“We need either first-in class or best-in-class,” said Venky Raghavan, executive director for search and evaluation in oncology at Novartis. “But, even if you're first-in-class, if it's a super competitive landscape, we'd want to see what the differentiation would look like. And when we see a differentiation, it's got to be pretty important. We look at it in two different ways. One is like a scientific differentiation in terms of what is the unmet need you're trying to solve and how much better you're going to solve it […] And more importantly, it's also the patient population. Can we expand beyond where assets are currently being used?”

GSK’s Law noted that best-in-class is easy to say, but actually meeting that standard is complex and multifaceted.

“If we're going to pursue an asset, which is, I would say, a year plus from the most likely first entrant into the market, best-in-class potential becomes an increasingly important factor to scrutinise,” he said. “And when it comes to best-in-class potential […] you're looking at efficacy, you're looking at safety, you're looking at convenience, pricing, I think. In addition, bio-variability, based on the data sets that are supportive of that asset.”

Alongside that differentiated value, pharma companies are thinking about strategic and cultural fit – not just why someone should partner with, or acquire, this company, but why they should.

“We look at how things can complement our pipeline, or combine with our pipeline, and also what the company's strategy is,” said Anuradha Connor, head of search and evaluation for oncology at Ipsen. “The strategy changes from year to year, especially being at a more mid-sized company. We are very opportunistic as well. We also, just like other big pharma, have looming LOEs. We are very interested in late-stage opportunities, things that can bring in near-term revenue in the short term.”

When everything comes together, pharma and biotech can do a great deal even if some of the data isn’t as strong, as long as that differentiator exists. Nikhil Mutyal, head of search and evaluation for respiratory and immunology at AstraZeneca, shared an example:

"We did a deal with PharmaMar for a small cell lung cancer drug,” he said. “At the time, nobody was giving it a chance. It had failed multiple studies in combination. It was not working in the same indication. But monotherapy data was actually very strong. It was a handful of patients; but if you really talked to the doctors and physicians who are treating those patients, they were saying that they have not seen anything like it in terms of tolerability and effect size. We believed in it and took a risk. We only paid $100 million upfront for that drug, actually, and it's now in frontline maintenance in small cell lung cancer and it's probably going to do a couple of million dollars in sales.”

“It seems hard, especially if something's in a research or preclinical stage, to be thinking what your approvals will be, or what your lifecycle management will be,” Connor said. “It's a lot to ask, but it's very helpful to us when we have an idea of how the companies are thinking about the vision of the programme – where it could start, where it could grow – taking into consideration IRA and all of these other aspects.”

In some cases, poor planning can have serious consequences for a pharma-biotech relationship, according to Novo Nordisk SVP and head of global research, Jacob Petersen.

“Sometimes we see these early-stage collaborations that have gotten a Series A funding […] they rush to the next milestone, to the next value inflexion point, and then sometimes forget to do the right thing. Then when a big pharma like Novo Nordisk has come in, then sometimes we need to redo it. And that's a really difficult conversation to have with a young, flourishing biotech company that has a fantastic technology or target,” he said. “So maybe spend a little bit more time and get the right data because then it's going to be faster and it's going to be a lot more valuable.”

One area in particular where Petersen would like to see companies thinking ahead is around scalability and manufacturing.

“So scalability right now, except for small molecules and peptides, is a big issue for a company like Novo Nordisk, and something we address upfront,” he said. “I can only recommend, if you are in a biotech company, think about it. What is the scalability of the product that you are developing? Because that will play a big role in our decision-making in terms of moving forward.”

There are a lot of factors biotechs need to consider, but generally the more biotechs can think ahead, and avoid cutting corners, the better it will be for them in the long-run.

“The endpoint for biotech sometimes is different than the endpoint for pharma,” said Ladd at BeOne Medicines. “And I think over the last 10 years, we've seen different events drive pullback on some of these. And what I mean by that is a few years ago with China-only data, and then going to the FDA and trying to get approval on China-only data. That obviously backfired, and it was a fast-to-market approach.”

As well as manufacturing, scalability, and good science, companies need to think about the commercial side.

“Every deal at BMS has to be supported by a strong business case,” said Michelle Li, VP of business development transactions at Bristol-Myers Squibb. “That's where the P&L, the cash flow, those types of metrics come in play. For us, especially in this industry, revenue is perhaps the most important factor to decide what growth we are profiling for each of the opportunities. With that in mind, the speed to market, the order of action is really important, especially in highly competitive areas like oncology.”

Finally, as if that wasn’t enough to think about, far too many start-ups haven’t locked down their intellectual property sufficiently.

“I think companies have gotten better at that over time, but it really is the foundation in which your house is built, so make sure that you're taking care of that early,” said Siobhan Pomeroy, VP of corporate development at Gilead Sciences. “Because I would say in my career, in my experience, [IP is] the one thing that has killed deals more often than anything else.”

“If they can't tell that story, how are we supposed to understand or tell that story internally when we're trying to get the championship? That's a red flag when there's just a lot of data and they don't really know how to put it all together and tell a clearer story,” she said.

Differentiation is the whole ball game, so executives urged start-ups to do their homework on their competition and zero in on differentiation in their pitches.

“I'm absolutely focused right away. How is this different? What is the differentiation? That’s really what I want to know,” Joel Klappenbach, Pfizer’s executive director of business development of immunology and inflammation, said. “Don't make me go search and find out why it's differentiated because we'll do the homework anyway. So just upfront, tell me what's different about this particular asset, the mechanism, the target, how it's going to fit into the commercial paradigm.”

Irene Pasquali, head of global business development for Chiesi’s respiratory group, was even more specific about how start-ups should reach out.

“For me and for Chiesi, the best way is to send an email with the presentation, but pay attention about the email. It shouldn't be very long. The presentation will be very few slides, but what has to be clear is the data. So strong data, scientific data, that should be in some way validated. For example, sometimes we receive interesting data, but with a clinical model that in some way is not fully validated. With this, it's difficult to convince our R&D. But, if the model is strong and the data positive, that is something that will usually will get our attention.”

Start-ups can also get ahead by thinking a bit about strategic fit from the big pharma’s perspective.

“If you do know how your asset would fit with our portfolio, the combinations we can potentially do with your asset, I think that adds a lot more value,” said Novartis’ Raghavan. “It shows us that you've done your homework and shows that you're passionate about potentially partnering with us.”