SOURCE: Cutting Edge Information

June 12, 2008 09:26 ET

Operational Budgets a Necessity for Business Development, According to New Study by Cutting Edge Information

RESEARCH TRIANGLE PARK, NC--(Marketwire - June 12, 2008) - According to the recently published report, "Business Development: Accelerating the Deal," developed by pharmaceutical market research leader Cutting Edge Information, truly effective business development teams are armed with a dedicated operational budget.

Pharmaceutical and biotech companies of all sizes and resource levels tend to agree on this one principle. With pipelines at large companies drying out and small companies attempting to stay in business, executives recognize that business development activities are crucial to company success. Vital to business development performance is the flexibility that an operational budget allows the department.

Like any other major department, the business development group has expenses that it incurs during regular activities. Often, the task of getting every expense approved by management proves too cumbersome -- even small companies have too much bureaucracy for this method to work efficiently. Therefore, many companies find it advantageous to set standards for what costs truly need approval from higher ups.

One downfall that is common to many companies is setting an expenditure limit for all stages of the deal-making process, from identification through alliance management, including the deal cost itself. This type of budget severely hampers BD activities -- before any expense is paid, the team must determine whether that money would be needed in a future deal.

Successful companies instead give the BD team freedom in its day-to-day activities, leaving management to approve the cost of the deal itself and pay for the deal through an overall flexible licensing budget. This strategy enables BD to function smoothly and not to discard advantageous deals early in the year for fear that funding will not be available later.

The 174-page report explores every aspect of BD management. It aims to guide companies as they build first-rate BD functions and to facilitate efforts among drug companies to close critical deals. Developed from surveys and interviews with executives at leading pharmaceutical and biotechnology companies, the report shows BD teams how to recognize and overcome deal-making pitfalls, align internal and external objectives, improve relationship-building skills, and drive deals to completion.

For more information and to download a free summary of the report's findings, please visit www.PharmaDealMaking.com.

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