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Partnerships are announced regularly but don’t always endure. This is because they aren’t right for every business. To forge an effective partnership, the reasons for entering it need to be solid, the timing needs to be right and both businesses need to be capable and dedicated to working with one another.
It is important to first consider what exactly a partnership is and why it may be beneficial. A partnership means different things to different people, but generally involves formal collaboration on a project, with shared responsibilities and shared rewards. Commitment from both sides is key.
Many early-stage businesses look to partnerships as tools for accelerating growth, while large businesses see them as a route to driving innovation. When done well, partnerships are a powerful tool because they can range from being small one-off collaborations through to more intricate long term formal agreements.
This flexibility means companies can start working together on a single project or feasibility activity and scale up the relationship as milestones are met, without committing huge up-front resources. For this reason, it’s very attractive for large pharma firms to partner with smaller businesses whose whole purpose is often to introduce innovation into well-established markets.
Medtech – pharma partnerships can be transformational when they bring their individual specialisms together. Typically, pharma companies focus on drug development and medtech companies concentrate on device and software development. Those worlds come together at the patient, whether care is being delivered in the physician’s office or the patient’s own home, and this is where the greatest potential exists to improve outcomes.
Is a Partnership Right?
While partnerships can bring many benefits, they aren’t right for every business. The first step is to decide why you want to forge one and whether it makes sense to start committing resources to one right now. A partnership should align with business objectives, deliver mutual and specific benefits to both parties that would otherwise be difficult to achieve, and – critically – be initiated at the right time to give it the best chance of success.
Many businesses start exploring partnerships as a way of accelerating progress towards their objectives. In the short to medium term, it might be that you are seeking to introduce innovation, evaluate new use cases for your technology to broaden its impact, or generate additional evidence of effectiveness and associated benefits for patients and providers.
Alternatively, in the longer term you might be looking to access large, well-controlled clinical trial capabilities or distribution networks. In both cases, partners can bring valuable assets and capabilities. Whatever the reason, those early conversations with potential partners always bring new insights into the business – either validating hypotheses about the market or providing new direction.
The company I lead, Kalium Health, is developing rapid, accurate tests to enable remote monitoring of cardiorenal patient health. As chronic disease management transitions from traditional in-centre treatment to more modern patient-led, data-centric approaches, there is huge white space in care pathways for technology providers like us. This makes partnerships particularly important because by collaborating with pharma on specific clinical indications we can open up new markets together and deliver benefits to everyone.
Is the Timing Right?
Having decided that a partnership is desirable and supports your objectives, it is important to make sure your business is ready and that discussions aren’t initiated prematurely.
We had several approaches from pharma soon after announcing our strategic vision in 2020. Internal teams had either been searching for test technology like ours to support their clinical trials or patient support programmes, or realised that our drive towards more personalised treatments aligned with their own. Flattering as those approaches were, we took the decision to double down on R&D and ensure that we advanced our technology as rapidly as possible to the stage where we could reliably deliver results – in our case accurate, real-time blood electrolyte measurements.
In general, businesses should wait until they have completed sufficient internal research and development to get to prototype readiness – making sure the product or technology is functional, reliable and sufficiently scalable will tick many of the boxes that make a potential partnership attractive to a third party and prevent negotiations stalling.
Technology readiness also needs to be matched by organisational maturity. If you are still embryonic in terms of company size and setup, working with a large multinational is probably impractical – their external partnership team alone could be larger than your whole company; with expectations to match when it comes to contracts, documentation, reporting and risk management.
For any medtech company, building capacity and capabilities in your organisational structure and implementing processes for effective, efficient collaboration will help ensure seamless collaboration with pharma R&D teams. For example, have a clear Target Product Profile for your technology and ensure that your technology can accommodate any changes requested by a partner.
Similarly, large pharmaceutical manufacturers should make sure they have buy-in from senior leadership and sufficient internal budget allocated to investigate new innovations. As part of this it is important to have a roadmap for what success looks like and what would follow. Early-stage companies move rapidly and work in a highly agile manner, so pharma should put in place workflows to support this.
How Can Partnerships Improve Healthcare?
Medtech start-ups are entrepreneurial and data-focused and, as such, they are well placed to provide research input and test speculative hypotheses with greater agility than traditional big pharma. This provides pharma with a cost-effective way to outsource blue-sky ideas and niche R&D projects. For a start-up, a partnership with pharma can enable them to test at scale, conduct trials much more easily and accelerate their R&D activity without having to invest in building a dedicated clinical team while their technology is still under development.
My focus is on chronic disease, which is hugely costly and affects millions across the world. The US spends $100bn a year managing kidney disease – $2bn every week to look after these patients! Solutions developed by the medtech sector, like remote health monitoring, enable more cost-effective approaches by optimising treatment for individual patients. We are seeing this shift happening already with value-based kidney care providers sending nurses to patients’ homes and exploring ways to use technology to better manage health. This is a clear example of an area where collaboration between medtech and pharma will undoubtedly unlock value.
Similarly, the pharma industry uses ACE inhibitors to treat hypertension and heart failure, but this introduces an inherent risk of hyperkalemia (high blood potassium) – which can be fatal without warning. Physicians aim to monitor potassium levels to achieve a complex balance of polypharmacy, but there is a lack of real time data to guide clinical decision-making. This is a great example of where rapid testing technology can provide benefits and approaches we have had from pharma companies prove they recognise the increasing importance of digital data in the pharmaceutical space.
A partnership might also centre around clinical trials, where remote testing saves the cost and inconvenience of in-centre bloodwork and opens up opportunities for better trials data. For example, results can be collected more frequently and in real-world conditions rather than a doctor’s office, and blood pressure readings are less affected by ‘white coat syndrome’. The ubiquity of Wi-Fi and cellular communications in developed countries means that data, gathered through minimally-invasive methods, is available immediately and can be uploaded automatically to clinical trial management software. This enables quicker, lower-cost data collection while improving the trial experience.
A specific challenge facing many pharma manufacturers is that at the point of use, optimal uptitration of drugs requires accurate data on how a patient is responding to a particular treatment. Where diagnostic and monitoring tools are lacking, this is done through a trial-and-error approach which incurs cost, delays optimal dosing and reduces the prescription options open to clinicians. This is why I see remote monitoring as one of the major areas in which the medtech community can partner with pharma to innovate and deliver better outcomes.
Prepare to Succeed
Forging partnerships between medtech and pharma can be challenging because partnerships are commonly only pharma to pharma, or medtech to medtech. The temptation amongst early-stage CEOs and corporate R&D managers is to stick within this traditional approach, but I believe some of the greatest opportunities lie in the crossing of boundaries when digital, device and drug are brought together. This is fertile ground for value creation.
It’s easy at first for both sides to see risk – of poor results, wasted effort or distraction from other priorities. This can be offset by both parties setting out to structure a deal to maximise upside and minimise downside – for example, by being flexible on timing to minimise impact on other projects and being ready to commit additional resources when things don’t go to plan.
I am encouraged to see pharma and medtech companies thinking less about ‘what could go wrong for our side?’ and more about ‘what could we achieve together?’. Forging successful partnerships requires goodwill, a level-headed approach to identifying mutual value and an ambitious culture that rewards the ‘what if’ projects. The potential benefits to patients, medtech and pharma are huge.