Business Development Deal Maximizes the Potential of a Waning Brand

A top brand in a world-leading pharmaceutical company’s portfolio was in the waning years of its product life cycle. Yet, despite its financial importance (4th largest brand in the Company), little had been done to develop an end-of-life management strategy. Leisa Dennehy, co-founder of BioPharma Consultants, was assigned as the Marketing Director for the category. As her first priority, Leisa initiated a complete analysis of strategic options ranging from"stay the course" to "abandon”. Surely, Leisa thought, there must be something in between theses extremes that would meet our corporate goals while minimizing risk?

Analysis of emerging trends at the time suggested that smaller pharma companies were interested in licensing under-resourced, older brands. Why? They realized they could put the resources behind "forgotten" brands to tap into overlooked potential. But selling or out-licensing the brand had a major pitfall: after the big windfall of the out-licensing earnings, in future years,the Company would have to contend with a gaping revenue hole.

Breaking through the Chains of Tradition

"An industry environmental analysis made it apparent that a hybrid between a promotion agreement and a full out-license agreement could allow us to meet its future financial goals while minimizing risk and resource commitment,"says Leisa. She sponsored a "Deal Team" to bring this vision to reality and began evaluating potential partners.

The team began developing financial, legal, regulatory and marketing terms. But they had to work fast! The average licensing deal takes many months and it was already April. If the deal was not completed by September in order to transfer the brand at the beginning of the next winter season, the financial benefit sunder pinning the deal would fall through.

"I remember feeling like a presidential candidate asking for the vote when I lobbied the Deal Team to close a deal in six months," says Leisa." I painted a vision of how this would provide major financial benefits while minimizing risk. Apparently, my passion and logic struck a chord." Team members agreed to make the project an A priority. A team leader was assigned the mission to close a great deal with the right partner within five months.

Shattering All Normal Expectations

The team quickly issued an RFP, screened candidates, initiated due diligence with top candidates, finalized our choice, and negotiated a deal in 5 months. On time!  Never before in the Company’s history had such a complex deal gone from "idea" to"signed" in under six months. The structure of the distribution agreement gave Distribution, Sales and Marketing rights to the licensee, while the Company remained the owner of the intellectual property and continued to manufacture and administer regulatory actions. GW was able to discontinue all commercial investments, and yet still receive a guaranteed revenue stream each year until the license ended. This deal structure was novel at the time, in that is guaranteed that major financial goals would be met, but avoided the downsides of traditional out-licensing deals.

BioPharma Consultants