|
|
Innovative Partnership Helps Specialty Bio Hit Ground Running in U.S.
In late 2007, Scotland-based ProStrakan Group plc seemed to have everything going for it: four new European product introductions planned for an 18-month period and near-term product launches with an aggregate peak sales potential of $400 to $500 million, both backed by a 340-person pan-European salesforce.
There was only one catch. To signal its arrival on a truly global stage and meet its ambitious financial goals for Sancuso, the company’s treatment for chemotherapy-induced vomiting, ProStrakan would need an experienced and focused commercialization presence in the U.S. — precisely the capability the company lacked.
Out-licensing was an option, but this would require ProStrakan to sacrifice product control and accept lesser returns. Simply engaging a contract sales organization (CSO) would help to deliver revenue, but would hinder the company’s efforts to establish a respected commercial footprint in the U.S. Building a salesforce from scratch would be prohibitively expensive and, ultimately, impractical.
Solution: Creating a Powerful — and Instant — Presence
ProStrakan engaged NovaQuest, the managed partnership group of Quintiles Transnational, to build and manage its sales team for Sancuso. NovaQuest was picked based on its successful track record for launching key brands in the U.S., its ready access to capital through a relationship with TPG-Axon and its world-class commercialization expertise.
However, the partnership between ProStrakan and NovaQuest is neither a traditional “pharma deal” nor a “CSO deal.” Instead, it is a risk-based co-promotion agreement based on key managed partnership principles — oversight, involvement and accountability — that assume shared risk and drive toward shared reward. The following is how each partner benefits from the alliance:
- ProStrakan gets ready access to NovaQuest’s considerable commercialization expertise.
- ProStrakan secures access to an exclusive,75-person U.S. salesforce for Sancuso provided for three years at NovaQuest’s expense.
- At the end of the three-year post-launch period, ProStrakan retains the right to integrate the salesforce into its own permanent staff.
- To support Sancuso marketing and promotion during the three-year launch period, ProStrakan receives $10 million in upfront and milestone payments from NovaQuest.
- NovaQuest receives tapering royalty payments on Sancuso sales for seven years.
Getting the Right Kind of Attention
NovaQuest’s extensive experience in building and managing U.S. sales teams as part of risk-based co-promotions is generating interest throughout the industry. Analysts are already reacting favorably to the ProStrakan-NovaQuest alliance:
“We see this deal as a smart move that minimizes risk and does not impact guidance for [ProStrakan’s] breakeven during 2009.”
- Karl D. Bradshaw, Morgan Stanley
"We believed that a deal with a larger pharmaceutical company was a more likely deal structure; the company's more direct salesforce arrangement with [NovaQuest] should allow it to capture a greater share of profit."
- Shawn Manning, Landsbanki
"The deal with NovaQuest offers a sensible and low-risk option to execute this strategy with minimal upfront cost … [and] should also allow PSK to gain from NovaQuest's considerable experience of launching US pharmaceutical brands.”
- Richard Parkes, Piper Jaffray
Starting from a Position of Strength
ProStrakan’s established presence in Europe — with operations in the U.K., France, Germany, Spain, Italy, Benelux and Sweden — ideally positions it for European success with Sancuso. Gaining a foothold in the U.S. has long been a company ambition, and its managed partnership with NovaQuest provides the ideal opportunity to initiate a successful market introduction. As it launches Sancuso stateside, ProStrakan does so in the comfort and confidence of knowing that it’s keeping a greater reward for its innovation and avoiding the significant expense of establishing its own U.S. sales organization.
|