Partnering in 2023 – Finding stability in unstable times

As we enter the new year, I would like to take some time to reflect on 2022 and also look forward to what lies ahead for our industry and #partnering. The past few years have been challenging for many, considering the pandemic, the current financing environment and rising global instability. But, as I look forward, I am hopeful that we will continue to see fundamental scientific advances and positive change across the healthcare continuum.

Recently it has been a difficult time for the #biotech sector. The pandemic spurred enormous growth to biotech valuations (XBI roughly doubled from March 2020 to its peak in February 2021*) and the highest number of biotech companies going public in addition to a very active deal environment (>200 biotech IPOs and >150 deals across Roche Pharma Partnering). This trend then reversed in 2021, and we have since observed the largest biotech devaluation in recent history, with the XBI dropping to pre-pandemic levels and erasing any gains realised in 2020**. This tumultuous time has led to biotechs facing significant challenges with dwindling cash and lower valuations, making access to capital difficult or even impossible.

Looking forward to 2023, we are still living in a time of global uncertainty, and economic contraction; these challenges are expected to continue for the foreseeable future. So, what do biotechs and the whole sector need to do to remain resilient?

Reflecting on my own time as a biotech CEO in the distant past, I have always believed that there are two key questions a biotech CEO needs to answer:

1. Which scientific and medical area do you work on?
2. When, with whom and in what way do you partner with pharma relative to financing?

While the first question is a very personal decision in the initiation phase of all biotechs, the second question is increasingly important in the growth phase and in how biotechs navigate these challenging times. Choosing the right partner who shares similar values and is as passionate about science and your experimental medicine is vital. The power of partnerships, over going solo, is second to none and the numbers really speak for themselves. I am very proud to be a part of a company like Roche , with its 125-year long history of driving some of the biggest breakthroughs in science and medicine. But Roche would not be where it is today without mutually beneficial partnerships like our acquisitions of Genentech , our 20-year-old strategic alliance with Chugai and our 250 other alliances we currently have ongoing. Long-term partnerships with innovative companies are in our DNA. 

Why do partnerships bring so much to companies?

In a truly symbiotic and collaborative partnership, both parties bring their own scientific and technological expertise and complementary capabilities that allows growth and learning, to ultimately help advance new healthcare solutions for patients. I like to think of partnerships as a marriage; you have shared values and a shared vision of the future, you challenge each other to be better, every single day. It is not only about the initial dating phase, but about making this symbiotic partnership work for the long term, in the bad times and the good. 

In this challenging environment, we need to focus on creating a resilient and agile ecosystem so that we can continue to #innovate together. #Pharma and biotech both need each other to survive. In practice, bigger healthcare companies like Roche can provide biotechs with financial strength, acting as a buffer during times of economic uncertainty, while also contributing scientific and medical expertise. Smaller companies often are the more effective corporate structure for breakthrough discoveries and innovation to happen but require resources and scalability. Companies such as Roche , including our members Genentech , Spark Therapeutics, Inc. , etc., can offer this support to biotechs to help nurture their innovations and make their ideas a success.

To safeguard the long-term sustainability of the healthcare sector and to ensure we can continue to be a leader in healthcare for future generations, we have an obligation to partner in ways that nurture ground-breaking innovation and provide stability at the same time. This can take many forms including offering biotechs flexible deal structures and financial options. During the Covid19 pandemic, we saw processes and innovation accelerated and the entire healthcare ecosystem coming together to develop therapies. It was our common goal and drive to end the pandemic, that led to the barriers coming down to working closely together, where we all realised the full power of collaboration. So, what’s next? I strongly believe we can build on this sentiment of the last few years and find stability in these uncertain times by partnering with like-minded companies that share our passion for breakthrough science that may one day redefine patient care. Emerging new fields like the use of #machinelearning for drug discovery and development or exploring the potential of #organoids to discover and develop medicines in completely new ways fills me with tremendous excitement to bring medicine and healthcare to a new level of scientific advancement - hand in hand with the entire industry.

With this sentiment in mind, I’m looking forward to attending #jpm2023 starting on 9 January and to kick-off new and exciting collaborations for 2023 and beyond!

If you are interested in partnering with Roche and Genentech, get in touch with us.

*Source: XBI; **Source: DealForma.com database