Janssen Pharmaceuticals LLC: Rob Wills talks about changes in alliance management practices over the past few years




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Video title: Janssen Pharmaceuticals LLC: Rob Wills talks about changes in alliance management practices over the past few years
Released on: August 17, 2011. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review,filmed at BIO 2011, Fintan Walton talks to Rob Wills, Vice President Alliance Management of Janssen Pharmaceuticals LLC.
Changes in biotech funding
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at BIO 2011 in Washington DC. On this show, I have Rob Wills, who is Vice President of Alliance Management at Janssen Pharmaceuticals, which is part of the family of Johnson & Johnson companies, welcome.
Rob Wills:
Thank you.
Fintan Walton:
Rob, first of all just tell us there has been an sort of harmonization of the name within the Johnson & Johnson companies we've known of centre core Ortho-McNeil and so forth tell us first of all what's happened?
Rob Wills:
So the trend here Fintan is to have like a consolidation of all the companies in the pharmaceutical group into one common identity, we think it's important for payers, for customers, for people that we interact with everyday, we still have a decentralized philosophy and that was the hallmark of our business model, but it was often very confusing with all the different company names so we decided to just you know put it all under a common identity to help you know better our interactions with those whoever need to outside the walls of J&J.
Fintan Walton:
Right, so there are name changes going on, but also as you and I both know there are changes in our industry not just at the pharmaceutical level but also at the biotech level changes in biotech funding and so forth, what is Janssen Pharmaceuticals doing to accommodate that change?
Rob Wills:
Well it's really an environmental change that we are seeing as you pointed to and what it's come down to today is you just can't develop a product for the sake of putting a product out there you really have to add value, because the goal is obviously getting treatment of patients that's the number one goal, but the goal for the company is to be able to do it in a way that you can get recognized from a revenue standpoint for all the efforts and class that go into these medicines and payers today will not pay it for something that does not add value. So what we've had to do, we've had a very aggressive licensing strategy that we've executed over the last few years, the way we are divided up organizationally in our business development group is we have a transaction group that does a typical licensing and license deals, we have our merger acquisitions group, we also have a divestiture group which takes things that in our pipeline or in from our internal efforts and use that as a way to either share risk or balance of funding on the outside so that we may be get another opportunity from something that we just from a priority standpoint couldn't handle internally. So now having said that the traditional is to go out and do the licensing which we've done, but innovation comes from all kinds of sources so we've been much more aggressive now and going and cutting partnerships with academia, foundations, institutions, non-profit organizations, because we find that there is a lot of smart ideas and people out there and they are not all contained just within the bio pharmaceutical industry or the traditional pharmaceutical industry and it's been a change for us and I think for most of the industry because you just need to sustain growth going forward, you need to continually look for products.
Fintan Walton:
Right, so that means that relationships that you have to have say for an example with the academic institutions, the not for profit institutions have to be changed I suppose improved upon methods by which you can easily get access to that great innovation that you talk about?
Rob Wills:
Yes and I think of big change for those organizations is that they've made the bigger change than I think our industry, they've recognized that if they would conduct the business the way they did in the past so they get contributions through their website and through mailings you know a $100 here, $250 there and then they accumulate money and they often very providing services back to those people who contributed, but what they recognized is why those some of those non-profits are there and these and some of the foundations is they really wanna bring new modalities, new treatments, new diagnostics and preventative medicine to the constituents that they represent and the best way to do that is to partner with people who know how to take technology and convert it into a commercial and eventually into a usable medicine by patients.
Changes in deal environment
Fintan Walton:
Sure, so going back to the actual environment itself, and the types of deals that your company does have those changed in anyway, have you noticed a change in the way deals are now negotiated, do biotech companies have different expectations or even may be deficits in their ability to do certain types of deals?
Rob Wills:
Yes there has been a change in what's happening in the deal space with this current environment. In the last 80's probably late 90's up to about 2008 if you were a big pharma and you were looking for an opportunity you know it's a middle or late stage asset you are in a competitive bidding situation with your competitors for that single entity that was often in a biotech company and a result at the end higher upfront payments, milestones, royalties plus these companies wanted a lot of saying what they did with you, so there is co-development, co-commercialization they got to be very complex deals. Now what has happened in the last three-years is the sourcing, financial sourcing for these biotech companies has dropped significantly down to pretty much two sources one is pharma, big pharma and the other are the venture capitalists but they are being squeezed by their limited partners so they don't have as enough money to put in so essentially is big pharma, so now depends on the shifters where we are more in a buyers market so we can become a little bit more, more specific about what we want to do, we can be a little bit more demanding in the deal structures and that's what changed. I also think what you see is more of a willingness for big pharma to want to share risk, so instead of taking all the risk we share, we'll share it through either co-funding, or some sort of situation where company does the work ahead of before you jump in on an option basis, so those are the things that are changing currently in that deal structure market.
Fintan Walton:
Right, and do you think that the industry has changed so much that may be in the future there may not be that many biotech companies and that there will not be a it's not really sustainable to go forward on that basis?
Rob Wills:
No, I think because of the huge unmet medical need that still exists and will exit as far as I can tell since the science still is not at the point where we are curing everything we are touching or preventing it or diagnosing it that there will always be a biotech industry that's going to exist. I think there might be some consolidation as we are seeing as the investment money especially at the early stage is which is primary been with venture capitalist it's just not there for investment and you know a big pharma our pharmaceutical companies really are in a position to fully support the pure innovation place because we need products to sustain our growth and as we sustain growth we have more money to reinvest, but you can't you have to put it into what you really believe will be commercially and medically valuable medicines.
Rob Wills's perspective: When does a deal become an acquisition?
Fintan Walton:
Yes, so you have to make sure you are following where all the innovations are happening and they don't just necessarily happen inside your own company of course. So just the other components of this of course is the exit for these biotech companies there is a greater expectation now the pharmaceutical companies should buy them most of the VC's would like to see pharma companies buy them, but from your point of view from the Janssen Pharmaceuticals point of view when does a deal become an acquisition?
Rob Wills:
So there is two ways that happens one is just right upfront it's a strategic play.
Fintan Walton:
Like Crucell for an example?
Rob Wills:
Like our Crucell that we did recently we were not in a vaccine business and it's too difficult to build from the bottom up so the best way to do it is you find someone that's reputable with long-term product goal and then hopefully you can acquire bringing into the family. So our main emphasis on mergers or acquisitions is purely strategic getting us into a field of we weren't in or adding on to something that we are in, but in a way that puts you instantaneously in a commercial viable setting. The other way it happens and it's your point about what's going on in some of the biotech world, we often will go into look at an asset and that's still the preferable way to go you are not taking all the infrastructure you are just getting the asset now all your risk associated with the asset but not the rest of the company, but what happens is you find that may be the company is not going to be sustainable and then someone else may wanna come in and buy the company so now your assets are being held by somebody else even though you've licensed them, so that might be a reasoning to acquire it or we see that once we are in and the product is looking like it's going to really be much more commercially viable than we thought you know there may be an upside to it, it may be worth at that point in acquiring it so you improve the financials.
Changes in alliance management practices over the past few years
Fintan Walton:
So let's just go back to your job title, because you are in Alliance Management just one question around that you've been doing alliance management for some time now do you think the practices within alliance management have changed over the last few years, are we better at doing that or we wiser at doing that and what fore visions that you've had from such a taking on the alliance management job?
Rob Wills:
Well it's here to stay, because the only way you are going to be able to function in this world is to collaborate with whether it's moves from biotech to some of these other institutions I was talking about you still going to, it's about collaborations you're gonna need alliance management, but the best educator has been the experience, you may know there has been you know theoretical article brilliance.
Fintan Walton:
Business schools.
Rob Wills:
but it's been the experience so things have changed, I think that we've recognized that there are certain elements that were being put into deals may be 10-years ago which we are not seeing today because they have no value and in fact they would sometimes be obstructive, the role becomes one now where it's you are building in that whole though process into them the joint team the multi functional teams that operate, we are building in into how we're even dealing with customers and a patient cases that is you know this alliance thing is really a way of operating in a business style that helps to ensure you are gonna get the successes and that you mitigate as soon as you can any problems and issues.
Fintan Walton:
Right, because a drug development game is a risk game you don't wanna add any more risk?
Rob Wills:
You don't want any more.
Fintan Walton:
The inherent risks that we all have in drugs. Rob Wills, thank you very much indeed for coming on the show.
Rob Wills:
Thank you, Fintan.
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).
Rob Wills
Vice President
Rob Wills Vice President, Alliance Management, Johnson & Johnson. He is responsible for managing strategic alliances for the Pharmaceutical Group worldwide. This includes the relationships for Velcade, ceftobiprole, rivaroxaban, telaprevir, tapentadol, Yondelis and others. As head of Alliance Management, he oversees a small group of professionals who play an active role in the negotiations of alliances (structure, governance, dispute resolution, communication), in leading the integration post-signing and in managing the overall alliances. Prior to moving into this role in late 2001, Dr Wills spent 22 years in pharmaceutical drug development including, 12 of which have been at Johnson & Johnson. In his previous role as Sr Vice President Global Development, he was responsible for the R&D pipeline and a member of the R&D Board of Directors. In addition he served on several of the commercial Operating Company Boards and key pharmaceutical group decision-making committees. Dr Wills began his career at Hoffmann-La Roche where he spent 10 years in several roles of scientific responsibility. Much of Dr Wills' accomplishments are related to his R&D career, which included the successful development of over 30 NDA's, PLA's, MAA's in multiple therapeutic areas. He has authored over 40 peer reviewed research articles, 5 book chapters, and 50 professional presentations or abstracts in the area of pharmacokinetics. Dr Wills holds a B.S. in Biochemistry and an M.S. in Pharmaceutics from the University of Wisconsin and a Ph.D. in Pharmaceutics from the University of Texas.
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.
Janssen Pharmaceuticals LLC
Janssen Pharmaceuticals LLC a pharmaceutical company of Johnson & Johnson, provides medicines for an array of health concerns in several therapeutic areas, including: attention deficit hyperactivity disorder (ADHD), general medicine (acid reflux disease, infectious diseases), mental health (bipolar I disorder, schizophrenia), neurologics (Alzheimer's disease, epilepsy, migraine prevention and treatment), pain management, and women's health . Headquartered in Titusville, New Jersey, Janssen is named after Dr. Paul Janssen, a leading Belgian researcher, pharmacologist, and general practitioner. Dr. Janssen led a group of researchers to discover a medicine that helped change the way mental health patients were treated. His company, Janssen Pharmaceutica, joined the Johnson & Johnson family of companies in 1961.