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 Biopharmaceutical Alliances glossary & taxonomy
Evolving Terminologies for Emerging Technologies
Comments? Questions? Revisions? Mary Chitty
mchitty@healthtech.com
Last revised November 05, 2013

 



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alliance management: Strategic Alliance Management Congress  May 5-7, 2014 • Philadelphia, PA Program | Register 
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alliance strategies:
As the first decade of the 21st century comes to an end, the pharmaceutical industry is facing a major revenue downturn.  The contributing factors are the expiration of patents on a number of blockbuster drugs and the stagnant productivity of R&D.  As a consequence generics are expected to seriously erode revenues and the introduction of new proprietary drugs is not adequate.  The once insular pharmaceutical industry has been forced to look outside beyond its walls for drug pipeline candidates.  The result has been an almost expediential growth of the past decade in the number and value of strategic alliances. Insight Pharma Reports Strategic Alliances: Synergistic Path to Value Creation 2010

alliances: Agreements between two or more companies to cooperate in some way. Originally a military and legal term for treaties between sovereign states, could be offensive, defensive or both. Narrower terms: alliance networks, emerging company alliances, strategic alliances.

CORDIS Community Research and Development Information Service: An important source on EU [European Union] R&D programmes and relevant matters ... distributed: via the CORDIS World Wide Web service, which includes access to the CORDIS databases. http://www.cordis.lu/en/home.html

CRADA Cooperative Research and Development Agreement: A written agreement between a private company and a government agency to work together on a project. By entering into a CRADA, the [US] Federal government and non- Federal partners can optimize their resources and cost effectively perform research by sharing the costs of this research. The collaborating partner agrees to provide funds, personnel, services, facilities, equipment or other resources needed to conduct a specific research or development effort while the Federal government agrees to provide similar resources but not funds directly to the partner.  http://www.usgs.gov/tech-transfer/what-crada.html

collaboration:  Collaboration can be horizontal (a group of small companies), vertical (suppliers and customers), sectoral (same industry sector) or lateral (complementary but different sectors). From the Latin, meaning to work with. 

The biomedical industry faces a crisis in productivity, with rapidly rising costs for R&D but declining results. While many other industries have found ways to enhance performance using pre-competitive collaboration, the biomedical industry has been reluctant to embrace such sharing of information, investments, risk and costs. There are, however, encouraging signs that important shifts are taking place, as evidenced by a growing number of consortia, programs for open innovation, and experiments with crowd-sourcing to find solutions outside a single company. One area ripe for collaboration is the field of neglected diseases, where the shortage of traditional profit opportunities mean that companies are forced to re-think how to achieve the most productive results. Collaborative Innovation in Biomedicine April 5-6, 2011 • Philadelphia, PA Program | Collaborative Innovation in Biomedicine
Related terms: alliances, alliance networks, competitor collaboration, consortium
, joint venture, partnering, research joint venture, strategic alliance, technology transfer, technology web; Intellectual property & legal anti- trust

communities of practice: Informal groups ... the latest technique for getting employees to share what they know, seven ways to encourage such communities in your company. CIO Magazine, May 2002  Excerpted with permission of Harvard Business School Press. Cultivating Communities of Practice: A Guide to Managing Knowledge by Etienne Wenger, Richard McDermott and William M. Snyder. Copyright 2002 http://www.cio.com/archive/051502/excerpt.html

competitive advantage:  The quest for competitive advantage often inspires executives to imitate the strategies of the most successful companies. Interestingly, however, precisely opposite factors are considered sources of competitive advantage at different points in time. ... Clayton Christensen, a leading thinker on disruptive technologies, alerts managers to the imperative of understanding the context that supports a particular competitive advantage. He explains why, for example, pharmaceutical companies' current focus on ever larger mergers is moving them in exactly the wrong direction at exactly the wrong time. C Christensen, Past and Future of Competitive Advantage, Sloan Management Review, 42 (2): 105-109, Winter 2001 http://web.mit.edu/smr/issue/2001/winter/9/ 

competitor collaboration: Intended to explain how the agencies analyze certain anti- trust issues raised by cooperation among competitors.  Antitrust Guidelines for Collaborations among Competitors, Federal Trade Commission, Dept. of Justice, April, 2000. http://www.ftc.gov/os/2000/04/ftcdojguidelines.pdf  Related terms: Research pharmaceutical  pre-competitive R&D, RJV Research joint venture

consortium, consortia: A consortium is typically a loose, long- term alliance between competitors in a given industry. Research and development consortia are a specific type of consortia that focus on basic research and sometimes applied research, rather than downstream activities such as production.  While joint ventures and licensing partnerships are relatively traditional forms of inter-firm collaboration, R&D consortia are new to the scene.  Under the National Cooperative Research Act (NCRA) of 1984, these sorts of industry- based consortia became immune to anti- trust legislation in the United States.  The NCRA emphasizes the pre- competitive aspect of R & D ... To date, no U.S. consortium has been prosecuted under any anti- trust legislation.  The collaboration of competitors in early phases of the innovation process can yield great advances for the entire industry involved in the consortia.  "Collaboration between Firms in Information Technology" Chris Rigatuso, Takeshi Tachi, Dennis Sylvester, Mark Soper; Strategic Computing and Communications  Technology course *, Department of  Electrical Engineering and Computer Sciences, Univ. of California- Berkeley, US, Spring 1997   Related terms:  technology consortia; Intellectual property & legal  anti- trust 

discovery rights: Selling only research findings in the agreement while keeping rights to all the knowledge that is uncovered along the way. (Millennium Pharmaceuticals has been cited as an example of this model.)

expectations management: http://www.forbes.com/sites/85broads/2013/07/22/the-top-five-tips-for-managing-client-expectations/
Related term: collaboration auctions

extension of agreement: Agreement coming out of a previous association, may depend upon the achievement of specific milestones.

joint venture: An association formed for a specific purpose (and duration) between two or more parties. Originally a real estate term, now use much more widely. Unlike most partnerships, a joint venture anticipates eventual termination of the arrangement. Related terms: NCRPA definition of  "joint venture", pre- competitive R&D, RJV Research joint venture.

keiretsu: The framework of relationships in postwar Japan's big banks and big firms... About Economics http://economics.about.com/library/glossary/bldef-keiretsu-system.htm 

leveraging: Creation of collaborative relationships or formal agreements with others outside FDA. The collaborations may develop as partnerships, cooperative agreements, or other similar arrangements entered into by a component of FDA and another organization, such as a corporation, educational institution, trade or consumer group, government agency, or foreign government. Leveraging is always cooperative and beneficial to all the parties involved, and is structured to advance FDA’s mission to protect and promote the Nation’s public health. ... Resources that might be leveraged are numerous, but typical examples would be expertise, equipment, emerging technologies, and databases. FDA, Guidance for FDA Staff, Leveraging Handbook, An agency handbook for effective collaboration, 2003 http://www.fda.gov/downloads/AboutFDA/CentersOffices/CDER/WhatWeDo/UCM121662.pdf

NCRA National Cooperative Research Act: Restrictions on multi- firm cooperative research relationships were lifted with the passage of NCRA in 1984. This law was enacted to encourage U.S. firms to collaborate on generic, precompetitive research. To gain protection from antitrust litigation, NCRA requires firms engaging in RJVs [Research Joint Ventures] to register them with [the US]  DOJ Department of Justice.] [National Science Foundation "Science and Engineering Indicators 2000" http://www.nsf.gov/sbe/srs/seind00/access/c2/c2s6.htm

NCRPA National Cooperative Research and Production Act: 1993 amendment to the National Cooperative Research Act (NCRA), encouraging corporations to engage in joint ventures for purposes of research and development and/or production.

partnership:: A business enterprise entered into for profit which is owned by more than one person, each of whom is a "partner." A partnership may be created by a formal written agreement, but may be based on an oral agreement or just a handshake. Each partner invests a certain amount (money, assets and/ or effort) which establishes an agreed upon percentage of ownership, is responsible for all the debts and contracts of the partnership even though another partner created the debt or entered into the contract, has a share in management decisions, and shares in profits and losses according to the percentage of the total investment. ... A "limited partnership" limits the responsibility for debts beyond the investment to the managing "general partners." The investing "limited partners" cannot participate in management and are limited to specific percentages of profit. A partnership differs from a "joint venture," which involves more than one investor for only a specific short term project and prompt division of profits. [law.com] http://dictionary.law.com/definition2.asp?selected=1460&bold=|||

pre-competitive R&D, Research Joint Venture RJV: Research pharmaceutical

SBIR Small Business Innovation Research: A highly competitive [US] program that encourages small business to explore their technological potential and provides the incentive to profit from its commercialization. http://www.sbir.gov/ 

STTR Small Business Technology Transfer: SEE SBIR/STTR Small Business Technology Transfer

strategic alliances: Drug development is extremely capital intensive, costing an estimated $500 million and taking 10 years or more to bring a product to market. Most biotechnology companies have no product sales (oft-quoted revenues and exports consist mainly of interest income from invested capital and income earned from alliances) and lack the resources to exploit the products they are developing. For biotech firms, licensing brings in much needed income and improves access to the equity markets by validating their commercial potential to outside investors. The multinational pharmaceutical industry in turn gets an infusion of new products and technologies to sustain earnings at a time it is suffering from a dramatic decline in new chemical entities. Product Definition, The Biopharmaceutical Sector, Industry Canada, 2003 http://strategis.ic.gc.ca/epic/internet/inbio-pha.nsf/en/df00020e.html#2.1

May refer to a joint venture, partnership or an alliance network.  Strategic implies that one (or each) companies have something unique to bring to the agreement. (Not all alliances are as strategic as their participants initially hoped for.) May well involve more than two entities.

TRAs Technology Research Associations: Japanese groups working through MITI (now METI).

technology consortia: The era of companies doing everything in- house has passed. Collaboration of competitors in the early phases of the innovation process can result in great benefits for the entire industry.  In the US pre- competitive R&D consortia have flourished since passage of the National Cooperative Research Act (NCRA) in 1984. Japan had Technology Research Associations (TRAs)  even earlier.  The development of standards by consortia can play a useful role in emerging and disruptive technologies.  Consortia can share R&D costs and risks, particularly when existing technologies are in flux.  They can work against short product life cycles requiring high frequency of innovations. But new and truly disruptive technologies are a potential minefield.  Shared and complementary visions, governance, finance, communication and trust can be difficult to maintain. Intellectual property rights can be problematic.  

technology service agreement: Often refers to information technology, including agreements to maintain, service, customize and update information technology.

Bibliography
Insight Pharma Reports Strategic Alliances: Synergistic Path to Value Creation 2010

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