Pfizer: Doug Giordano discusses Pfizer`s deal strategy and types of deal structures




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Video title: Pfizer: Doug Giordano discusses Pfizer`s deal strategy and types of deal structures
Released on: August 31, 2011. © PharmaTelevision Ltd
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In this episode of PharmaTelevision News Review, filmed at BIO 2011, Fintan Walton talks to Douglas Giordano, Senior Vice President Worldwide Licensing and Knowledge Management of Pfizer Worldwide Business Development
Douglas Giordano's role and responsibilities
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at BIO 2011 in Washington DC. On this show I have Douglas E. Giordano, who is Senior Vice President of Worldwide Business Development at Pfizer, welcome to the show.
Douglas E. Giordano:
Thank you, good to be here.
Fintan Walton:
Doug, could you just explain your specific role in Pfizer?
Douglas E. Giordano:
Sure, so I am responsible for Pfizer's biopharmaceutical business development, so I have a team that's responsible for research and evaluation as well as the transactions associated with our biopharmaceutical business that includes the licensing work they will do, the co-promo work they will do, the alliance work as well as the merger and acquisition work that Pfizer do in the biopharma space.
Fintan Walton:
Okay, so quite a big responsibility?
Douglas E. Giordano:
Yes.
Fintan Walton:
So obviously Pfizer is out there looking for deals not just to do deals obviously to look for good assets I suppose good intellectual property, good drug technology?
Douglas E. Giordano:
That is the goal, yes.
Fintan Walton:
What is it like at the moment for a company like Pfizer? What's the environment like taking into account that's pretty tough at biotech right now?
Douglas E. Giordano:
Yes well I think there is a lot of different factors that are impacting deal doing in the biopharma space, but from my perspective I am excited, I am excited about where things are in the industry, I am excited about the science and where that science is going there is clearly a lot of unmet medical need, there is a clearly a lot of innovation that sits orientated towards that the science is progressing and from our perspective it's about trying to understand the science, understand the opportunity and make the right choices, make the right bets both from an internal R&D perspective as well as from a deal doing perspective and we kind a look at that all as one it's one portfolio, it's an internal portfolio as well as the external portfolio and we are constantly looking to optimize that portfolio as we look at our own programs respectively as well as when we look externally.
Fintan Walton:
So as you said you're looking for the specific assets, looking for these particular opportunities, obviously one of the things that's happened with Pfizer is there has been announcements of reduction in the R&D particularly in R&D, how does that affect your role?
Douglas E. Giordano:
So, yes we've announced certain cost reductions but really what we've done is we've taken a step back you know coming after the wise integration we looked at the portfolios we've made certain changes in the R&D footprint as we evolved we looked again at where we were and we tried to look at the model and figure out what was working and what wasn't working and make some changes and those changes manifested themselves in a variety of different ways, a we looked at where we do R&D and so we decided that we want to move closer to the academics centre's so we are locating major R&D operations in Cambridge, Massachusetts as well as in Cambridge, UK we have operations in South San Francisco and the goal there is to put our R&D organization closer to academia, closer to where the science is happening so that we can leverage all that's happening there versus being isolated in big sites in places like Sandwich and places like Rodden. So from our perspective it's not about cost cutting it is really about trying to do things more efficiently, there is the mention of this in terms of portfolio and we try to understand what we are working on, what therapeutics area we want to focus on and we took a hard look at where we were in terms of our capabilities and where we were in terms of the research that we were doing and the development that we were doing and we decided to be more focused, so we narrowed down the therapeutic areas that we are gonna be focused on, we narrowed down the types of the science that we wanted to do the basic science that we wanted to do and from that we will flow changes in terms of the cost structure and the efficiency of the organization, we are very optimistic so we call it really an engine for sustainable innovation it's not a cost cutting exercise in and of itself, it really is about changing the way we discover and develop products throughout the ecosystem and that includes the way we work with partners and we are continuing to focus on how we were gonna introduce good partnerships into that portfolio.
Pfizer's deal strategy and types of deal structures
Fintan Walton:
Okay, so just lets look at the types of deals that you are doing right now, obviously you doing licensing deals, but there are different ways of doing deals, there is option based deals for an example, there is obviously collaborative R&D arrangements, there is licensing itself and even acquisitions, so from a Pfizer perspective which instruments do you use? Which deal types do you use and when do you use them?
Douglas E. Giordano:
So really business development is an execution of strategy, so we really take a step back in terms of what we are trying to do as a company and you know when Ian Reed, stepped in as the Chief Executive Officer of Pfizer he really clarified and framed the strategies of the company, so number one we need to get back to the innovative core of our business and really focus on innovation. Number two we need to make sure that we are allocating capital appropriately and managing the portfolio spent appropriately you know beyond that we need to make sure that we establish trust with the community at large and that includes both the public community, the government community as well as the biotech community that we are working with and then finally we talked about making sure that our colleagues are engaged and really being productive now all that in terms of how it manifests itself into a BD strategy really is look we got to figure out what are the right products, what are the areas that we wanted the science where we have gaps, where we gonna go after those gaps and how we were gonna work with partners in a creative way, we want to engage partners in a trusting way so it's not about that we wanna do deal structures or option deal structures, we wanted these deal structures that are M&A deal structures, our structures and our business development approach is really gonna be a dialogue with customers, with partners what do they need and what do we need and how we actually make that work, you know where we actually trying to leverage what they do but wanting to work through them to get those things done why do we wanna work in consortium so we just announced this week another part of our centre for therapeutic innovation where we are working with academia we giving them our library of compounds and allowing them to really work in terms of discovering where some active molecules might be and trying to bridge the gap into the laboratory, into the clinic. So it's an idea of what's the best way to approach the science there is certainly we've done with an option deals, I have done licensing deals we always trying to manage risk but it's not a one way dialogue, it has to be a two way dialogue we need to understand from our partners what are they trying to accomplish, what are their investors looking for, what are their science is looking for and work in a very collaborative way and that's one of the things that we try to stress with our people and again it's not just what Pfizer wants, it's not what big pharma wants it's actually what is the right thing to do to actually create the science, create the products and really follow what the patient needs and try to make a difference and try to build value through those types of relationships.
Fintan Walton:
Okay, so obviously for a lot of biotech companies, pharmaceutical companies the acquisitions of those companies are important now for exit. So I understand what's you've just said intends that whatever asset you look out the ultimate deal is just part of the assessment and ultimately negotiation, but are you more likely to do those sort of acquisitions, you said part of your role is M&A are you like to do more of those as you see it today?
Douglas E. Giordano:
I think it depends on the stage of the asset and the stage of the company, I think you know we are looking to do deals across the spectrum, we are looking to work collaboratively with early stage biotech companies that are starting to build and I think for some of those companies they are gonna have to determine when the right time to harvest in terms of what they are trying to build and what they are trying to accomplish, you know we'd like to actually see early stage companies continue to work and focus on that science and build those assets and we'll work collaboratively with them at that stage if that's the most appropriate way, you know as companies evolve they need to determine is there a value inflection point that they feel it's now is the time to harvest, if that's the case that's the dialogue that they want to enter into we are willing to approach it from that prospective and we did a deal last year with a company FoldRx [PharmaDeals ID = 37289] they had a later stage product for polyneuropathy Tafamidis that was a conversation that we basically follow the lead of the company they wanted to think about a change in control about an M&A process and so that's the form that deal took, there are other deals where those companies wanna continue to do that basic science, they wanna continue to develop that product and we are going to work with them again we need to be flexible in terms of our approach in terms of the way we will engage with the biotech community.
Importance of corporate venture funds in Innovations
Fintan Walton:
Corporate venture funds are now prominent in our industry you will come across them no doubt you yourself Pfizer have their own venture fund, how important are those corporate venture funds and are they do you see them as further catalyst for innovation?
Douglas E. Giordano:
Yes, I think there it's a critical piece of the business development puzzle for companies like Pfizer. Barbara Dalton who runs our venture group is a leading scientist, solid leader in the venture community, she is works collaboratively across the community, she is out there helping eyes and ears and also a dialogue and creating a personality and a presence for the company within that community, I mean basically this in the ecosystem we all share a piece of this and I think the more that we work collaboratively in terms of the actual science using the venture arm and using that type of a structure to help us to continue to fuel innovation it's essential there are gonna be again as we as I just discussed it's gonna be companies that aren't ready for deal, but they need capital and we need to figure out ways to work with the community to ensure that capital is infused in these companies so that basic science and basic research can be done and we can take compounds from preclinical into the clinic through the early stages of development it's essential for us we are not gonna be able to do all of the investing internally, I mean the whole thought here is as pharma looks to be more efficient in terms of the way they allocate capital, we need to leverage the venture community, we need to leverage academia in other institutions in order to help fuel basic science and one of the leverage that we are going to use is working with the venture community cooperatively sitting along side them with their own venture groups and that's worked very effectively, we've seen it gives us an early window into what's happening, it gives us an ability to influence where the science is going so that we can make sure that the targets that are being worked on and the science that is being done will link up with the pairs we are looking for, with the commercial opportunities might be in the future and I think that kind of symbiotic relationships throughout the ecosystem is absolutely essential.
Fintan Walton:
Okay. Doug, thank you very much indeed for coming on the show.
Douglas E. Giordano:
Thank you. Thanks for having me.
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).
Douglas E Giordano
Senior Vice President
Douglas E. Giordano is currently a Vice President in Pfizer's Worldwide Business Development Group responsible for leading the negotiations and execution of product licensing and M&A transactions. Over the past two years Doug has led teams responsible for all Pfizer acquisitions and product licensing transactions including Pfizer's acquisitions of Coley, CovX. Encysive and Serenex, and product collaborations announced with Adolor, Avant, and Medivation. Before joining Pfizer's Worldwide Business Development group in 2007, Doug was of member of Pfizer's US leadership team responsible for US strategy and business development. Doug has been a key contributor to a variety of Pfizer transactions and a variety of innovative US commercialization initiatives including the creation and launch of the Pfizer/Microsoft/IBM collaboration, Amicore and the launch of the Pfizer for Living ShareCard and Pfizer Helpful Answers programs. Before his US pharmaceuticals operating role, Doug worked in a mergers and acquisitions role within Pfizer's Medical Technology Group " playing a key role in Pfizer's acquisitions, technology licensing and divestiture activity within medtech. Doug holds a Bachelor's Degree in Biomedical Engineering from Duke University and an M.B.A. degree from Cornell University's Johnson School of Business.
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.
Pfizer
Pfizer Inc. (Pfizer), incorporated on June 2, 1942, is a research-based, global biopharmaceutical company. The Company operates in two segments: Biopharmaceutical and Diversified. Biopharmaceutical includes the Primary Care, Specialty Care, Established Products, Emerging Markets and Oncology customer-focused units, which includes products that prevent and treat cardiovascular and metabolic diseases , central nervous system disorders , arthritis and pain , respiratory diseases , urogenital conditions , cancer , eye disease and endocrine disorders , among others. Diversified includes Animal Health products; Consumer Healthcare products, such as pain management therapies, cough / cold / allergy remedies, dietary supplements, hemorrhoidal care and other personal care items; Nutrition products such as infant and toddler formula products, and Capsugel. On January 31, 2011, it acquired approximately 92.5% of King's common stock. In August 2011, the Company sold its Capsugel business to an affiliate of Kohlberg Kravis Roberts & Co. L.P.