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Constandinos Vinall
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After a merger, what is the process of identifying the main parameters to homogenise in order for the portfolio to be aligned and integrated?
First of all, bringing two R&D portfolios together from two already big organisations is a major challenge. It already starts with the fact that pipeline information is for good reasons highly confidential competitive information. This typically means that before legal closing of a deal, information about projects may not be shared at all, or only in a very restricted manner, e.g. through a dedicated ‘clean team’. In consequence, as soon as information can be more broadly shared after closing, the time pressure is huge to come to conclusive decisions on the combined portfolio. What are the new strategic priorities which would determine how the portfolio should look like? Where are the redundancies? How can we compare our assets in a situation when processes for valuation are different? Who takes the portfolio decisions? These are typical and relevant questions that come to the table. And they are pressing because there is a high risk that money is wasted if projects that are eventually stopped or divested are continued for too long. Motivation is therefore lost in project teams, when ambiguity over the projects’ fate is not taken care of by clear decisions. From my point of view, the following steps have to be taken as soon as possible after closing: First, senior management from R&D and Business functions/Marketing have to align on strategic priorities, even if these can only be preliminary at this point in time, which will guide the R&D portfolio composition and priorities. Second, a new R&D portfolio governance model has to be put in place, with clear roles & responsibilities and defined decision processes. Third, Finance has to agree at least on interim processes and rules, how to create transparency on budgets and spend for the pipeline. I propose to follow the principle: Rather a wrong decision (early) than no (or late) decision! It must not be underestimated, what positive impact on the moral of the workforce it has, if senior management is able to take clear decisions early after the merger, and with that provide guidance and stability in times of general stress and uncertainty.

What are the challenges involved in analysing risk and calculating the budget?
Technically, it is difficult if not impossible to compare data that is generated from different, non-consolidated processes in Finance as well as Project and Portfolio Management. And the devil is here in the detail; the more you dig, the more different these processes tend to be, which you may only find out late and sometimes by chance. And do not think that if you call something the same, e.g. NPV or Probability of Success, that it is the same and therefore comparable across the heritage systems. The assumption behind some of the inputs, (sub-)processes, and algorithms will for sure differ here and there, making it very challenging to compare ‘apples to apples’ or even ‘apples to oranges’. Appreciating these challenges is already a good step in the right direction. My advice: Keep it simple! Rather than trying to align all the existing processes, tools, metrics, etc. upfront, agree on a minimum of well understood and aligned criteria, and take decisions according to a clearly communicated ’80:20 rule’. Qualitative criteria may be more appropriate in an early phase of the merger than quantitative, which will anyway not be trusted due to the non-aligned processes and systems. It is helpful in this context to define a joint basic glossary which does not only look at the words, but their concrete meaning.

How can companies evolve portfolio criteria in the continuity from early to late stage?
I come back to my advice above: Keep it simple in the beginning. Align guiding principles for R&D portfolio governance, select the minimum number of essential criteria, which are driven by the business objectives, and give decision rights to cross-functional teams representing R&D and Business functions. Stay with qualitative criteria for early projects; ambiguity is too large for typical pharma R&D projects when they still have 10 years or more to go.
A dedicated expert function for Portfolio Governance and Management should be there to provide the framework, deploy state-of-the-art methods and tools, and give advice for decision makers based on thorough analyses from one data source. This function will then also take care of further development of the overall portfolio management approach in keeping with the growing maturity of the organisation following a merger.

Why is it important to correctly communicate value and risks internally along the stages?
It happens very easily that projected launch dates and project values (typically measured with NPV figures) derived from R&D project plans are misunderstood as promises, especially by the commercial functions. And if projects fail or are delayed, this may lead to frustration and blame gaming. Therefore, a culture has to be fostered, in which opportunities and risks of projects and portfolios are well understood on all levels. It starts
in the project teams, where cross-functional co-ownership for project scope, plan, and risks is essential. And to be very specific, cross-functional includes commercial and manufacturing functions, not only R&D. The same co-ownership principle has to be applied also in portfolio governance boards and on senior executive level. Transparency is very important in this context. Portfolio information from one trusted source, distributed by a Portfolio Management Office function in a consistent and regular manner to all stakeholders is an important success factor for building this culture.

What would you like to achieve by attending the 17th Annual Strategic Project & Portfolio Management for Pharma conference?
First of all, this is a great opportunity to network and learn from the wealth of experience in the room. It is always highly energizing for me to see the commonalities and even more the difference, in which others approach very similar issues. Obviously, there is no ‘golden rule’ to solve a problem, but if I see various ways to tackle something, this is very inspiring for me. As a speaker, I hope to share some of my experience, which may be in turn helpful for others in comparable situations. The conference will be successful for me when I come home with a few more options on how to do things, some new contacts which I can reach out to if I have questions, as well as the feeling that I have contributed to foster the Project and Portfolio Management expert community.

Ahead of the 17th Annual Strategic Project & Portfolio Management for Pharma conference, we spoke with Dr Johannes Barsig, Head of International Project Management Pharmaceuticals at Boehringer-Ingelheim Animal Health about the post-merger main parameters for an aligned and integrated portfolio. Johannes also sheds light on the challenges involved in comparing data generated from different, non-consolidated processes in Finance as well as Project and Portfolio Management. What’s more, he depicts the importance of correctly communicating value and risks along the stages.

Practical Insights From:

Stefan Meyer
Head of Global Portfolio Management Oncology
Merck
Claude Chieze
Head R&D ad interim Direction Portefeuille et Projets Stratégiques
Pierre Fabre
Simon Lennard
Senior Director IMED Reporting and Governance
AstraZeneca
Frédéric Peyrard
Global Strategic Decision Lead – Decision Analysis & Portfolio Support
Ferring Pharmaceuticals
Tom Halliwell
Therapy Area Director
Norgine
Hans Christinger
Vice President, Business Development & Alliance Management
Ovid Therapeutics

About the conference:

This marcus evans conference will focus on understanding how right processes and tools, realistic analysis and correct interpretation of data can be translated into market success. Aligning with corporate strategy, prioritizing portfolio, balancing value and risk, as well as enforcing capacity management are key elements which tend to be structured within integrated systems but also require agility and human skills. With various case studies and discussions platform, this conference will give the opportunity for attendees to boost their practical knowledge and professional experience within project portfolio challenges.

The 17th Annual Strategic Project & Portfolio Management for Pharma conference will take place from the 29th to 31st of January 2018 in Barcelona, Spain.

About the speaker:

Johannes is working for Boehringer Ingelheim Vetmedica GmbH as Head of International Project Management Pharmaceuticals in Ingelheim, Germany. In this position he is responsible for a group of project leaders who drive with their cross-functional and cross-geographic teams the development and Life Cycle Management of Animal Health products. He has been heavily involved in the integration of R&D after the successful merger of BI Animal Health with Merial, as part of the business swap between Boehringer Ingelheim and Sanofi.

Before joining Boehringer Ingelheim in 2012, Johannes was project leader and at last Head of Project Management at Nycomed/Takeda, Konstanz, Germany. Trained in Biochemical Pharmacology, he started his pharmaceutical career as lab head working for Novartis in Vienna, Austria.

R&D Portfolio Integration after Major Acquisition

An interview with Johannes Barsig at Boehringer-Ingelheim Animal Health

Johannes Barsig
Head of International Project Management Pharmaceuticals
Boehringer-Ingelheim Animal Health

Key Topics

Gain practical methodology to implement efficiently portfolio management
Maximise portfolio value under limited budgets
Benefit from early stage decision making
Balance internal investments with external resources and partnerships
Discover the analytical tools which will enable effective project and portfolio valuations