The key to successful collaborations: Rigorous and independent due diligence

Abstract

In a maturing bio-pharma industry and with capital markets closed, collaboration is becoming the main route for companies to achieve the critical mass and cash flow necessary for sustainability. Indeed, collaboration is currently being driven by several factors, including the high-risk/high-reward profile of drug development, the lengthy time to profitability and the credibility provided by big pharma backing. However, in a complex industry such as biopharmaceuticals, many collaborative deals fail to deliver the value they initially promise. In this environment rigorous and independent due diligence will pay handsome returns by minimising 'asymmetry of information', and will allow companies to structure more successful deals, with risks and rewards more fully understood. How can state-of-the-art due diligence processes help clarify the objectives, define the optimum deal structure, identify the right partner and provide a pragmatic strategic plan to improve the chances of successful collaboration?