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Bayer’s mission: Create value for its partners and itself

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When Bayer launched its Open Innovation Center, North America East in 2016, it had a clear innovative vision to guide its relationships with Boston’s biotech ecosystem. “We started with our focus to contribute through partnerships, and in just three years, we have built our reputation as a key mentor to budding entrepreneurs,” says Chandra Ramanathan, PhD, Bayer's VP and head of the Open Innovation Center, North America East.

For Bayer, these startup mentorships are a way to accelerate its own work. “They add value in two ways,” Dr. Ramanathan says. “It helps expedite the translation of ideas of startups to reach patients and internally, it inspires our employees and enables Bayer to gain access to potential breakthrough innovation.”

One of Bayer’s coveted mentoring programs is its relationship with MassBio through MassCONNECT®. “We initially served as a mentor for startups during an eight-week program, and then thought ‘why stop there?’” Dr. Ramanathan recalls. “Now we provide our resources, including office space and expertise for six months to young startups that we see as a win-win situation for both of us.”

Bayer showcased its first fellowship in 2018—and recently announced its second, with L Stem Therapeutics—to work with a MassCONNECT graduate company, a first of its kind collaboration. Recipients gain workspace in Bayer’s LifeHub Boston. “MassBio is a very important partner for us,” he continues. As a member of the MassBio board, Dr. Ramanathan has always strongly advocated forming partnerships with local biotech organizations. For Bayer, it was a strategic decision to be active in MassBio programs like MassCONNECT and mentorship programs that help grow the Massachusetts innovation ecosystem and make it sustainable for a very long time.

Similar to this program but with a lab space, Bayer provides incubator space for startups through their CoLaborators in San Francisco, Berlin, Moscow, and Kobe, Japan.

Find the right partner

Scientific innovation often depends upon startups, but it’s easy for young companies to become distracted. The most common misstep is changing directions to obtain funding. Diverting from the mission may generate funding, but may also weaken the science, he cautions. “My advice is don’t pursue opportunities that don’t fit the value proposition that your science has to uniquely impact patients. Companies lose credibility when they do that.”

He also recommends that companies thoroughly understand the strategic priorities of prospective partners. “Look at their track record, whether and how they cross the finish line, and their investor presentations. Then determine whether your projects fit their value propositions, and if so, approach them. If not, find a partner that is a better strategic fit.”

At Bayer, Dr. Ramanathan looks for partnering candidates that, first and foremost, develop great science. “The science should be innovative and translate to meaningful impacts for patients. It also should be aligned to Bayer’s strategies.”

Potential partners also need the expertise and the right team to move projects forward. That varies by developmental stage. “Licensing a Phase III asset is a different value proposition than an early-stage startup with a single investigator, so Bayer looks for different things in each.” For example, he says, “a Phase III asset needs strong clinical development and a commercialization pathway, while a preclinical startup needs the expertise to advance the science to the next stage.”

Gain even more insight from some of the industry’s best sources to help entrepreneurs solve some of the toughest—and often unexpected—challenges of creating a life sciences startup. Get the Startup Sourcebook: How to jump five unforeseen hurdles to biotech success.

The Broad Institute partnership of equals

Bayer’s partnership with the Broad Institute of MIT and Harvard is unlike its other collaborations, he says. Formed in 2013, “This is a partnership of equals. The Broad Institute is great at advancing genomics and biology, and Bayer is great in drug discovery and development.”

It’s the structure that really set this relationship apart. “This is a 50/50 partnership. Half of each research team is from Bayer and half from the Broad. The decision-making team is 50/50, too, which ensures equal consideration of the needs and perspectives of industry and academia.

“There’s one more important difference,” Dr. Ramanathan adds. Bayer’s alliance manager works on site at the Broad to understand and translate the needs of the team very closely. “That sounds simple but, to our knowledge it hadn’t been done before this partnership.” This deep understanding helps the partners balance the sometimes-competing needs of industry to protect intellectual property and of academia to publish.

The alliance also confers certain intangible benefits, especially in developing researchers’ cultural mindsets, Dr. Ramanathan says. To foster mutual understanding, Bayer employees are encouraged to visit and work on site at the Broad for three to six months, and the Broad’s scientists are invited to work at Bayer facilities as well. “This collaboration inspires our people to learn how an institute like the Broad works and fosters free-spirited inquiry.”

As cultural empathy grows, the collaborative relationship is moving from transactions to more robust partnerships. “Last year we announced the addition of the Precision Cardiology Lab.” Based at the Broad Institute, the lab is staffed by 10 scientists from each partner, for a total staff of 20. “It is unique in terms of working together and takes the partnership to a higher level of engagement.” Bayer previously did a joint lab with the German Cancer Research Institute.

Bayer partnerships are expanding

Bayer’s presence is growing not just at the Broad, but in the Boston area, Dr. Ramanathan says. “The pharma presence in Boston is expanding to 150 from 20 people, and will have a new location on the MIT campus. We want to do more from an innovation perspective.” The larger Center will add cancer research to its repertoire, and will look at innovation across the value chain, including digital health and clinical development functions.

Externally, Bayer is looking to translate its partnerships into pipeline products. “That’s very important. There’s a lot of good science in Boston, but if it’s not translated, it’s virtually useless,” he emphasizes.

Bayer also wants to extract more value from its partnerships that create value for the partner and for Bayer. Examples include co-creation with startups located in innovation centers around the world, extending breakthrough technologies or therapeutic platforms to multiple indications, and exploring innovative therapies’ curative potential.

Leaps by Bayer is another example of a partnership model with which Bayer has found early success. This accelerator program focuses on 10 of humanity’s greatest challenges, with the goal of making the impossible possible. Leaps’ healthcare aspect concentrates on DNA editing, microbiome, RNA inhibition, RNA activation, and cell stem therapy. With an initial investment of some $650 million, it funds joint ventures with such companies as Boston-based companies Casebia Therapeutics and Joyn Bio to Philadelphia-based Century Therapeutics. “We’ve been very active,” he says.

Bayer takes a well-rounded view of development

Engaging with the ecosystem is the foundation of Bayer’s advancement strategy. For example, he asks, “How do we add public/private partnerships in different places and work with their scientific organizations?” Discovery and innovation grants are one approach. By working with the American Association of Cancer Research, Bayer taps into cancer research innovation throughout the U.S.

At its heart, Bayer is about what Dr. Ramanathan calls the “Three Ps: patients, physicians, and payers.” His own career exemplifies that. Beginning in genomics during the exciting days of the first human genome sequencing, he became fascinated by drug development strategy. “I talked with people downstream about great science and the need to align it with downstream goals. That makes me think, ‘If I identify a novel mechanism, how will it be translated to patients 10 years from now? How will it fill an unmet need?’ How do I differentiate from the competition and what is my unique value proposition?”

Eventually, he moved into the commercial side of the industry as a global brand team leader. “Working there with medical colleagues and patient organizations is priceless,” he says. “It generates a different perspective. Now, I approach startups from the view of one who has worked throughout the value chain and launch. As a result, I can bring marketplace thinking earlier into the drug development process,” thereby strengthening the biotech ecosystem for all partners.

Meet and partner with members of Bayer and more leaders in the biotech space in Boston at BioPharm America, September 11–12. 

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