Session 6, Alliance Case study
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Questions and Answers

What was the typical success rate for proving the efficacy of molecules in development?

  • Three in four
  • All of them
  • One in two (correct)
  • One in four

    • What is a key reason why pharmaceutical companies are increasingly using specialized firms?

  • For research and development
  • To handle regulatory approvals
  • For manufacturing and packaging (correct)
  • To reduce marketing costs

    • During the 1990s, marketing alliances in the pharmaceutical industry often took which form?

  • Reselling agreements
  • Exclusive branding
  • Personal branding
  • Co-branding or co-marketing (correct)

    • Which therapeutic category did Eli Lilly NOT have a strong position in by 2004?

    <p>Cardiovascular Health</p> Signup and view all the answers

    What was the initial investment amount that Colonel Eli Lilly started the company with?

    <p>$1,400</p> Signup and view all the answers

    How many employees did Eli Lilly and Company have by 2004?

    <p>46,000</p> Signup and view all the answers

    Which product is NOT mentioned as part of Eli Lilly's therapeutic categories?

    <p>Aspirin</p> Signup and view all the answers

    In what year was Eli Lilly and Company established?

    <p>1876</p> Signup and view all the answers

    What was the primary purpose of establishing the Office of Alliance Management (OAM) at Lilly?

    <p>To enhance Lilly's partnership capabilities and manage alliances.</p> Signup and view all the answers

    Who was appointed as the executive director of the Office of Alliance Management?

    <p>Nelson Sims</p> Signup and view all the answers

    What is the Lilly Alliance Management Process (LAMP) described as?

    <p>A road map to streamline and simplify alliance management.</p> Signup and view all the answers

    Which group focuses primarily on identifying potential partnership candidates?

    <p>Research Acquisitions group</p> Signup and view all the answers

    What external firm did Lilly hire for consulting during the OAM establishment?

    <p>Accenture</p> Signup and view all the answers

    How long did the review process take before establishing the OAM?

    <p>18 months</p> Signup and view all the answers

    Which aspect of the alliance process does the Corporate Business Development group focus on?

    <p>Negotiations and due diligence.</p> Signup and view all the answers

    What was a significant outcome of the partnership review conducted by Lilly?

    <p>Development of a structured process for managing alliances.</p> Signup and view all the answers

    What was the primary focus of Alpha Biotechnology Company when it was founded?

    <p>Cancer diagnostic technologies</p> Signup and view all the answers

    How much did Lilly invest in the Lilly-Alpha partnership initially?

    <p>$100 million</p> Signup and view all the answers

    What role did Scott Fishman take on in the Lilly-Alpha alliance?

    <p>Alliance manager</p> Signup and view all the answers

    Which type of alliance was formed between Lilly and Alpha Biotechnology?

    <p>Research alliance</p> Signup and view all the answers

    What was one of Scott Fishman's key contributions to the Lilly-Alpha alliance?

    <p>Establishing governance committees</p> Signup and view all the answers

    Alpha Biotechnology had a strong position in which area of technology?

    <p>Gene transcription technology</p> Signup and view all the answers

    In which year did Alpha Biotechnology go public?

    <p>1992</p> Signup and view all the answers

    What was the maximum potential amount in milestone payments that Alpha could receive from Lilly?

    <p>$75 million</p> Signup and view all the answers

    What is one of the main challenges faced by Lilly's senior management regarding international alliances?

    <p>Equipping teams with intercultural skills for global collaborations.</p> Signup and view all the answers

    Which two companies has Lilly recently entered into alliances with?

    <p>Sankyo and Boehringer Ingelheim.</p> Signup and view all the answers

    What issue is raised by the rise of dedicated clinical research organizations (CROs) in India and China?

    <p>Opportunities for enhanced offshoring of research services.</p> Signup and view all the answers

    What challenge does procurement face in relation to OAM at Lilly?

    <p>Avoiding overlap and duplication with OAM processes.</p> Signup and view all the answers

    How many alliances does Lilly Japan reportedly have in discovery and development?

    <ol start="30"> <li></li> </ol> Signup and view all the answers

    What area of expertise is increasingly required due to expanding international alliances for Lilly?

    <p>Intercultural communication skills.</p> Signup and view all the answers

    What expectation does Lilly have concerning research services as a result of increased outsourcing?

    <p>To enhance offshoring capabilities for pre-clinical trials.</p> Signup and view all the answers

    What is a possible outcome of the growing international presence of Lilly?

    <p>Increased number of local partnerships in foreign markets.</p> Signup and view all the answers

    Which pharmaceutical company was formed by the merger of Hoechst and Rhone?

    <p>Aventis</p> Signup and view all the answers

    What company did Pfizer acquire in 2002?

    <p>Pharmacia</p> Signup and view all the answers

    Which company did ICI spin off in 1993?

    <p>Zenecca</p> Signup and view all the answers

    In what year did Warner-Lambert get acquired by Pfizer?

    <p>2000</p> Signup and view all the answers

    Which of the following companies merged with GSK in 2000?

    <p>Wellcome</p> Signup and view all the answers

    What is the top-selling drug of Pfizer in 2004?

    <p>Lipitor</p> Signup and view all the answers

    Which company acquired Knoll in 2001?

    <p>Abbott</p> Signup and view all the answers

    Which drug is associated with Sanofi-Aventis in terms of high sales?

    <p>Plavix</p> Signup and view all the answers

    Which pharmaceutical company is based in Osaka, Japan?

    <p>Takeda</p> Signup and view all the answers

    What is the total R&D expense for Johnson & Johnson in 2004?

    <p>$5.203 billion</p> Signup and view all the answers

    What significant merger happened between Upjohn and Pharmacia?

    <p>It occurred in 1995.</p> Signup and view all the answers

    Which company operates in New Brunswick, NJ and ranks fourth in global sales in 2004?

    <p>Johnson &amp; Johnson</p> Signup and view all the answers

    What top-selling drug is associated with Merck in 2004?

    <p>Zocor</p> Signup and view all the answers

    Which of the following drugs belongs to GlaxoSmithKline?

    <p>Seretide/Advair</p> Signup and view all the answers

    What is the primary purpose of Phase I clinical trials?

    <p>To ascertain the safety of the drug in healthy volunteers</p> Signup and view all the answers

    During which phase of clinical trials do patients with the disease participate?

    <p>Phase II</p> Signup and view all the answers

    What is a characteristic of Phase III clinical trials?

    <p>They assess the drug's safety and efficacy in a larger population</p> Signup and view all the answers

    What financial investment is typically associated with Phase III clinical trials?

    <p>$30 million to $100 million</p> Signup and view all the answers

    What proportion of drugs are typically successful in Phase III clinical trials?

    <p>85 percent or more</p> Signup and view all the answers

    Study Notes

    Ivey Case Study Notes: Innovation Without Walls: Alliance Management at Eli Lilly and Company

    • Context: Eli Lilly and Company (Lilly) faced increasing pressures in the pharmaceutical industry, including rising development costs and a complex competitive landscape. The company's Office of Alliance Management (OAM) was instrumental in building its reputation for excellence in partnerships. However, the OAM needed a strategic review.

    • Industry Dynamics: The pharmaceutical industry saw rapid consolidation in the 1990s, with global sales reaching $550 billion by 2004, and North America accounting for 45% of global sales. High development costs (over US$800 million) and short patent protection periods put significant pricing pressures on pharmaceutical firms.

    • OAM at Lilly: Established in 1999, OAM was instrumental in Lilly's excellence in partnerships. The director of OAM, Gary Stach, was tasked with reviewing the OAM strategy, given the anticipated significant increase in the complexity of alliances at Lilly.

    • Alliance Management at Lilly: The OAM (Office of Alliance Management) plays a key role. It aims to help Lilly develop the necessary alignment and capabilities to achieve its alliance vision. The role of alliance managers within OAM was crucial for success, facilitating and supporting various stages from pre-deal assessment, relationship building, to ongoing alliance management. The OAM had three main responsibilities:

    • Alliance champion (senior executive) providing high-level support and oversight

    • Alliance leader working on the day-to-day operations of specific alliances

    • Alliance manager acting as a liaison between the two partners.

    • Alliance Strategy at Lilly: Alliance strategies were typically classified into early, clinical, and advanced clinical stages, based on the development stage of the drug. Lilly's focus was on innovation-driven growth, external partnerships, and development. Examples of partnerships include research alliances, commercial alliances, and manufacturing alliances.

    • Challenges in Alliances: 60% of alliances failed due to non-technical factors, such as issues in communication, differing objectives or expectations, and poor leadership. Thus, maintaining healthy relationships and mitigating such issues has been a key strategy to Lilly's success.

    • Relationship and Capability: The alliance manager (OAM) plays a vital role in the success of each alliance. Their focus is not only on the contractual aspects, but also on maintaining a healthy partnership relationship, cultural understanding, and collaborative processes. This was crucial to mitigate risks of failure due to conflicts among alliance partners.

    • OAM Processes: Lilly developed a proprietary framework (LAMP) integrating best practices. Various tools and processes that include 3-Dimensional Fit Analysis, Governance Framework, Strategic Futures Exercises, and Shared Strategic Intent were used to proactively assess and manage alliances.

    • OAM Staff: Having alliance managers with general management skills, prior operational experience, interpersonal and problem-solving abilities; was vital for successful management. Training and opportunities for growth were important for OAM staff retention and effectiveness.

    • Future Issues and Outlook: OAM addressed the need to enhance their scope, expand geographically including international alliances, and collaborate across functional areas such as manufacturing and research. OAM also needed to consider the effective integration of external partnerships into the core business processes of Lilly.

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