Susan Graff talks about Developing the target product profile for Roche’s external partnering opportunities




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Video title: Susan Graff talks about Developing the target product profile for Roche’s external partnering opportunities
Released on: December 15, 2010. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, Fintan Walton talks to Susan Graf, Global Head of Strategic Evaluation at Roche Partering.
How does Roche Partnering evaluate opportunities?
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at Biopharm America in Boston, on this show I have Susan Graf who is Global head of strategic evaluation at Roche Partnering.
Susan Graf:
Thank you Fintan.
Fintan Walton:
Susan, your group you are responsible for conducting that ever essential component which is evaluating opportunities, could you tell us how your group is organized and how you start to conduct some of that evaluation.
Susan Graf:
Absolutely, we are responsible for developing the target product profile for all of our external partnering opportunities developing our financial forecasts and ultimately a discount of cash flow model. My team is organized therapeutically so that they can develop deep expertise in those areas so that they can really add value to all of these assessments.
Fintan Walton:
Okay so how do you interact you are obviously within the Roche Partnering group?
Susan Graf:
That's correct.
Fintan Walton:
You are brought in at certain key stages so how does that work because you've got within Roche you've got dedicated individuals to find opportunities and so forth so how do you interact with that and how when you are brought into that evaluation process?
Susan Graf:
Members of my team are brought in at the very beginning once the finder has found something that they feel has a lot of merit the finder and the evaluator if you will are that core of assessment team, they get a project ready to take it for approval of diligent sanction so they are involved from the get go and would transcend any due diligence sanction and begin incorporating any thinking we learn in diligence into our commercial assessment.
Fintan Walton:
Right, so obviously there are stages involved in a process and that process being this looks interesting let's do a certain level of evaluation then it gets more interesting and you get deeper and deeper and ultimately get into negotiation and ultimately hopefully do some due diligence, so how is that organized so presumably when you've got something that looks interesting you may just do an initial evaluation would you or would you do a complete thorough evaluation right at the beginning?
Susan Graf:
It depends on the stage of clinical development if its pre proof of concept we will do a kind of an initial rough evaluation early on unless the project progresses and then we will continue to refine our assessment however if its post proof of concept so one of those later phase assets that we do know more about we will do a much more thorough in depth assessment right upfront even in advance of due diligence sanction.
Fintan Walton:
And so you've said that you group is organized by therapeutic focus and clearly that's important because each area has its own nuances and so forth so when it comes down to how you do those sort of evaluation you've talked about discounted cash flow analysis as part of your remit sometimes some organizations would not use a discounted cash flow analysis for early stage very early stage technologies is that same true for your organization?
Susan Graf:
We gate our activities so we would not get to the point of a discounted cash flow evaluation until much later in the deal process for early things like a research collaboration we typically would not go that well either we would use other evaluation methods we would look at deal comparables and things of the like.
Interaction with finders and negotiators
Fintan Walton:
Now in your evaluation you are building up a portfolio of assessment across all these therapeutic areas that in itself must be able to reveal to you where the true opportunities are, so is there a feedback to the finders and providing them with better knowledge about what sort of opportunities they should seek out so is there you know it's not just a one way traffic in this interaction presumably is a two way traffic going back to the finders and saying well in future you should be looking for something else not this, is that true?
Susan Graf:
That's true. My team I would say are true business partners to the finders we look at many therapeutic areas and as you know an area well you can really identify what types of products will address the unmet medical needs in our market so it's definitely a two way street in terms of what we think would be successful in the market place.
Fintan Walton:
Okay, now clearly when you get in you are supporting that group which are the negotiators the individuals that have to negotiate across the table you are providing them with information and knowledge around the areas that they need to negotiate, clearly that's an ongoing situation and presumably in that process you are continually updating your information as you get as they obtain more information or as the terms to start here in the negotiation process presumably your group are there modifying and modulating the results of their evaluation?
Susan Graf:
Correct it's a very dynamic process and its sometimes a real time negotiation with my team person other times it's a bit more send the term sheet receive one back but clearly a very dynamic process.
Fintan Walton:
Okay, so when you get to the stage of going into negotiation you are in you are at the due diligence stage now let's say and again that can happen at various stages in negotiation the post negotiation depending what the events and acquisitions so forth but when it comes to due diligence do you guys actually do the due diligence or is that at a separate group?
Susan Graf:
We have a team of due diligence directors that conduct and coordinate all of the input that we receive from the experts on our diligence team. Members of my team participate in the diligence in the sense that they take all of their learnings and incorporate them into what our commercial assessment looks like.
Fintan Walton:
So from the product of due diligence helps to modify at again your own assessment of the opportunity and that's fed back to the negotiating team?
Susan Graf:
That's correct.
Management of strategic evaluation group
Fintan Walton:
So what if in the process of this and it is a process of I presume running when you are running a strategic evaluation group it's an important process because you are running against time you are running against different targets for negotiation and so forth so how would you describe the management of your team how do you manage such a complex range of activities in different therapeutic areas how do you do that Susan?
Susan Graf:
It's a challenge sometimes when we have a lot of time sensitivity else what I try to do is I try to match the project with the person best suited to be able to deliver quickly on that project also look at workload across the team if I have someone who has a little bit more capacity currently than someone who doesn't I would likely give the project to them and when I mentioned earlier our therapeutic organization each evaluator does not just have one therapeutic area they have multiple therapeutic areas typically too so that they can be a fall back if you will if for example in their primary therapeutic area there aren't very many opportunities currently.
New challenges and changes in evaluations
Fintan Walton:
Sure, now and then finally in your role in running the strategic evaluation group at Roche Partnering are there changes in the way you do those evaluations or have there been changes in the nature of the alliances that are happening that changes the way or there same fundamental basic assessment done in a ongoing way I mean are there any new challenges for example?
Susan Graf:
I think one of the things that we have started doing and that perhaps differentiates us is that for every partnering opportunity we look at the potential for it to be a personalized medicine and that includes in our business assessment. So when we build our target product profile we look at whether a biomarker has been validated and whether or not that would be actually used to define the patient population that's likely to have the most therapeutic benefit so that is something that we do now routinely for all opportunities and it is a unique dynamic situation but we believe that developing personalized medicines when we can find those opportunities that regard this a future reimbursement environment it will allow us to offer a clinically differentiated medicine to a patient and that patient will clearly benefit from having a greater therapeutic outcome.
Influence of US healthcare reform on evaluations
Fintan Walton:
Right, and I suppose one of the things I was just thinking about there as well was the the healthcare reform for example in US how much that has influenced and changed the way in which you have to do evaluations? Does it?
Susan Graf:
It does, and in my answer about personalized medicine in that approach is part of that we are always considering payers stake holders for example as we are looking at these opportunities and it's hard to tell how that will unfold and evolve I wish I knew the answer to that however we believe that if we can offer significant therapeutic advantages to address unmet medical needs almost regardless of how the payer environment shakes out we will be well positioned to deliver on our promise to patients of personalized medicine.
Fintan Walton:
Susan Graf, thank you very much indeed for coming on the show.
Susan Graf:
Fintan, you are very welcome.
Fintan Walton:
Thank you.
Fintan Walton
Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Susan Graf
Global Head
Susan Graf is currently Global Head, Strategic Evaluation at Roche Partnering. She previously served as Director, Global Business Development at Hoffmann-La Roche and Director, Marketing at Roche Laboratories . She had her graduation from New York University, Leonard N. Stern School of Business and Purdue University.
PharmaVentures
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialisation.
Roche
Roche Headquartered in Basel, Switzerland, Roche is a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics. Roche is the world's largest biotech company with truly differentiated medicines in oncology, virology, inflammation, metabolism and CNS. Roche is also the world leader in in-vitro diagnostics, tissue-based cancerdiagnostics and a pioneer in diabetes management. Roche 's personalised healthcare strategy aims at providing medicines and diagnostic tools that enable tangible improvements in the health, quality of life and survival of patients. In 2008, Roche had over 80,000 employee worldwide and invested almost 9 billion Swiss francs in R&D. The Group posted sales of 45.6 billion Swiss francs. Genentech, United States, is a wholly owned member of the Roche Group . Roche has a majority stake in Chugai Pharmaceutical, Japan.