A multi-touchpoint approach to creative pharma dealmaking

*Sponsored by Astellas

An Expert View from Bradley Hardiman, Senior Director, Astellas Venture Management.

When times get tough, the tough get creative

Although the ups and downs of financial cycles are familiar territory, biopharma companies are continuing to grapple with the ‘dealmaking downturn of 2022’. Now, more than ever, collaboration is needed to address industry challenges and propel novel treatment modalities forward – because no matter how challenging the environment, one thing is certain: patients are waiting.

This evolving landscape does however present opportunities, as a more dynamic and creative dealmaking landscape emerges, with flexibility and customized structures being the hallmarks of change.

Building bespoke deals for success

While there is continued value in ‘traditional’ deals, ambitious dealmakers are adapting to the more complex and dynamic demands of the day. Increasingly, we see that having an open mind to the right partnering structure – whether a merger, acquisition, licensing agreement, research collaboration, or strategic investment – is just as critical as choosing the right partner.

Negotiating the right partnering structure allows for greater flexibility and directly impacts long-term value creation. While there is no set criteria or formula for success, important considerations include:

Company priorities must also be factored in. For example, at Astellas, we direct our internal resources and partnering efforts towards five Primary Focuses where we believe we have the expertise and capabilities to deliver significant impact and meaningful value for patients: immuno-oncology, gene therapy, mitochondria, blindness and regeneration, and targeted protein degradation.

A more iterative view on long-term partnership

Deal structures that evolve in line with the needs of the partnership provide the flexibility and space to build trusted, long-term relationships.

At Astellas, we have embraced this more bespoke approach. Our partnership with Mogrify, a biopharmaceutical company that aims to transform the lives of patients with degenerative diseases through a novel class of in vivo reprogramming therapies, shows how such a multi-touchpoint approach can help achieve shared goals.

Supporting growth and building trust: Initial equity investment

In 2021, we made an initial equity investment in Mogrify, driven by Astellas Venture Management (AVM), Astellas’ in-house venture company.

This enabled us to support the advancement of Mogrify’s innovation through its early stages while tracking its development. It also allowed both parties to better understand each other’s respective strengths and align on interests through ongoing communication.

Evolving the partnership: Research collaboration

As a partnership progresses, new challenges and opportunities will likely arise. It is essential that both parties are open and flexible if they are to address these effectively and maximize the probability of delivering for patients in need.

In our case, as Mogrify’s work on its proprietary direct cellular reprogramming platform progressed, we identified a clear opportunity to combine our strengths through a research collaboration – leveraging Mogrify’s reprogramming platform with Astellas’ expertise in adeno-associated virus (AAV) based genetic medicine and translational capabilities.

Committing to the partnership and your long-term strategy: Second equity investment

Rather than chasing the trends of the day, setting a long-term vision and working with your partners to get there is essential if we are to deliver meaningful innovation.

Through co-leading an additional close of $10 million in Mogrify’s series A round in October 2023, we highlighted our commitment to the partnership and pioneering novel therapies in areas of significant unmet need.

The result of this multi-touchpoint arrangement was that we were able to strike a deal earlier and more effectively to build a long-term partnership with Mogrify, rather than taking a single transaction approach at a later point in their journey.

Creative dealmaking is a blueprint for future growth

The industry’s ability to embrace change and explore new avenues of collaboration and partnership will determine its success.

It’s not just a question of resilience or creating a buffer against current economic headwinds but putting in place strategies to emerge stronger and to accelerate innovation. Multi-touchpoint arrangements are just one example of the new norm of creative deals providing the blueprint for partnerships that enable the delivery of life-changing treatments to patients around the world.