12:00 AM
 | 
Jul 16, 2007
 |  BioCentury  |  Strategy

Gambling on partnerships

Procter & Gamble Pharmaceuticals Inc.'s deal with Dong Wha Pharmaceutical Industrial Co. exemplifies how the consumer product giant uses its marketing expertise to build its pipeline.

Procter & Gamble Co.'s pharma unit shut down its internal research in July 2006, deciding to build its pipeline solely through partnering. The move was driven by both the changing landscape of the industry and the company's decision to capitalize on its ability to obtain knowledge of customers.

"Most innovation now comes out of VC-backed companies," said Tom Finn, president of global healthcare for PG (Cincinnati, Ohio). "There are now more than 5,000 incorporated entities doing research, mostly university spinoffs, and about 4,800 have no real development or marketing capabilities."

Furthermore, he said, the odds of successfully bringing a product through the clinic to market are less than 5%.

When PG looked at both the scale...

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