In the global pharmaceutical industry, companies often work in utter secrecy to be the first to bring moneymaking, lifesaving drugs to market. But when the novel coronavirus emerged in China in early 2020, many leading drugmakers quickly recognized that they would not be able to swiftly develop and mass- produce effective Covid-19 vaccines and treatments on their own.
Before countries even went on lockdown, organizations across the globe began teaming up to collaborate on research, clinical trials, and manufacturing. Focused on beating the virus rather than their rivals, they also openly shared data and advice. Their collaborations offer clues about how new business partners can set themselves up for success, even under intense time pressure.
Coming together to cooperate, not collude
As governments across the globe imposed lockdowns and stay-at-home orders this past spring, drugmakers faced difficult questions: Which workers should be deemed “essential” and continue to work on-site? Which clinical trials should continue? Which should be paused?
Hal Barron, the chief scientific officer and research and development president of British firm GlaxoSmithKline, one of the world’s largest vaccine developers, reached out to his friend Mathai Mammen, the head of drug R&D at Johnson & Johnson, to compare notes. Mammen invited Barron to join a group of R&D heads sharing information about the virus and strategies for drug development, according to the Wall Street Journal.
During their video calls, the group members made several informal commitments, including a promise to swiftly share clinical trial data on Covid-19 vaccines. Some of the leaders reportedly were concerned that their cooperation could be perceived as anticompetitive collusion, a fear that U.S. regulators alleviated to a degree by releasing a statement that encouraged businesses to work together to address the pandemic. In a bid for public trust, Glaxo and eight other pharmaceutical firms (including Pfizer, BioNTech, and Moderna) signed a public pledge not to seek regulatory approvals for their vaccines until after they had proven to be safe and effective in clinical trials.
Building a new team
In mid-March, Barron’s friend George Scangos, CEO of the small San Francisco firm Vir Biotechnology, approached him about partnering on a Covid-19 antibody drug. Within 18 days, Glaxo agreed to purchase a $250 million stake in Vir—a negotiation that normally would have taken up to a year. Barron recounted to the Journal how the deal got done: “‘OK, if that’s important to George—done.’ And [Scangos] would say, ‘OK, if that’s important to you, done.’ Let’s move this thing along. Can’t lose the big picture.” The companies expect their drug to be authorized in the first half of 2021.
Glaxo also knew that its adjuvant—a substance that can increase a vaccine’s potency by boosting the body’s immune response—was valuable to competitors. To identify who might want it, an internal team of “drug hunters” was tasked with identifying organizations working on an antigen, a key vaccine component. In PowerPoint, the team created a “digital quilt” of about 100 squares, each representing a potential partner working on a vaccine, according to the Journal. Glaxo reached out to some in the quilt and heard from others—a process that the company’s vaccine chief, Roger Connor, told the Journal was “quite, quite different” from usual practice.
Within 36 hours of Connor’s initial phone call with Thomas Triomphe, his counterpart at French pharmaceutical firm Sanofi, the two agreed to create a joint task force to share information and plan a partnership while a formal agreement was negotiated. Clinical trials have begun with the goal of generating an approved vaccine by summer 2021.
Speaking to the Journal, Triomphe described the cooperative spirit that pervaded negotiations with Glaxo: “When you’re facing a public-health crisis, there is no team with a blue T-shirt and a team with an orange T-shirt. Very quickly, there was only one team.”
Merck rebounds from a sluggish start
U.S. firm Merck—which pioneered mumps, chickenpox, rubella, shingles, and Ebola vaccines—might naturally have been one of the first firms to plunge into the Covid-19 vaccine race. But as the virus took hold in February 2020, top Merck executives disagreed about whether to invest in a vaccine effort. CEO Ken Frazier and R&D chief Roger Perlmutter reportedly believed it was a high-risk proposition that could detract from other firm initiatives, including cancer research, the Wall Street Journal reports.
Not until the outbreak had become a pandemic in March did Merck begin looking for a research partner for a Covid-19 vaccine. The company approached the University of Oxford about manufacturing and distributing a promising vaccine it was developing, but the university declined. Some Oxford scientists reportedly believed Merck would be unwilling to supply the drug to poor nations, and the U.K. government was concerned the Trump administration would hoard doses manufactured by a U.S. firm, according to the Journal. (Oxford ultimately reached a deal with British drugmaker AstraZeneca, which agreed to distribute the vaccine at cost globally for the duration of the pandemic.)
Merck eventually decided to develop its own vaccine, based on proven technologies, in partnership with nonprofit research organization IAVI (International Aids Vaccine Initiative). Merck’s play-it-safe approach could make its final product relatively easy to manufacture and distribute. IAVI CEO Mark Feinberg called the partnership an “insurance policy” in the event that earlier vaccines prove ineffective for certain groups of people. As Merck’s rebound suggests, a slow start doesn’t mean you don’t have an important role to play.
On a Friday in late January 2020, Uğur Şahin, the Turkish-born cofounder and CEO of German firm BioNTech, read an article in the medical journal the Lancet that convinced him the new coronavirus spreading in China would likely explode into a pandemic, the New York Times reports. The following Monday, Şahin informed BioNTech’s board that the firm needed to go full throttle on developing a Covid-19 vaccine. His goal: Start human trials by April, when he expected Western nations might have to go on lockdown, according to the Journal.
Other leaders at BioNTech balked: After all, the biotech start-up primarily developed cancer treatments and had not yet launched a product. But Şahin and his wife, BioNTech Chief Medical Officer Özlem Türeci, believed a new technology they’d worked on for decades, messenger RNA (mRNA), would allow them to swiftly deliver an effective vaccine to market—and that they had a duty to try.
Having convinced executives to put their ski holidays on hold, Şahin and Türeci launched Project Lightspeed. To minimize coronavirus transmission as they worked seven days a week, team members were separated into two groups. Soon BioNTech had identified four promising vaccine candidates using mRNA—but lacked the capability to test them or bring them to market.
Sidestepping a culture clash
On March 1, Şahin phoned Kathrin Jansen, a fellow German who heads U.S. pharmaceutical firm Pfizer’s vaccine R&D in New York. Two years prior, Şahin and Jansen had negotiated a joint venture to develop a more effective influenza vaccine using mRNA, which was going well. Jansen jumped at the chance to collaborate with BioNTech on a Covid-19 vaccine: “It’s probably the most important thing we’ll ever do,” she told the Journal.
After quickly agreeing to split the remaining development costs and profits down the middle, the companies dove into their project without a signed contract. “It was all based on trust,” Şahin told the Journal. Sixty members of their teams met via videoconference to negotiate some of the details.
The potential for culture clashes between 170-year-old U.S. behemoth Pfizer, which has about 100,000 employees, and German newcomer BioNTech, which employs about 1,800 people, was high. But, meeting daily via video, the teams resolved disagreements without regard for their corporate allegiance, the Journal reports. With so much on the line, “there is no place for egos,” said Şahin.
Even as they rushed to test their vaccine, the two companies hadn’t gotten around to finalizing their contract and continued to work from a draft term sheet. “Trust and personal relationship[s] [are] so important in [our] business, because everything is going so fast,” Şahin told the Times.
On November 9, Pfizer announced that the Covid-19 vaccine it had developed with BioNTech had proven more than 90% effective at preventing the disease among trial volunteers. Though, to date, the vaccine has been sold exclusively to wealthy nations, the news was met with excitement worldwide—and hope that other partnerships would achieve similar breakthroughs.
Guidelines for fast-paced talks
As organizations across industries struggle to stay afloat and even thrive during the pandemic, they find themselves pursuing innovative deals in a hurry. When there isn’t time for gradual rapport building, how can we build trust and lasting partnerships? Here are some guidelines from the drugmakers’ recent negotiations:
Map potential partners… Before settling on Sanofi, Glaxo engaged in a comprehensive search to identify companies that might value its adjuvant. Generally speaking, it’s wise to map the universe of potential partners before narrowing down the field, lest you overlook those that might offer the best fit.
…but weigh the benefits of established trust. That said, building on existing relationships isn’t a bad choice when there’s no time to build trust. Şahin of BioNTech immediately approached Pfizer about developing a coronavirus vaccine, and Barron of Glaxo and Scangos of Vir quickly made the most of their friendship. In both cases, strong trust between parties allowed them to launch projects before they negotiated a formal contract.
Focus on your shared mission. Pfizer and BioNTech were able to overcome potentially significant cultural differences by keeping their shared mission of reducing the spread of the coronavirus top of mind. Similarly, Glaxo’s and Vir’s negotiators rose above an us-versus-them mentality by viewing themselves as part of a single virus- fighting team. Highlighting a shared goal, such as advancing public health, can enhance cooperation between rivals.
A final note: There can be a fine line between offering a competitor a helping hand and unlawful collusion, so research the letter and spirit of antitrust law before collaborating with competitors.
Negotiating for those on the margins
Wealthy nations have locked up enough Covid-19 vaccine doses to protect their populations many times over. That has left COVAX, a global vaccine collaborative, with only enough doses to vaccinate 250 million of the billions of residents of developing nations, according to an analysis by Duke Global Health Innovation Center.
Drug companies in India are trying to meet that need. Serum Institute of India, a family-owned firm, produces more vaccine doses than any company in the world and supplies them to low- and middle-income countries. Four Western drug companies—AstraZeneca (in partnership with Oxford University), Novavax, Johnson & Johnson, and Sanofi—have tasked Serum with manufacturing more than 2 billion Covid-19 vaccine doses for poorer countries, the Washington Post reports.
According to Adar Poonawalla, Serum’s billionaire CEO, Western nations’ patent and intellectual property laws will perpetuate the Covid-19 pandemic in the developing world by keeping vaccine prices high. “Your survival shouldn’t be determined by where you live,” he told Politico.
The post Negotiating fruitful partnerships at warp speed appeared first on PON – Program on Negotiation at Harvard Law School.