This blog was written by Deanna Petersen, CBO of AVROBIO, as part of the From The Trenches feature of LifeSciVC.
As with most professions – especially those that involve longer-term outcomes – the way people get good at BD is with experience. So, I’d like to share some of my experiences doing BD from various vantage points, with the hope that it might help you jump start the career of anyone interested in BD. Or for those not in BD, this may give you a peek behind the curtain for this professional area that is so active and at the intersection of many disciplines in drug development.
Here’s a bit of background, so you know where I’m coming from. I started my business development career in the tech transfer group at a university, then moved to a biotech start-up, then a late-stage company, then a larger pharma company (Shire). So, I’ve grown to understand all those environments and I’ve done all types of deals – in/out licenses, co-development, collaboration, public and private M&A – from all sides of the table. Since I’m back in a small company again (and loving it), most of my tips will be from that perspective.
Before diving into the BD tips, let me say that having a mentor in BD can offer insights that supersede any pieces of advice. Mentors and colleagues can be important to building a BD career because they can help round out the broad range of skills and experience that are necessary in BD. My first mentor, Rose Rennekamp, showed me the ropes for the business and marketing aspects of BD, in particular identifying and targeting my audience. She also helped me transition from a science- to a business frame of mind. Once I got into the drug industry, I encountered others who were inspirational to me in deal-making. They include Barbara Deptula, previously Chief Corporate Development Office at Shire, whom I had the privilege to work alongside of as she did impressive work to help transform Shire from an ADHD/specialty company to a rare disease company. Also, George Golumbeski, formerly head of Business Development for Celgene, is a leader whom I’ve known for a couple of decades who has always been there to offer advice, based on his deep reservoir of expertise structuring some very innovative and creative deals for Celgene.
Along the path of your career in BD, look for great mentors. All the while, keep building your skills – here are some pointers.
Tips for Success in BD
1. Know who you’re targeting and nurture the process. Effective business development is about targeted outreach. It’s about knowing (or finding out) the strategic business focus and therapeutic areas of potential partners. Mass marketing doesn’t fit the bill in biotech BD. Once you’ve done your homework and identified your targets, you’re ready to make connections with these first 3 BD tips.
BD Tips: Clarity, persistence and relationships
- Clarity: Potential BD partners want things boiled down in a clear and compelling way. This is important right from the start when you are having initial meetings and preparing non-confidential material. Someone from pharma told me early-on in my career, “Don’t make me think.” He was a busy executive without the brain space to quickly process a lot of information and data. The onus was on me to give him the punch line and tell him why he should be interested in the assets from my company.
- As you move through the BD process, the bar continues to rise for being clear and persuasive. When you get a meeting – which typically includes several people from the pharma company – it’s time to prepare your A-game presentation. Delivering a persuasive presentation requires time and thought, so that you build a persuasive story, take your audience down the path you want, always stay credible, and use your slides correctly. You can fine-tune your delivery with your internal team (and consider accessing coaches, like Beth Rogers at Point Taken Consulting for a presentation workshop.) Also, be sure to schedule enough time to deliver your presentation and answer Q&A without being rushed (1.5-2 hours typically.) Rushing through a meeting is worse than rescheduling to get adequate time.
- Persistence: It takes persistence to keep momentum in a BD process. Be persistent, but not a pest – there’s a fine line between the two. And don’t worry about rejection, because ‘no’ is rarely permanent in biotech. I have a saying ”no only means no for 6 months” (everything in biotech changes every 6 months). Even when there’s positive feedback from a potential partner, the road can be long and winding. Rome wasn’t built in a day, and neither are BD deals.
- Relationships: It’s no surprise that relationships are key in BD. I have another saying, “people do deals with people they like.” And when times get tough in a collaboration (and they will), personal relationships can hold things together. Someone from big pharma told me a story once about a very difficult negotiation they had where the other side created a lot of unnecessarily hard feelings. The deal closed, but the minute the collaboration hit some rocky water, it was terminated. The BD person said he never was so happy and quick to terminate a partnership in his life.
2. Set up your negotiation for success. As your BD process evolves, you will find yourself working toward term sheets, negotiations, and driving your deal toward closure. Here are 3 BD tips in the realm of negotiating and closing your deal.
BD Tips: Competitive bids, walk-away positions, and the inside scoop
- Competitive bids. We all know the old adage that “the best way to get a deal to close is to have multiple bidders.” This is a goal that’s always worth striving for because creating an auction drives a BD deal to happen. It’s difficult to drive (and close) a high value deal based solely on logic, strategic fit or technology fit. But the price of a deal always goes up if someone else is bidding. In essence, the negotiation dynamics change from you negotiating with your potential partner, to the two (or more) potential partners negotiating against each other.
- Here’s a real world story about a competitive bid. I once had 4 big pharma companies bidding on a pre-Ph1 program and they all submitted term sheets by my due date (isn’t it great to give big pharma due dates?) Then I realized that the term sheets were all apples vs. oranges and it was difficult to determine which was best, some had some clever ratchet-up type of features. Then I combined all of the most advantageous terms and conditions into one counter-proposal and sent it back out to all 4 pharma…with a deadline. Then I held my breath and tossed and turned for a few nights wondering if I had gone too far. Then the responses started coming in. One company held fast with their first term sheet; two companies upped their term sheets a bit; and one company said “We accept your new term sheet as is.” Big sigh of relief from me! Later the BD person at the winning company told me that their management knew it was a competitive situation and didn’t want to lose the bid to a competitor by trying to save a minor amount of money. So, the auction worked.
- Always have a walk-away position… or you’ll lose your leverage. In my first job in industry, I was negotiating with Aventis and they had a young, outside attorney (we called him ‘the kid’) who fought so obnoxiously hard for Aventis on every issue that we stopped making progress as a negotiation team. The substance of the deal was getting eroded by the minutiae. Late into a day of negotiating, one evening, I had had enough and walked away from the table saying that we would not negotiate anymore unless they removed the young attorney from their team. Imagine having to explain this to the CEO of your small biotech company in the morning! But the CEO of Aventis called my CEO the next day to reiterate their interest in getting the deal done, and the negotiation team followed that by asking me if the young attorney could listen to our TCs but not speak, to which I agreed. We moved on to engaging in productive negotiations and got the deal done.
- The inside scoop. Let me share some helpful insights about the view from the ‘other side’ with the BD process at a larger pharma company. The way it works internally at the pharma company is like this. The BD and scientific teams make the case for a partnership/license/acquisition to the executive team, and then (if required) to the Board. So, by the time they’re negotiating with you, they’ve already put themselves on the line and made the case internally for your asset/technology/company. Once executive approval has been given at the pharma company, the BD team really needs to deliver that asset, or explain to the CEO and senior management why they couldn’t make it happen. So, if you’re in that position, you may have more leverage than you think.
3. Live, Breathe, and Network. Networking is everything in BD. You will spend lots of time on the road and in the drug discovery ecosystem. While you’re out on the trail, here are some practical tips for networking.
BD Tips: Rules of the road
- Wear your name tag high and on the right so that you present your name tag when shaking hands. Avoid lanyards, they’re often twisted/turned and cause people to look down and search for your name.
- Ask for the attendee list ahead of time so you know who’s coming. Then, spend your time at the event looking for your targets.
- At networking receptions, take only a little bit of food on your napkin or plate so that if you find yourself in an unproductive conversation, you can excuse yourself (without embarrassing the other person) to ‘get more food’ and circulate in the room.
- Build your Rolodex. You’ll use it every day for the rest of your professional life.
4. Auxiliary Topic: How to break into BD. People often ask me how they can get into Business Development and be considered for a BD job. Here are some tips for building a BD-focused resume.
BD Tips: Building skills, acquiring experience
Building core BD skills. The best BD professionals have expertise in 3 areas:
- Science/technology = don’t need to be the expert in the room but need to be able to speak to – and answer questions about – the science.
- Business/finance = need to be able to assess value and commercial potential.
- Legal = need to understand intellectual property (patents and know-how) inside and out, as it is at the heart of most every transaction.
Depending on your background, most people have experience in 2 of these 3 areas, only some have expertise in all 3. What you can do is shore-up the skill(s) that you need to be stronger in. There are lots of ways to build your BD skills. Here’s what I’ve done over the years as an example:
- Science/technology: I started working for an immuno-oncology company and read two immunology text books (yes I did!) and took two immunology courses at Harvard.
- Business/finance: I got an MBA then volunteered to write the initial business plan for my first start-up (Coley Pharmaceutical Group.) There are also valuation workshops, week-long MBA courses, M&A courses, negotiation courses (just to name a few.) One of the most interesting courses I ever took was how to negotiate as a woman.
- Legal: I learned about patents and other forms of intellectual property (I took two law courses early in my career). These days, you can join LES (Licensing Executives Society) and take week-long IP courses and licensing courses, which offer a certification.
Acquiring experience. It’s a common question to ask how to get a BD job if you don’t have any direct BD experience yet. Here are some ideas:
- Join key professional organizations for BD (or that offer BD courses) such as Licensing Executives Society (LES), AUTM (Association of University Managers), BIO (Biotechnology Industry Organization), MassBio, BioPharma Executive Council (Boston) and others. You can also attend the conferences for these organizations (lots of great networking) and take professional development courses.
- Offer to help on the BD team in your company. If there’s a BD team at your company, call the head and volunteer to help with ANYTHING they need – a technology assessment, a business assessment, summarize a field, prepare a summary of the competitive landscape, a deep-dive analysis. A project like this allows the BD team to get to know you and your skills and starts to give you an understanding of the BD process. The next time they have a job opening you may find yourself in a favored position applying for it.
- Board experience is golden, so seek to get experience on a Board early. You can start by volunteering for non-profit organizations or good causes. I started by volunteering for the school board foundation for my children’s elementary school and we raised money for new playground equipment. Then, I volunteered to do some economic development work for the governor. The next thing I knew, I was asked to be on the Board of Directors for the Iowa Biotechnology Association. Then when my children graduated from high school, I had more time so I volunteered to be on the Board of the Healthcare Businesswomen’s Association in Boston. From there, I was asked to be on the Board of the Massachusetts Biotechnology Association, and from there moved to Boards of private biotech (Armagen Technologies) and public energy companies (American DG Energy, Tecogen, Inc.) It’s a step wise process that can build throughout your career.
Some Concluding Sentiments
Business Development is often viewed as one of those ‘sexy’ jobs that everyone wants to be in. After all, we’re always keen to see a press releases that announces a big deal – so we can look at the details of the dollars and deal terms. Those of us in this profession know how much work goes on behind the scenes. It’s a small miracle every time a deal actually gets done. I hope some of these tips will help you build your business development A-Game and enable you to make a new BD deal happen.