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Letter from the Editor

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Managing the Partnership
As pharmaceutical companies struggle to maintain lofty growth rates while plugging holes in their piplines, alliance-based R&D and commercialization strategies offer the best hope, according to analysts at Cutting Edge Information.
Analysts say recent fixes only go so far: returns on pharmaceutical mergers and acquisitions, for example, have proven short-lived. Further, many analysts condemn firms’ R&D productivity and point out that current drug pipelines show little promise of replacing current blockbusters.
Partnering capabilities — the ability to advance products from both internal and external developers — are rapidly rising in strategic importance. According to Cutting Edge’s research, in some top organizations more than 25% of revenue comes from products brought in from elsewhere, and this trend is increasing. For example, one company aims to fill 50% of its pipeline with in-licensed and codeveloped drugs. Estimates from McKinsey & Co. point out that of the top 25 drugs today, 12 were discovered or developed by a company other than the one that launched them.
According to a recent company survey of senior business-development managers in the pharmaceutical industry, 85% expect the number of alliances to increase during the next five years…

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