective partners' emotional trust because, he said, "things will go wrong."
Clarke also emphasized the importance of flexibility and finesse.
"Aim for win-win," he said. Recognize going into negotiations that concession will have to be made and be willing to do it. "Sometimes, the best people not to bring are your scientists."
Once the deal is formed, the hurdle becomes the ongoing management of partnerships, something Proacta Therapeutics CEO Paul Cossum stressed as important. Cossum's company specializes in therapies to treat hypoxic tumors and its investors include F. Hoffmann-La Roche Ltd., of Basel, Switzerland, and Genentech Inc., of South San Francisco. Cossum said investors initially were attracted to Proacta, based in Auckland, New Zealand, in part because of the caliber of hypoxia research at its founding scientists' home universities, the University of Auckland and Stanford University, and because of intellectual property held by the University of Auckland's IP arm, Uniservices.
Those partnerships have continued to be successful, Cossum said, because of how they are managed - by providing regular updates on such things as development milestones and research activities, by seeking input on development strategies and VC financing contacts, and by using their partners' own network of contacts.
Proacta has a subsidiary, Proacta Inc., headquartered in San Diego, and therefore exemplified an underlying question that cropped up throughout the conference: How important is the physical distance between a company and its partners?
Neuren's Clarke, whose company has offices in Auckland and Maryland, echoed the sentiments of numerous panelists when he said, "Distance is not dead." Even with such technology as video conferencing and email, there are challenges. "Face-to-face communication is best," said Clarke. "Get ready to travel, travel, travel. That's the name of the game."
Like Proacta, many companies opt for a U.S. outpost, a route that Pharmaxis CEO Alan Robertson lauds, saying it was "critical" to have a locale in the States for companies with U.S. investors. "You need to be in the same time zone," he said.
Novogen Ltd.'s managing director, Christopher Naughton, said Marshall Edwards Inc., which is 87 percent owned by North Ryde, Australia-based Novogen, was an example of the "Americanizing" of an Australian technology. Based in Stamford, Conn., Marshall Edwards is Nasdaq-listed, and "most Novogen shareholders are American," said Naughton, who is Marshall Edwards' CEO.
Panelist Marcia Anderegg, a partner with the Boston law firm Palmer & Dodge, which specializes in negotiating strategic partnerships, agreed that having a U.S. office has certain advantages. "I do think there's the view that it gets you greater access to what's happening here," she said. "It's always helpful if you're bumping into people at these meetings and conferences."
But she didn't consider it compulsory. "We see more and more cross-border deals, so certainly [distance] is not an insurmountable barrier," Anderegg said. "What I see is that if there's a real fit, the parties will make it work."