Preparing for a pharmaceutical deal can be a daunting prospect. Among the many questions to consider when presenting your product or technology to a potential partner or buyer are, what preliminary information to include, how to present your data and the best way to outline what you are looking to achieve from the partnership. In addition, it helps to have an indication of what potential partners are looking for in terms of both a partner and a deal, including areas of supply and demand.

Each year for the past 9 years, inVentiv Health Consulting, part of INC Research/inVentiv Health, has surveyed pharmaceutical and biotech dealmakers to assess their intentions for the next 12 months and put these findings into context in a report (Box 1). One of the key findings from the 2017 Dealmakers’ Intentions Study is that companies are being more selective about who they engage with, as suggested by progress to Confidential Disclosure Agreement (CDA) rates, which were expected to be much lower in 2017 than in years past (27% in 2017 versus 65% in 2016). There were also mismatches in supply and demand with regards to project phase and therapeutic area (Box 2). This feature aims to provide guidance on the steps and information to include in non-confidential outreach materials to help you make your strongest case to potential partners in this competitive climate.

Box 1: Dealmakers’ intentions in 2017

Based on this year’s Dealmakers’ Intentions Study, dealmaking in the life sciences was expected to be robust in 2017, with a total deal value including financing, M&A and partnering/asset purchases in the low $200 billion range. Although lower than the peak of ~$425 billion in 2015, this would still rank 2017 among the top three years in terms of value since our first Dealmakers’ Intentions Study 9 years ago (see figure). Emerging companies increasingly have more dealmaking options, with the emergence of new buyers and a growth in financing in recent years. Financing to small-cap (less than $1 billion) and private biopharma companies saw continued growth in 2015, driven largely by a record number of venture financings, and remained steady through 2016 at over $20 billion. The share of large-cap (more than $50 billion) biopharma representation in partnering and M&A deals continued to decline in 2016, as the number of large-cap deals declined while the number of small-cap deals increased, and this trend is expected to continue in 2017. Source: BCIQ DealMakers Database, accessed May 2017. www.biocentury.com/bciq-marketing/bciq

The initial outreach: what story will you tell?

The first step in outreach to the potential buyers or partners that you have identified is the creation of a nonconfidential slide presentation, typically targeted to their business development, partnering and/or R&D teams. This slide deck should be thought of as a ‘teaser’ providing enough information to tell a compelling story about the importance, value and potential of your technology or product, but without giving away confidential or proprietary details. The goal is to spark genuine interest, make the business development team curious to know more, and arm them with the content they need to generate interest within their organization more broadly.

The targets for this initial outreach need to be identified through a prioritization process that involves a close look at overall supply and demand, as well as therapeutic areas of focus, adjacencies, products already in the pipeline and how your product or technology might help the company strengthen or expand its strategic objectives. It is also important to do some investigative work on the company’s appetite for partnering by reviewing their websites, press releases and financial statements. You should also look for precedent transactions to see who is investing in areas that overlap with your technology or disease area. While you are conducting your research, it is extremely helpful to attend therapeutic-area conferences and note potential partners outlining interest in the space or investing.

Partnering outreach should typically start 18–24 months before you want to start the deal. Do not wait too long if you are relying on the deal for financing, as you may find yourself disadvantaged at the negotiation table if you have a limited cash runway.

Box 2: Supply and demand — mismatches and opportunities

The 2017 Dealmakers’ Intentions Study indicated a greater mismatch between the assets that buyers want to buy and those that sellers want to sell than in 2016.

Looking at interest in assets by development phase in 2017, buyers have a >200% higher interest in acquiring phase 3 and marketed assets than sellers have in parting with them (see figure). Conversely, sellers have a >200% higher interest in selling their preclinical assets than buyers have in acquiring them; 54% of sellers have preclinical assets available, but only 24% of buyers are interested. This is a decline from 2016, when 32% of buyers were interested in preclinical assets, which suggests that buyers are becoming more risk averse and are waiting for later-stage products with more data.

However, preclinical assets are still generating higher overall interest relative to assets in phase 1, 2 or 3. Preclinical assets can be acquired much less expensively and are attractive as buyers narrow their therapeutic areas of focus and engage in stiff competition to break into hot therapeutic areas or gain technological advantage.

The supply and demand dynamic in the middle of the market (phases 1 and 2) is far more balanced, continuing the trend we saw in 2016. Overall, the preclinical phase continues to be a relative buyers’ market, and phase 3 and marketed products are relative sellers’ markets.

In comparisons between therapeutic areas of interest and sellers’ available assets, there are also significant areas of disparity in demand or supply of assets. A sellers’ market exists at all phases in the areas of hepatic disease (including nonalcoholic steatohepatitis), women’s health and most of the central nervous system (CNS)–neurology space. Additionally, a sellers’ market exists in pain, renal and vaccine therapeutic areas, and in some phases of the oncology, autoimmune, inflammation and CNS–psychiatry spaces. The sellers’ market in these areas will most likely result in significant value increases for the more promising assets.

On the other hand, the supply of assets—most notably, preclinical assets— overshadows buyer demand in several therapeutic areas, including cardiovascular, oncology, CNS–psychiatry, inflammation and autoimmune diseases, making these buyers’ markets. Compared to last year, buyer enthusiasm appears to have tapered relative to supply with regard to infectious disease, oncology, autoimmune and CNS–psychiatry assets. However, with regard to oncology, the volume of development activity has kept this therapeutic area in a buyers’ market mode overall for the second year in a row.

Understanding these dynamics will help you specifically target potential partners/ buyers and leverage your strengths and overall value proposition to the greatest advantage.

The slide deck: short but powerful

The nonconfidential slide deck should not be large—maybe 10–15 slides at most. This means that each slide needs to count and deliver a substantive message. The actual length will depend on factors such as the background of your target audience and the relevant product or technology issues you need to present to paint a clear picture of your offering.

Given the complexity of biopharmaceutical products and technologies and the problems they attempt to solve, following a one-size-fits-all general template is less important than having a good grasp of the key topics investors will want to understand and how to present this information most logically and effectively. Data to support your case will be critical throughout the deck. You probably know your facts and stats intimately; the challenge will be to highlight the data that single you out, and support and move your story forward with clarity and conviction. Examples include the following:

• Market size and growth

• Competitive landscape

• Treatment flow

• Key stakeholders and unmet need

• Pricing and reimbursement trends

• Market access

Below we discuss the essential points to cover:

1. Who are you?

The first slide in a pitch deck should include company highlights, that succinctly describe your company’s purpose, focus and mission. Describe the product or technology in top-line fashion as well as its origins (if interesting/relevant). Convey your commitment to the cause and what you believe you are poised to achieve. Depending on your company and target audience, you may also want or need to include some financials such as an equity overview and investors list.

2. Why is what you are doing important?

You should be clear about the problem you are solving and its scope. For example, for a potential therapy, provide a brief but resonant overview of the disease and its human, social and/or economic consequences. Most important, clearly establish the unmet need. Use facts to demonstrate the dimension of the problem, but don’t overwhelm with extraneous facts and figures that don’t directly advance your story arc.

3. What is your solution?

Describe how your product or technology addresses this problem and fills the unmet need. Explain what it does—and potentially how it works, to some extent—but don’t disclose any confidential information. Any clinical data you have available to you will constitute the other essential building blocks of your story. Use them to demonstrate what you’ve achieved, your likelihood of further success and what your results suggest about the potential for addressing the problems (‘pain points’) in the current market.

4. What does the competitive landscape look like?

Summarize the ‘state of play’ —what is currently being used in this disease or situation and what the strengths and weaknesses are. Demonstrate awareness of potential competition on the horizon and, as appropriate, the challenges it will face, as well as your plans to mitigate competitive risk. Re-emphasize your points of differentiation and potential for more effectively addressing the important problem you’ve identified.

5. What is your market opportunity?

The type and amount of detail presented here will depend on the category and your assessment of how well the market is understood. As much as possible, aim for insight, rather than numbers for the sake of numbers. But in general, be prepared to describe your target market (and secondary markets, if applicable) and show market size estimates with credible sourcing. Your sources should include some primary research with physicians and payers to drive insights for volume/uptake and pricing potential. Build on the information you’ve already presented to reinforce why you expect the market to be receptive to your differentiated asset and its value.

6. What is your access and adoption strategy?

Explain what the current reimbursement landscape looks like, what the risks and challenges are and how you envision addressing them.

For phase 2 and 3 assets, it is particularly important to keep in mind that the goalpost for commercial success now stands not at regulatory approval but, in this new era of value-based care, farther downstream with access and adoption. The ability to generate real-world evidence (RWE) is critical in this regard, and the earlier you can demonstrate that you are planning for this in the product development cycle, the better. Multiple stakeholders—payers, health technology assessment agencies, integrated provider networks, advocacy organizations and others—are increasingly depending on RWE beyond safety and efficacy to understand a product’s value proposition. Savvy investors and business development people are realizing this as well, so if it is appropriate to your situation, consider ways you can offer insight into your access and adoption strategy.

7. What is your path forward?

Describe the current status of your product development and what additional research is in progress and/or planned, including RWE and health economics outcomes research initiatives to support access and adoption. Be clear about your next development milestones and timelines, and be prepared to present or discuss any notable risks and your plans to mitigate them. Demonstrate that you have clearly defined your regulatory pathway, highlighting any key interactions with regulatory agencies (meetings about investigational new drug (IND) applications, orphan designation and so on). Consider to what extent disclosure of the patents that support your asset will bolster your case, and include this information if appropriate.

8. Who is your leadership team?

Whether to put this last or first is often a judgment call that can depend on how you are building your story. For instance, is the story you’re telling the outgrowth of previous work of the leadership team and therefore an essential part of your company’s identity? Or does the team’s story work better to support and reinforce the likelihood of success? In either case, it is an opportunity to spotlight the team’s experience and accomplishments and what they bring to your particular table. If you have a board, advisors or consultants, include them as well.

9. Thank you!

Accompany this with an invitation for discussion and questions, and be sure to include clear contact information for follow-up.

Closing thoughts

One of the key takeaways from the 2017 Dealmakers’ Intentions Survey (Box 1) is that although dealmaking volume this year is continuing to level out in a range closer to historical norms (but still ranking among the top three years in total value since 2009), decision makers are continuing to think creatively about new partnership opportunities. True innovators can expect to benefit from the emergence of new buyers and more financing options from the capital markets, which will allow them to hold on to assets through to commercialization in some disease areas.

However, success with this strategy or any other business development opportunity requires a clear understanding of the long-term potential of your asset in a rapidly evolving buyer’s market and payer landscape—and especially the ability to effectively communicate that understanding in the most clear, compelling terms possible to achieve ‘break-through’ recognition of the opportunity you offer.