The Right Reason and Way to Approach Strategics

All right, so the next panel that we have will discuss the right reasons and right ways to approach strategics. The speakers on this panel are from Genentech, J&J, Medtronic, and Novartis, and they all focus on finding opportunities and partners that will bring new technologies to their companies. They all do various types of deals: investment, licensing, acquisitions, and each of the speakers is going to talk a little bit more in depth about the types of deals they do and the particular spaces they're interested in.

But before we kick it over to the panelists, I wanted to introduce you to our moderator, Diego. Can you wave? I had the opportunity to work with Diego Ray when he was a visiting partner at YC. But prior to working with us at YC, Diego Ray was the CTO and co-founder of the clinical diagnostics company Geneweave, which was acquired by Roche. Currently, Diego is the co-founder and CSO at Endpoint Health, a Precision Immunology company. Endpoint Health went through YC in the winter 2019 batch.

Okay everyone, welcome Diego, Jennifer, Rachel, Ahmet, and Stacy.

All right, thanks Kat. So great to see everybody! Really exciting to be at a YC Bio event like this. It's the first one of its kind, and I'm hoping for many more in-person events, especially so. We have a really great panel here today. We're going to be talking about partnering with larger biotech, larger pharma companies, larger med device companies, and diagnostics companies.

And you know, if you think back to the importance of partnering for companies like ours, for those of you in the audience, you know, I think we're all a big fan of one of the original founder-led biotechs, Genentech. And you know it really allowed them to arrive at some escape velocity; was their deal with Lilly, for example. If you look back at other examples of what's really helped companies like ours in the earliest stages get underway, doing deals, partnering with well-established companies, is certainly part of that.

So we're going to talk a little bit about that today. We'll start off with some intros for folks on the panel. So if each member in the panel, maybe we'll go down the line here, could introduce themselves, the specific sector that they're in, the type of company—because we have folks here across various sectors in life sciences—and along the way, if you could define what the asset is when you're thinking of partnering. Because we have therapeutic assets, diagnostics, med devices, software tools, maybe from your point of view. So later when we go through some of the questions, folks can keep that in perspective of where you're coming from.

Finally, as you introduce yourselves, if you want to give a shout-out to any notable deals that you might be excited or proud about that you can mention as well. I have to remember all that.

So hi, I'm Jen Leeds. I'm heading search and evaluation for Novartis on the West Coast and in Canada, and I support translational medicine in our group, which is the Early Clinical Development Group, as well as oncology. So my geographic role is across all therapeutic areas that we're interested in, all modalities, and then I also have a special interest in oncology and translational medicine.

I've been with the company 20 years, 16 of those in the infectious disease area and heading antibacterial discovery, so this is kind of a new area for me as well. What was the second part of your favorite deal? Oh, but I didn't tell you what our areas of interest are! Okay, so four key areas of interest. Our CEO has recently updated all of this, so oncology, immunology, neuroscience, and cardiovascular are kind of the key top priorities for Novartis at this point.

I'm in NIBER, which is the Discovery through Early Development Division of Novartis, and so our remit is a little bit broader than that. We cover a lot of other disease areas because we've been sort of 20 years from the launch kind of thinking, and we cover all modalities. Actually, the deal that I am most proud of was an out-licensing that I did to a new code that we launched with Atlas, which just IPO'd. So, Third Harmonic Bio—so I was very excited to see that go, and that was an asset that we had in-house, which was out of strategy for us, and so I was able to out-partner that. I also do a lot of out-licensing of off-strategy assets from the NIBER organization that aren't going to be fully developed by Novartis. Thank you!

Perfect! Rachel?

Rachel Ray: Um, not the famous chef! I am a senior director of business development within Medtronic. I really support the surgical innovations business; it's about a six billion dollar business—legacy Covidien. So I've been with Covidien/Medtronic for about 11 years. Our focus areas are more on the surgery side, of course, with the name surgical innovations across all approaches—so open, lab, robotic. We partner quite closely with our operating unit, the surgical robotics operating unit as well.

So we look at key specialties within those areas: bariatric, colorectal, general surgery, thoracic, and GYN, as well. So very excited to be here today! My most notable deal, I would say, is probably when I was really just getting my teeth into business development. I was put on a carve-out deal—so a carve-out from a public company. We actually acquired Smith & Nephew's gynecology business back in 2016. So that was the first time I really led a deal, and it was a great opportunity for me to really dig in, but it also started our view towards specialty focus areas where Covidien was much more product- and tool-focused, and Medtronic is much more specialty procedural-focused as well.

So it started that whole viewpoint and started going that direction. So the business has been great, the team has been great, and it was very exciting, and I still help support our gynecology business as well. Thank you!

Stacy?

Stacy Feld: Hi everyone! I'm the regional head of Johnson & Johnson Innovation for West North America, Australia, and New Zealand. Johnson & Johnson operates across three main business units: pharmaceuticals, med tech, and for the next few months or so consumer health. As you may be aware, we announced at the end of last year that we will be separating and spinning out the consumer health business to be an independent company.

Johnson & Johnson Innovation is a global platform that focuses really on the breadth of ways to engage with external partners, really looking across company formation, seed and late-stage financing, early partnering, late park partnering. We'll talk a little bit more as we get into the dialogue. We operate across four regions, as I said. I lead our West North America region, and the idea is to get to the table early with the likes of all of you entrepreneurs, startups, and academic researchers to build relationships early on and to help shape those relationships toward accelerating healthcare solutions to market.

I'm going to highlight a deal that my team signed last year with a company that was a member of our J Labs incubator in San Diego. They have a platform technology in the antiviral drug conjugate space, and we partnered with them last year to leverage that technology to develop next-generation influenza therapies. I highlight it because I think it's a really important example of that long-term relationship building—getting to know a company years, literally years, before a partnership comes together, building that trust, building that relationship, helping to shape the direction of, in this case, a platform; in some cases, it's an asset—enabling the right timing to come together for a partnership like that.

Thanks! Summit?

Summit: Hello everyone! Good to be here. So, I lead business development for Genentech. I joined Genentech as an intern in 2005; it still feels like yesterday—it's been 17 years since then. Over those 17 years, I have probably spent time in almost every organization or function at Genentech. Eight years ago, I decided to take on a role in the business development group, and currently, I oversee the group.

Our team is responsible for end-to-end business development, so that includes identifying companies, screening them across the entire world, and then executing partnerships for whichever opportunities might be of interest to us. Our interests on the therapeutic side are focused on immunology and infectious diseases, oncology, neuroscience, ophthalmology, and rare diseases. We're also interested in technology platforms that can help accelerate or augment our drug discovery and development efforts.

We have a significant focus now on personalized healthcare and digital, which quite a few companies over here would fall into that category. A deal that I would like to highlight that I'm really proud of is that historically Genentech has always been about "follow the science and do whatever it takes to advance medicine for patients." About a couple of years ago, we decided we wanted to do something a lot more in neuroscience.

It is one of the hardest areas to really crack and requires a diversity of approaches. So we decided to bring all the genetic scientists and clinicians who work in neuroscience at Roche, which is the parent company of Genentech, that ended up acquiring all the leading academics and clinicians and scientists at UCSF, University of California Berkeley, and University of Washington—all under one umbrella to really do science without borders. This is our biggest academic commitment and the work on some of the deepest and most challenging problems in neuroscience, developing animal models, figuring out what is the best win, the best modalities to be able to apply.

People like Jennifer Doudna, Miklarepe, Steve Hauser—these big names are all a part of this group, so really proud that we were able to do something like that. Awesome. All right, thank you everybody!

So we'll go through a few questions, and you know, feel free to chime in. Not everybody has to answer as we go on. The first question I think is, you know, start at the beginning. You mentioned, Stacy, about getting access to companies like the folks here in the audience as early as possible. When is the right time—in terms of company stage or stage of product development? How early do you want me to start?

Sorry, yeah, sure! So yeah, I guess with my earlier comments as a backdrop, we do look to build relationships early as well as the fact that we have a breadth of offerings from incubation to strategic investments to partnership. We don't think about the right time; we think about when's the right time for the partner and then what's the right tool, if you will, or what's the right path to really build that relationship.

And those paths, whether it's a partnership or an investment or some combination of the two, may not be mutually exclusive. So it's really more about when is the right time to engage with a large company. I mean, we're all sitting here representing really large companies, and for early-stage companies, you know, the proverbial two gals in a garage—that's a huge undertaking to even just go through the diligence process with the likes of the companies that are up here.

So part of the reason why we start early is to build toward that relationship when, you know, we're putting pen to paper, developing a business case, going through our governance process, which takes a bit longer than the decision-making on the smaller company side.

It sounded like it was almost, as opposed to thinking about it in terms of just kicking off a formal process, that there was some relationship building at the beginning. Is that true for everybody?

Yeah, I mean one of the reasons that I'm sitting here today and the way I why I like to do as much Outreach as I can, at least in the region that I'm responsible for, is for exactly that reason—it's to start early. So I always encourage people to just contact me or, you know, mingle at events or come with any questions or show me, you know, the cool technology that you have because we can help guide you in what it would be that our scientists would be looking for when they're, you know, evaluating an opportunity.

We can help you understand and demystify the partnering process and the types of deals and deal structures that we have. We can help you understand whether the direction or, let's say, the indication that you might be thinking about at the beginning could be a really good way to exemplify a technology. And you don't necessarily have to match it exactly to our indication interests, because, you know, we can usually see whether there's a value to transferring that to, you know, a different project or problem.

So, you know, a lot of times people go on the websites and try to see, "Oh, they're into this, so I'm going to try to, you know, fit my round peg in this square hole," even though all the data that I've generated is over here. I'd rather see the data that you've generated over here because we can figure out whether that's going to be translatable. So yeah, focus on what you know best. Talk to us early, and it's really a scientific dialogue. I mean, that's the origin and the endgame of all of this.

Just to add on to that, if you start a little bit earlier in the process, you can also assess culture fit. So whether it's acquisition or whether it's a partnership, you want to make sure that you feel that bond with whatever company you're talking to. So part of that is how you relationship build at the beginning and making sure that both the target, whether it's the company acquiring or the company partnering with, or the startup, that you all are both aligned to the same goals and the same objectives.

So I would say, similar to the rest of the folks on the panel, the earlier you start could give you a little bit more direction on who your potential partner is longer-term.

Great. Yeah, and so one of the—we heard it actually as a highlight of the conversation earlier in the fireside chat—that you know speed is of the essence for us small companies. We want to move as quickly as we can, and working with large companies is painfully slow, right?

Maybe it'd be great to hear from folks on the panel here what are the right ways to speed things up and maybe, just as helpful, what are the wrong ways to attempt to speed things up? Any specific examples would be great to hear from.

Can I start there? Okay, so first of all, I just want to clarify that although there is a governance process that we have to move through, and sometimes those committees meet monthly, a lot of the timelines are really around that. It's just scheduling. We actually find that we're not the ones holding up the process. Often the companies are either working with outside counsel that slows things down or they have advisors or board members that are, you know, kind of having to be constantly a part of the process.

So I actually—I’m in my experience; we are frequently waiting on the other party. Which is fine; we have plenty of things to do. It's not like we're sitting around waiting for it, but it's just— I don't think it's actually true that it's necessarily slow on the big Pharma side. I mean, we're very clear about how long it's going to take based on the governance. After that, we're engaged, you know, all the time!

Two of the mistakes that I see: One is having a very rigid partnering model and kind of coming in very hard and saying, "This is it! This is the kind of partnership that we want, and we're not going to be very flexible," whether it's because of your board or a model that you've picked. That can slow things down because we're actually quite flexible, but we're looking for the best model for the individual process.

The other thing that slows down is having to use external either consultants or attorneys or, you know, people that you don't have at your fingertips all day long. So that can slow things down, and I not frequently, but more than occasionally, see companies that leave too much of the discussion up to their attorneys rather than owning, you know, that conversation and having the attorneys work for them.

So I would just be mindful of that. You know, it's your deal; you're driving it. They work for you, and make sure that they're not taking advantage of—I mean, my husband's an attorney, so I can say this without getting in trouble—but that often slows things down and breaks things apart where it's unnecessary.

Maybe I'll add just a couple of things. One is just knowing what you're looking for right in that interaction that you're having or the conversation. Just hoping something is going to happen is usually kind of, you know, when you find out that I'm not getting to a particular outcome.

So if you're looking only for specific guidance or attraction—whether we're working on the right problem—we just want to be on your radar. I mean, that conversation can happen fast. If you're coming to specific a partnership discussion where you want to have a partnership, you also want to have a truth-seeking conversation with the big Pharma, which is, "Hey, what do you think really is the right deal model?" Because every opportunity is going to lead to a specific deal.

As you know, it was just mentioned that if you have a very rigid mindset in terms of what deal you're looking for, and if the big Pharma or the company doesn't think that's the right deal, those conversations are really not going to go anywhere. So keep driving for the clarity and specificity and the feedback from whoever your counterpart is at the big company in terms of what's possible here, what's not possible, and then just go with that.

Maybe I'll add a few comments on this point. So we are set up, as I mentioned, regionally in hotbed innovation markets with teams that represent our therapeutic areas on the pharmaceutical side. They virtually mirror Jennifer's comments: oncology, immunology—we do have an infectious disease and vaccines group—cardiovascular, metabolism, retina, and neuroscience.

Then we have scientists on our team that are focused on innovative platforms and new therapeutic modalities. So I think having the first touchpoint and maybe the second, third, and fourth really focus on the science and where the unmet need is, where the transformational opportunity is, and continue to build those counterpart relationships.

So finding your scientific champion, finding your business champion, and then following those relationships through that getting-to-know-you phase, the diligence phase, the deal discussion phase, in whatever direction the deal discussions go. That's how we work, and we try to be really transparent about those relationships because the scientific leads that are here in our region then report up through their respective therapeutic areas within J&J, thus having the clarity of the strategic priorities and the ultimate decision-making in governance.

I'm going to throw out one don't which might be controversial, but I think at some point inevitably in the process someone thinks it's a good idea to reach out to our CEO to try to shake things up a bit. You know, if you have a relationship with Joaquin, super! But it doesn't tend to speed things up going all the way up to the top because it then kind of trickles all the way down. And it goes back to, you know, where the accountabilities and responsibilities are, and I understand, you know, the notion of, you know, wanting to get to the highest person at the pyramid, but it doesn't always have the intended outcome.

I know, thanks! Something came out of a comment, though, that seemed a little bit counter-intuitive, and it may be great to elaborate on, which was, you know, being flexible but knowing what you want. I'm wondering if we could elaborate on that a little bit more. I think that might be especially interesting for companies that have an enabling technology that could be used in a number of ways.

Going back to a comment about, you know, you guys know best what you need, we might have a lot of really great ideas, but it sounds like the best approach is to show the science, the capabilities, and then see how the conversation evolves. But there's some vagueness to that, so it would be great to maybe comment on that topic.

Yeah, happy to expand upon that. Let me take a specific example, right, with two different extremes just to make the point. Let's say you are working on an interesting platform, you have some generated interesting data, and you're thinking, "Oh, maybe I want to get acquired," or "somebody should acquire the technology." But someone like us is taking a look at it and saying, "This is interesting, this is a nice experiment, it's good signal generating, but I think we should work on a pilot here or some feasibility study," which could take six months or 12 months.

We're going to give you some clinical data; maybe you can utilize your platform and see, "Okay, you can identify the patients who respond or not," and then we'll talk about whether there's a partnership in place or not. Usually, those conversations go about a little bit around the way, and you feel like you've spent three or four months getting to that particular outcome.

I would say having those direct conversations with the scientists initially when you're building those relationships and saying, "Okay, how are you seeing it? What are the opportunities you see with it? What are the gaps you see by that, and what's your perspective, what's your plans?" are crucial in terms of reaching alignment very clearly and early on in terms of what's possible with respect to a potential partnership, right? And then—which could be, as I said, a very, very early on feasibility study—or it could be as good as, "Okay, we want to really utilize this technology for some specific applications within our drug discovery and development efforts"—could go a long way in terms of how smooth the process feels!

Another example that I'll give is, you know, we often hear, "Well, we want a co-co deal; we want to do a co-development, co-commercialization from a company with like four people. Yes, just leaving their postdocs." And it's the kind of thing where the technology is going to advance pretty quickly.

You know, it's something that if it's going to work, it's going to work in the next, you know, two to three years. Are you really going to build a commercial organization and do you understand that when that happens, that it often comes at the expense of research?

Dear dear, does your board think that that's the way it should go? If they do, why? Right? So is there a reason why they—and a lot of times you hear, "Well, we want to, you know, build value in the company; we want to bring value to the company," but you really have to think hard about is it realistic at this point, or is it better that you learn about the development and commercialization of something that your technology can enable by being in a partnership? And then maybe, you know, a couple years down the line, that becomes your deal structure preference.

But I think you just have to also think about how much can you really bite off, and are you really willing to build the capabilities to do that? Can you attract the right talent to do that, given the stage that you're at, and the experience that you have? So that's just another example.

All right, thank you! So do your teams ever proactively go out and look for opportunities, as opposed to the inbounds? If so, what's that process like? Are there other things, what are the things that we can do to increase the chances of being seen along those lines?

I'm happy to start. So we're all here today; we're all here to see you, to meet with you, to network with you. I think most of us go to different events like this as well throughout the year—different types of conferences, whether it's specialty-focused conferences or big congresses as well. So we do go out and outreach to you all and certainly take inbound calls as well.

We have teams within our organization but also see things at conferences or hear about things out in the field and want to learn a little bit more. So we do proactive research and outreach to you all to learn more and see what stage you are at and if there's an opportunity to learn more, to partner, to continue conversations down the road—whether it's six months—and see how you all progress along your journey.

So we're there, learning about the different industries, learning about where the innovation is coming from, and I'm excited to be here today again to see all of you and learn more about what you have generating in your brains and talk to you later today as well!

A few things that I could highlight that we do also is almost on a regular basis—we're meeting with all the venture funds out there and looking at the portfolio companies that they have. So it's a very systematic review based on the areas of interest.

So my team will kind of, you know, organize meetings almost every two weeks; I'm meeting with one particular venture fund out there and looking at the companies they have in their portfolio. So that's another way for a lot of those companies to essentially give either a one-pager or sometimes they even plan for a like a 10-minute pitch as a part of those events.

We also keep a database for all the new companies that are getting started so they do make it to our list, and then sometimes we might reach out to them when we feel like, "Okay, this is an interesting area that we want to get to know more." The JP Morgan event, which happens in San Francisco, is another great way for either us to reach out or for companies to reach out to us.

Yeah, maybe I'll build upon what's been said because clearly the approaches that have been mentioned are things we're here today as well. Coming back to I think the question, I would say that we primarily proactively look for opportunities, and it really starts with what are the strategic priorities and aims of the therapeutic areas and franchises because we really work in partnership with them.

So with the insight of where the gaps are, where the asset and technology priorities are, we're going out and looking for the most promising innovations wherever they may originate around the globe. So we take a coordinated approach with our colleagues in other regions to find the most breakthrough solutions in a particular area.

In addition to a lot of the approaches that have already been mentioned, I've been sharing that we do take this approach of building relationships over the long term and having that be across academic centers, with venture funds, with companies, maintaining touchpoints every quarter if it's too early to partner so that we're monitoring progress and seeing their readiness to want to engage in a little bit more of a conversation.

Then the last thing I'll mention is, as part of our incubation efforts, we have 14 incubators under our J Labs brand around the globe—three in the region that I lead: one in South San Francisco, one in La Jolla, and then one in Houston—and then the remaining kind of peppered around the rest of the country, North America, Asia, and Europe.

These are relationships that are call it "no strings attached." We provide state-of-the-art lab space, prototyping space, mentorship, a window into J&J, helping to shape the direction of the science or technology, and through that organic relationship that's built, partner with companies again when the time is right.

So that's another element of proactively looking at companies and then engaging with them as the technology or the asset matures.

Great, thank you! So maybe back to some tactical questions. A lot of the time, the company that folks are reaching out to is a very large organization, and a big question oftentimes is where's the front door? Right? Who should you reach out to first, and sometimes from our point of view, we think of, well, should we go to therapeutic area tech, you know, functional folks, or should we go to the BDE folks? And maybe we get funneled to the right place, but usually getting to the right first person can be very important.

Any tips, advice, or best practices for how to find the right front door?

I mean, I would say, you've heard that there's, you know, sort of regional roles as well as a therapeutic area focus. I'm in this role—in the regional role—for exactly this reason: you only need one door. Right? So if you're based on the West Coast or in Canada or you are involved with a VC or an incubator or accelerator in West Coast or Canada, it's me, and then I can easily triage and funnel things to wherever it needs to go.

So we're trying to make it really easy! You don't have and, to be honest, you know, our therapeutic area BD partners will sometimes change. You know, they decide, "Okay, well, I've done enough in oncology; now I'm interested in immunology," or whatever, so—and it's not necessarily easy to find out that that's happened.

So the easiest thing to do is start with the regional heads, and that's your single point of contact! It can remain that way even if the company moves. And yeah, we will find the right people—the right scientists to get involved.

You're welcome to contact our scientists. I mean, they publish it all the time; their emails are, you know, in their publications. The challenge there is that they are not really focused on the partnering process, right? So it's not all that effective if you want to get like one person to kind of guide you through the whole relationship building. It's fine if it's just, you know, "I saw your paper; I'm interested in talking to you." I mean, we're not going to tell you you can't reach out to a scientist—that'd be great if you did that—but if it's specifically about the partnering process, the best place to start is with the BD partner that you know you have the easiest access to.

It's similar at Medtronic. Use LinkedIn—go to these types of events. Business development is probably one of the best ways you can start, or corporate development. Medtronic also has a ventures arm; you could reach out to—we have a portal on Medtronic's website—you could submit your idea through, and it gets funneled to the appropriate BD person within our operating units as well.

Even if, for instance, if you have a cardiovascular idea, you can still reach out to a non-cardiovascular business development person, and we can connect you to the right individual representing that operating unit. So I personally would start with business development; you'll probably get the fastest response time as well if you reach out to BD.

We actually refer to the four Johnson & Johnson Innovation regions as the four red doors into J&J. So it's very similar. That's why we're here—we want to help you navigate the behemoth of, you know, these large companies. And even though an opportunity may not be either regionally focused with a respective team, or it might end up being a later stage opportunity that's taken forward by our late-stage BD group, we're here to help navigate and find you to the right place.

Our website has a lot of information on it that you can search by region; you can search by, you know, if you're interested in strategic investment on the JJDC site. I will tell you that when there's something that's inbound, we think about it first in terms of the science and the strategic fit—not what the deal structure looks like. So we're assessing at, you know, the most fundamental level.

So even though your first touchpoint might be an investor from JJDC, we're going to look at it, taking a step back, and saying, "What is it that you're interested in and how might we, you know, bring something to the table other than our capital?"

And I think having said all of this, I would go with where you have the warmest relationship. Certainly all of us here on the partnering and BD side, this is what we do every day. But if you have a scientist or someone in regulatory or someone that you know at the company, the chances are they're going to navigate to us anyway, but it is a nice intro when it's a little bit warmer.

Maybe a couple of quick tips. If you're reaching out to scientists, it's probably best to do that at one of the scientific congresses or conferences that, if you're presenting there and if they've seen your work, then it's much easier for you to connect with them. Because what happens then is they reach out to us in business development and say, "Hey, I actually saw this talk; this is an interesting technology platform. Can you please help me look into it?"

So kind of, you know, I've already checked one of the boxes, right, that BD would typically do. If you are reaching out to business development for Genentech, it's a single business development group, so very easy to reach out to us. Our email addresses are on our website.

If you do reach out, please do two things: send a non-confidential deck and write at least one paragraph—you want to make the job easier for the other side, right? In terms of what the technology is, why is it useful, and what might be synergy, right—with Pharma here, so that the business development person can essentially take that and—we have BD people who are scientifically proficient, but they deal with hundreds of emails a day. Right? How do you make their lives easier as well? So those two things, if you do, I think it has a good chance; at least it gets the right assessment.

Great, thank you! So we'll go with a couple last topics here. The first one—so we'll fast forward to, okay, we've gone through a process, and now you're entering alliance management land in the organization. Some quick tips maybe for when you get to that stage, and is it common that it's smooth sailing after that, or are there lessons learned that could make things fall apart even at those later stages?

I would say it's as good of a smooth sailing as you go from dating to marriage, I guess. There are a lot of things you learn while you're working together, and what you want to do, though, is you want to find the right partner, right?

Kind of, you know, if you're going through a partnering process, you may be talking to three or four different companies. You have to recognize that when you do work together, your aspirations as a company are going to change. The science that you're working on, that's going to evolve. And who is going to be the right partner over there who values you and what your aspirations as a company are and is going to be flexible enough to go on that journey with you.

So those relationships that you build during that partnering process—it's a good biomarker for what's going to happen once you are in alliances. Historically, we have had companies where we partnered when they were very young, and we have had multiple contracts with them over the years, so we've expanded relationships as their capabilities change and as our capabilities change.

So you're looking, obviously, always for that right partner, recognizing that whatever you're signing today on that contract, it's not going to be the same two or three years from now. And then you're not going to be the same company two or three years from now.

Great! So we're almost out of time here, so maybe we'll end with a last one that might be on the tactical side as well. For the times that we're in now, with what's going on in the markets in general, in the biotech markets in particular—has anything changed? Is anything evolving in the way you do deals, the way you look at deals or the process?

It'd be interesting to hear if there's anything that's specific to the times now or that the direction that things are headed moving forward.

Yeah, I mean, I think what I'm seeing changing, and I referred to this earlier, is the expectation of the partner company, you know, the smaller company coming in is getting a little more realistic, right? It's leveling out! It's not every company is going to build a commercial organization tomorrow.

I think that it's becoming a little bit easier because the expectations are a little bit more down to earth, figuring out what do you bring, what do we bring, how do we make this a good collaboration versus the peak time where everybody thought that the money was just going to keep flowing endlessly and that they were going to be able to build out very quickly and be able to just have endless resources to do their work. So now it's becoming kind of like the way it was before that, and it's more focused on what does each party bring.

So I'm seeing that it's easier to partner now, frankly.

Yeah, I would say financial solvency of the companies that we partner with has definitely become a factor that we really didn't worry about until last year because the capital access to capital was so easy, and that also influenced, as Jennifer is pointing out, what kind of deal architectures and structures these companies were looking for.

So the way that has changed—kind of, you know, the way we do partnership is, at least on a couple of different deal architectures, we're more cautious doing option-type deals now because you rely on the partner to take the program up to a particular stage and then you can exercise your option. There's no guarantee they're going to have the capital or the capabilities or the resources to continue to take the program up to a particular stage.

So being very cautious with option deals, we're also being very cautious in terms of how much upfront we put on the table versus ensuring that there is going to be access to capital as the technology platform or the program moves along, and we continue to support the company as the technology matures.

So those two things are definitely changing. We're also seeing what happened in the last few years was companies coming out with Series A with hundreds of millions of dollars and 300 to 500 employees, but they really didn't have that many programs to keep those people employed.

So companies are going through or downsizing right now, so that's also a concern for us in terms of whether they have the right capabilities or whether they'll continue to have the right capabilities to move the programs along. So doing due diligence both on the financial side as well as on the capability side and the resources side has definitely become a factor, and we also have to be very thoughtful in terms of what are the right deal architectures so that both of us can come out of the lull that we are in right now, and then the underlying science will continue to evolve.

Yeah, I think what I would add is for those of us that have been in this crazy world of biotech and biopharm for a few too many decades that I want to count, things are always cyclical. And so the cycle that we're in right now is volatile and there's kind of the tale of two cities: like the public companies that had the exuberance of 2021 went public and now they're trading under their IPO prices—capital sufficiency is an issue.

So if you're looking for potentially things on sale, there's a lot to look around for! I think, you know, being more on the early stage innovation side, I was really interested to see a report that McKinsey put out earlier this year on best practices and sourcing innovation—and it points, you know, to some extent, seeing kind of the trend if you will of deal-making and value being created in that early stage.

So there's some really interesting data that I would encourage you to look at on, you know, the top six outperformers of biopharm that really create value and do deals early, early stage.

Perfect! Thank you! Well, I'd like to thank our panel for joining us today. I think some of them might be around, so if you see them, take the opportunity to come and chat. Thank you very much! [Applause]