Jeff Hollings Eli Lilly and Company December, 2012

Transcription

1 Jeff Hollings Eli Lilly and Company December, 2012

2 Partnering Role of Alliance Management Structuring Alliances 2

3 "Lilly's number-one priority is increasing the flow of innovative products that make a real difference for patients. Partnering has been a key element of our strategy for more than a decade, and successful partnerships are essential for Lilly's ongoing pursuit of innovation." Dr. John Lechleiter, President, & CEO Eli Lilly and Company

4 H L Outlicensing Inlicensing Outsourcing Preferred Supplier Vendor Contract (arm s length transaction) Degree or Level of Involvement Mergers Acquisitions Joint Ventures R&D Collaboration Strategic Business-Partnering ALLIANCES OUTSOURCING RELATIONSHIPS INTEGRATION H 4

5 Evaluation of IN-LICENSING Candidates Triage Business Case Transaction Prep Terms Prep Due Diligence Contract Negotiate Lilly s Sourcing Innovation Process Alliance Planning Alliance Startup Implement & Value Creation Roles Global External R&D Find It Identification Scientific Evaluation Prioritization Corporate Business Development Get It Guiding Principles Deal Structures & Terms Negotiations & Contracting Alliance Management Create Value Partnership Implementation Ongoing Governance Structuring Alliances

6 Top Reasons for Partnership Failure* 1. Senior Management Changes 2. Expected Results Slow / Fail 3. Business Environment Changes 4. Cultural Differences 5. Weak or Wavering Commitment 6. Merger or acquisition 7. Poor Alliance Leadership 8. Poor Communication Alliance Management Value Propositions: # 1: Doing alliances well will maximize value creation & value capture for the partners # 2: Doing alliances well will ensure that Lilly gets access to the best opportunities (preferred partner) *Source: BioPartnering 2003/2004 Survey 6

7 Partnering Role of Alliance Management Structuring Alliances 7

8 Co-location Communication Operating alignment Ease of setup, exit Need Clear co. roles High Low 8

9 Joint Venture Hybrid Teams Long term relationship, dissolution difficult Desire for autonomy from parents Division of Labor Can be with or without formal JV Co-location possible HR, legal complexities Functional Pairs 9 Higher trust levels Ability to segment work easily Desire for efficiency Capabilities/capacity key consideration Low trust levels Unsure of length of project Often inefficient High level of oversight possible

10 Co-locating your teams can be a great way to quickly build trust among members pay close attention, however, to any issues that surface in the process. 10

11 Pros Single points of accountability Improved integration and alignment Streamlined resource utilization Collocation is beneficial, but not without challenges Cons Relocation is expensive, may limit staff selection Introduces multiple legal complexities & risks Practical challenges related to gaining appropriate systems access 11

12 Partnering is a critical to R&D success Alliance Management capabilities improve the probability of success due to non-technical reasons Operational structures of alliances can vary greatly. Selection of the best for your partnership should be based on: Length and breadth of collaboration Trust levels between companies Each company s capabilities and capacity Need for efficiency vs. oversight 12

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14 Deal Management or Business Chaperon Professionals, normally from licensing or deal making group, attending to the alliance throughout its life cycle. Ombudsman Dedicated person to ensure that the spirit of the collaboration is implemented in a way that is most productive for the companies involved (servant leadership perspective). Project Management Project lead focused on coordination of resources, delivery of results on time and on budget. Advocate or Champion Alliance advocate or champion provides leadership and creates accountability within the collaboration, but less involved in day to day implementation. Lilly IAM plays all of these roles at different times in alliance implementation. 14

15 Achieving Value Through Partnership An autonomous group focused on successful alliance start-up and implementation; contract and metrics oversight A strong voice for the alliance; inter- and intra-company influence, alignment, and transformation Judgment-based management and issue resolution Mitigation of human and business risk, legal uncertainties Clarity of roles, communications, and expectations A responsibility for capturing and sharing learning Training in alliance processes, tools and best practices for Lilly and our partners 15