Managing Collaboration Governance

Section IV.A. Governance ??How does one manage a blockbuster product?? There are worldwide clinical development plans; coordination of regulatory activities; manufacturing capacity and budget; global marketing plans; country strategies for marketing and sales; additional indication and lifecycle studies …oh, and please organize all of this via an alliance governance structure …

When faced with bringing a blockbuster product to market via a biopharma alliance, collaboration governance looms large among BD&L’s negotiation priorities.? One must establish committee structures that will be functional for a decade or more, let alone optimal for decision-making and conflict resolution.? How to go about this?? Perhaps it’s best to start with a selective review of previous governance structures.

Let’s start with the Lipitor alliance between Parke-Davis and Pfizer.? As noted in an earlier article, Lipitor was launched in the US in 1996 and grew to $13 billion in peak annual sales a decade later.? Pfizer purchased Parke-Davis’ parent, Warner-Lambert, in 2000 for $90 billion.? Here’s the alliance snapshot and governance structure:

Next, let’s consider Enbrel, Immunex’s TNF inhibitor for the treatment of autoimmune indications, including rheumatoid arthritis and plaque psoriasis.? In 1997 Immunex commenced a Co-Co alliance with Wyeth (later Pfizer) for rights to commercialize Enbrel in North America.? Enbrel was approved in the US in late 1998 and reached peak annual sales of $7 billion, of which half was in North America.? Here’s the alliance snapshot and governance structure, as amended upon Amgen’s acquisition of Immunex in 2001:

Finally, for a more recent example of collaboration governance geared to managing a blockbuster, there’s Medivation’s 2008 Co-Co collaboration with Pfizer for Dimebon to treat Alzheimer’s and Huntington’s diseases.? As discussed in an earlier article, this is one of my favorite deal structures, even though Dimebon ultimately failed to show efficacy for either indication and was abandoned in 2012.? Here’s the alliance snapshot and governance structure:

What are the commonalities in these governance structures?? First, such committees are organized by function and operate largely by consensus.? Secondly, most issues are handled at the functional committee level, with allocation of final decision-making authority for specific issues.? Thirdly, a limited number of issues can be escalated to a higher level for decision-making by consensus.

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You can see the introduction to this ongoing series of articles about best practices in biopharma licensing, or go directly to links to previously posted articles of the series here.