In the current crisis, working virtually is now a reality for many. The preparedness for this varies greatly. For some it’s business as usual, for others “going virtual” simply hasn’t been feasible, but for most, it involves fairly drastic manoeuvring. As clinical trials are put on hold and pharma R&D stalls, the ability to virtualize is becoming a critical adaptation for life science companies to shoulder the workload and continue to push forward. In turn, this is demonstrating more now than ever that access to the best expertise, regardless of its physical location, may be more important than ensuring all team members come together daily in the same physical space. We expect this to create a lasting impact on the way biotechs now work.
Virtualization is different from outsourcing. Traditionally, outsourcing represents a trade-off between cost, core competence and flexibility. Pharma has increasingly experimented with outsourcing substantial parts of its clinical operations, supply chain and sales operations to outside service providers, and its drug discovery and early stage development to biotechs (and academia). This quest for more innovative pipelines and greater operational efficiency in its core late-stage clinical development and commercial functions has been primarily driven by shareholder pressure to continue growing. In turn, this has led to massive growth and consolidation in the CRO, CMO, and CSO sectors and has enabled large pharma to restructure quite dramatically.
Biotechs, for their part, obliged by their investors to hit value inflection points as cost-effectively and quickly as possible, have in many cases leveraged a network of outside expertise that is integrated into a smaller core team. This is “virtualization” rather than “outsourcing”. During this unprecedented period where significant parts of the life sciences R&D and commercial process have had to be paused or modified greatly, the flexibility and lack of exposure to overhead in virtual companies could prove critical in managing through the current crisis. The pandemic lockdown reminded us of the value in flexibility of a virtual model, where it can be much easier to adapt contracts and spending without sacrificing necessary expertise.
However, in business development and fundraising, virtualization may take quite a bit more adjustment in working style, where the traditional face-to-face networking approach of deal-making is the life blood of these activities. Some seem to have taken the challenge in stride as evidenced by surprising but reassuring announcements of substantial deals finalized even in the midst of the pandemic. But those looking for new investment opportunities in what may be a longer period of distancing, may require alternative platforms for virtual interactions or choose to collaborate with experienced professionals to help identify suitable opportunities to keep the investment wheels turning.
So, who is the best service partner to support pharma and biotech in activities during our current virtual reality? Partners may be:
- full-service or highly specialized
- multi-facility, multi-national, single location or virtual
Traditionally, major players in both the CRO and consulting industries have tried to match the scale and geography of their clients. This has had the unintended consequence of also matching their somewhat extended cost structures as well as the internal tensions between the geographic and functional dimensions of the management matrix. These are large business machines with significant overhead that makes efficient adaptation to our new virtual-working environment a challenge.
In our current scenario, consulting boutiques and freelance specialists are much better positioned to adapt and continue effectively serving clients, essentially in a virtual world. Boutiques have the advantage here as there are often situations where the specialized nature of a freelancer is ill-matched to the breadth of the issues faced. For example, sometimes commercial and investment strategy questions masquerade as clinical trial issues to be addressed in the future, and their solutions require input from more than clinical researchers alone. In those cases, a multidisciplinary team of experienced consultants, appropriately engaged and directed, can add significant value. A union of these two service-provider styles is the model employed by Alacrita, which allows it to organize teams precisely yet maintain access to any additional specialized knowledge that a situation may come to require.
Clearly, complexity challenges cost-effectiveness, and we see a trend in favor of smaller, nimbler and more flexible service providers, which may already operate with a degree of virtualization. These organizations may prove to have the optimal configuration to support biotech and pharma companies through our new virtual reality, as they combine the benefits of deep domain expertise with low-overhead and flexibility. At times like these with such uncertainty, only paying for what you need assumes even greater importance as does structure that can be efficiently adjusted and adapted to change.
In addition, the widespread adoption of remote work, due to the pandemic, is likely to trigger a durable change in the industry. Organizations have been forced by necessity to create virtual structures and find new ways to integrate virtual decision-making – changes to how they operate that to some degree will be lasting. Most importantly, companies are learning that virtual teams can be just as effective, and in this context are beginning to prioritize expertise over physical presence. We are truly in a time of dramatic shift, and those who can effectively adapt to it and navigate it, will be much better-positioned for the long-term. Welcome to the “new” virtual reality.
As a boutique consulting firm with a multidisciplinary team we are well positioned to provide solutions to the multifaceted challenges often faced by biotech and pharma organizations. In addition to our core team, Alacrita has at its disposition a broad network of specialized consultants who can be engaged as necessary when additional, specialized expertise is required. With an established presence in Europe and the United States, our core capabilities and knowledge span both of these regions, as well as those that are adjacent.