Collaborate to accumulate: exciting commercial collaborations in the medical devices sector

30.09.2016

A recent KPMG survey[1] of companies operating in the medical devices sector found that over 80% of respondents expected that it will be collaboration with partners, rather than in-house development, that will characterise the future of innovation in the field.
The nature of these collaborations is changing. The sector is seeing more and more tie-ups between smaller and larger players as well as a booming new trend for collaborations between tech giants and Pharma companies, driven by, and with a much greater focus on, technology rather than just science. Previously conservative Pharma behemoths appear to be moving towards a more open, collaborative approach, seizing the potential opportunities created by exciting developments in the technology sector in order to gain an advantage and deliver an improved patient experience.
From the perspective of the technology sector, it is undoubtedly Google which is leading the way in developing collaborative relationships with the Pharma sector. Its health division, Verily (formerly Google Life Sciences), has in the past few years entered into numerous collaborations covering a broad spectrum of healthcare technology.
One of the most recent high-profile partnerships was the tech giant’s tie-up with Alcon, Novartis’ eye care division, for the creation of so-called “smart contact lenses”. The agreement saw an initial license of Google’s smart lens technology to Alcon as well as an ongoing collaboration to develop the smart lenses for ocular medical uses, including monitoring glucose levels from tear fluid. It is envisaged that the lens will collect and transmit medical data, interfacing with an insulin pump to automatically deliver the precise amount of insulin needed by the patient in various circumstances.
Also in the diabetes field, Google have established separate alliances with both Sanofi and Dexcom in order to develop a hi-tech, low-cost, disposable smart device the size of a plaster to be worn on the skin. As above the device will monitor blood glucose readings in real-time, sending the data direct to a patient’s smartphone or a doctor’s computer.
Elsewhere, Google has entered into a joint venture collaboration with Johnson & Johnson to create “Verb Surgical Inc.” which will allow both parties to “pool resources and IP”. The aim of the venture is to collaborate to create new robotic assisted surgical platforms, fully integrated with imaging and data analytics.
The drive for the advancement of real-time patient monitoring and the use of new technology to collect and log such data has also spawned recent collaborations between Medtronic & Samsung and Pfizer & IBM.
In 2015, Medtronic and Samsung entered into a “broad strategic alliance agreement” in order to advance the development of digital health solutions, focusing specifically on an aim to enable patients implanted with neuromodulation therapies to use consumer electronics, such as smartphones, to wirelessly transmit real-time data to medical professionals. In the spring of 2016, Pfizer and IBM continued the trend in Pharma/Tech partnerships by entering into a broad collaboration project to develop an Internet of Things system to similarly enable remote real-time monitoring of clinical trial study subjects and patients. The long-term, multi-phase research collaboration agreement is said to be “combining Pfizer’s scientific, medical and regulatory expertise with IBM’s ability to integrate and interpret complex data in innovative ways”.
It is interesting to note from a legal perspective the variations in how the aforementioned collaborations are structured. There are multiple ways in which such companies can work together, and each may prescribe or dictate the proximity of the working relationship between the two entities as well as the share of resources input by each. Arrangements may range from a simple licensing of technology at arm’s length at one end of the scale to the establishment of a full joint-venture entity (as with J&J/Google above) at the other, with broad research and collaboration agreements sitting somewhere in between.
It is clear to see the potential for exciting technological and scientific developments that can be brought about through effective commercial collaborations, whether within the Pharma sector or by virtue of non-traditional but increasingly popular cross-sector partnerships. As discussed further in our in-depth white paper on this topic, there are numerous benefits these type of arrangements can offer both parties, however there will also be a multitude of challenges to negotiate. The white paper goes on to discuss the commercial considerations necessary in order to get the deal right, from choosing your partner and aligning your interests to putting in place robust provisions for funding arrangements, the ownership of IP and an eventual exit from the relationship. With the right strategy, due diligence and planning and most importantly with the right contract in place, such collaborations can be a success and it is easy to see why they are being tipped to be the main driver behind future innovation within the medical devices sector.

1 “Collaboration – the future of innovation for the medical device industry” – KPMG www.kpmg.com/lifesciences

Claire Phipps-Jones

Author