Taking the Fast Lane Out of a Crisis

As most alliance managers know, partnerships hit snags great and small, especially over the long term in pharma collaborations that often last many years. Sometimes alliance managers can smooth out bumps in the road with a quick back hallway meeting with their alliance counterparts. Other times, a storm is so big it calls the viability of the collaboration into question. 

At the 2023 ASAP BioPharma Conference, Ameriga Fanigliulo, CA-AM, director of global alliance management at Sandoz, shared a case study that fell under the latter category, as well as a few lessons on how alliance managers can quickly steer organizations to better climates in a time of crisis in the session, “When Things Go South, It’s Time for a Change: Redesigning an Alliance to Prevent Value Loss.” 

Just as a partnership with a small biotech was on the road to great success, with a joint asset on the cusp of commercialization, a regulatory health authority’s inspection of a contract manufacturing organization (CMO) site turned up negative results, sending the collaboration careening off the highway and into a ditch. With this asset being off patent, time was ticking on the window for mining its value. In conjunction with senior management, Fanigliulo had to determine if there was a way to quickly give this collaboration a new set of tires and some body work to get it back on the freeway to profitability.  

Manufacturing a Third Way

Sandoz and its partner had three options: 1) terminate the initiative immediately and cut each partner’s significant losses, 2) wait and see how events unfolded, or 3) reinvent the alliance strategy, which would imply restructuring the deal entirely. The first two options were essentially a choice between costly and costlier. Fanigliulo convened a cross-functional team to reevaluate the alliance’s North Star, the company’s strategy and core competencies, and the current levels of trust between the organizations in order to determine whether the companies could indeed find a third way. 

The verdict: transfer manufacturing responsibility for the part of the process under scrutiny from the partner to Sandoz, which had a long track record in this area, whereas the partner’s experience lay in development and in a different type of manufacturing. The parties could simplify the supply chain, reduce overall cost of goods, and expand the scope of the go-to-market strategy in one fell swoop. While this course correction looked easy on paper, it would be anything but. 

“There was a cascade of consequences to be very well thought through [internally at cross-functional level] even before we laid out the new strategy to the partner,” said Fanigliulo. 

The Hard Sell Not to Sell

Once the operational details of how the changes could be implemented were put together, it was time to pitch the idea internally to senior management. Although the alliance team was confident in its recommendation, it knew that it was still going to be a hard sell.  

“The goal was to demonstrate to management that the return on investment resulting from staying in the game was going to be higher than just quitting. It was obviously not the easiest solution to implement. It wasn’t even easy to demonstrate [how we would go about this change],” said Fanigliulo. “It required us to collect data, predict scenarios, and to pitch the case, and to stand up to several board [members] to explain how the alliance could be reset to remain on the  track to generating value and why it was worth it to continue the alliance rather than putting it away. We could do so only based on the credibility built well before the crisis time through consistent and balanced communication when reporting on the alliance performance.” 

One Last Stop While Gearing Up

Sandoz now needed the partner’s imprimatur. Fanigliulo leveraged the equity and trust built up with the partner over time to align each company around the vision, thereby giving the proposed groundbreaking solution legitimacy.  The agreement was restructured significantly—“not a single term of the deal was untouched—milestones, commercial supply prices, territories, profit sharing,” said Fanigliulo—while risk mitigation measures were woven into the manufacturing and supply chain operation, which Fanigliulo noted “enabled a new regulatory and commercial strategy.”  

And just when the parties thought they had the vehicle back on the road, they were pulled over by the partner’s board of directors, who questioned whether their company was getting a fair deal. So the alliance managers went to work, reengaging at multiple organizational levels to assess each company’s constraints and financial expectations and using their confidentiality obligations to “push the limit” of what they would typically share in terms of expected value figures, according to Fanigliulo. 

“This increased level of transparency allowed us to seal the deal finally,” she said. 

Leading the Business Without Being the Business Leader

In looking back at the whole ordeal, Fanigliulo noted that this crisis required several elements of the alliance manager toolkit: understanding operational complexity, linking current affairs and proposed changes to company strategy, orchestrating consensus at yours and the partner’s organization, and negotiating new deal terms. 

“It required an alliance manager to step up and think as the business lead without being the business lead of the alliance,” she said. 

The Courage to Steer Strategy Through Change

Fanigliulo took away three broad lessons from the experience around change, strategy, and courage. Change, she said, “is not necessarily a bad thing. Sometimes it’s actually the only way to go to still retain the value and fulfill the original purpose of the alliance. Change is not necessarily something we need to be passive toward. We can actually anticipate and steer change.” 

She saw firsthand how important it was to adapt alliance strategy on the fly. 

“As the situation changes, it makes sense to adapt the strategy. Strategy must be a living organism, a living element. To enable that as an alliance manager, you need to be creative, forward-looking, and always transparent in your communication with the partner—always fair and transparent,” said Fanigliulo. 

Once you’re comfortable with your change in strategy, “it takes courage to step up and pitch the case to your management, to envision the outcome of what the change would be for your company, for the partner, and for the alliance in general,” said Fanigliulo. “It also takes a little bit of courage to drive the implementation of that change, leading the cross-functional team to take the steps that will enable that new strategy and new path forward.”

It’s a map to getting off the highway to hell and onto the road to success.