strategic alliances

Slide 1: 

Strategic Alliances

Agenda : 

Agenda Nature of Alliances Getting Ready & Staying Fit Finding & Selecting a Partner Negotiating a Deal Managing the Alliance Conclusion

Why Alliances? : 

Why Alliances? For mutual benefit of partners Complementary capability & IP Because nobody can do it alone However, Watch for… Inadequate Returns! Strategic Roadblocks! New products Risk sharing Higher ROI Market access Funding Validation

Pyramid of Alliances : 

Pyramid of Alliances Acquisition/ Merger Vendor Licensing/OEM/Private Label Joint Selling/Distribution Joint Marketing Supplier R&D Collaboration/Tech Transfer Joint Venture

Industry Patterns : 

Industry Patterns

Searching for a Partner : 

Searching for a Partner Find those that are looking for the player in the field! Have gaps that the company can fill Entering specific field Can grow revenue with appropriate product Search everywhere for ideas Industry contacts Trade press and newsletters Company websites and SEC reports Scientific papers and USPTO Respond vigorously to leads Requests Customers (and suppliers!) Exhibits

Target Summary : 

Target Summary

Partnership Matrix : 

Partnership Matrix

When a company Finds A Good One : 

When a company Finds A Good One Launch the alliance project Project plan Objectives Players Next steps Timeline Maintain Target Summary & Partnership Matrix Be ready for a lengthy and sophisticated process Get an experienced expert to structure and negotiate the deal

The Negotiation Process : 

The Negotiation Process Explore while negotiating Series of experiments Bet on success with a win-win Sensitive to negative motivations Cultivate & protect company’s champions Cast a wide net Manage due diligence Strong clinical/market data Explicit requirements Bilateral Sell and re-sell Ground oneself financially Sound company financials Understand partner’s ROI requirements

Deal Valuation Case Study : 

Deal Valuation Case Study

Slide 12: 

Deal Valuation Case Study

Acronyms in this field of study : 

Acronyms in this field of study LOI - A letter of intent MOU – memorandum of understanding

Term Sheet (LOI, MOU) : 

Term Sheet (LOI, MOU) Up front and milestone payments Running royalty or transfer pricing Equity investment or loan Funded research and development Diligence obligations - financial and other Control of Intellectual Property rights Rights of first refusal on improvements, new Indications, etc. Dispute resolution

Exit Strategy : 

Exit Strategy What happens if it doesn’t work out? Need a “pre-nup” Prenuptial agreements, where couples planning to marry agree what will happen to their finances in the event of divorce and separation Define causes for termination Define distribution of assets Money – present & future Capital Equipment Product IP & know-how Everything else in the deal

Alliance Management : 

Alliance Management Communication Face-to-face at multiple levels Simple structures work better Complex division of rights leads to issues especially post-market Common understanding of value potential Aligned incentives allows flexibility over life of partnership Realistic timelines Builds confidence and lowers risk

Strategic Alliance Success : 

Strategic Alliance Success Keep the trust People to people With accountability Regular communication Visible milestones Build successes

What is the companies Future? : 

What is the companies Future? Acquisition by a Big Co Protected Niche Growth Company Aggregator (total) Your feedback to joshdanis@gmail.com