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Establishing the Supply Chain A Small Company Perspective

Establishing the Supply Chain A Small Company Perspective. A Case Study Nov 30, 2005. Topics. Encysive Background Small Company Challenges Supplier Selection Technical Transfer Contracts and Quality Agreements Relationship Management. Encysive Setting. Small company (200 people)

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Establishing the Supply Chain A Small Company Perspective

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  1. Establishing the Supply ChainA Small Company Perspective A Case Study Nov 30, 2005

  2. Topics • Encysive Background • Small Company Challenges • Supplier Selection • Technical Transfer • Contracts and Quality Agreements • Relationship Management

  3. Encysive Setting • Small company (200 people) • In-house compound • Orphan drug, small volume, small molecule • NCE NDA filed – March, 2006 PDUFA date • Commercialization planned and underway • Suppliers selected and under contract

  4. Perspective • Company survival goes with product success • Risk-taking is minimized, if possible • Agency requests • Information for filings • Small fish concept • Effort needed to stay visible to suppliers

  5. The Team • Process Experts • API • Formulation • Analytical Expert • Quality Assurance • Project Management • Regulatory

  6. Challenges for Small CompaniesPriorities • Money • Company success and survival! • Time to market • Clinical results • Big tasks can paralyze multi-tasking

  7. Challenges for Small CompaniesFinancial • Feast or famine • Manufacturing costs probably not major piece • Cash flow will direct timing of decisions

  8. Challenges for Small CompaniesTechnical Expertise • Experts may be limited in breadth of experience • Heavier use of consultants and reliance on them • No backup for key people

  9. Challenges for Small CompaniesDecision Making • Fewer decision makers – quicker turnaround BUT • Analyses of decision may be shallow • Relationships vital • First proposals may be only chance • First impressions critical • May be short-term focused

  10. Supplier Selection • Dependent on stage and size of drug • More control necessary in earlier phases • Find suppliers who specialize in that stage • Few people – time to travel and time out of office are important factors

  11. Supplier Selection • Local representation for offshore supplier • Very dependent on background of sponsor’s technical expert • Past relationships • Out-reach by suppliers • Language can be an issue

  12. Tech Transfer • Pre-clinical to clinical to commercial • Development expertise to commercial expertise • Find suppliers with core competencies • Firms may be competitors • Awareness • Facilitate issues

  13. Tech Transfer • Takes longer than you think • More expensive than you think • Costs at both ends

  14. Tech Transfer • Formal technical transfer protocols • Who initiates • Who signs • Who has the expertise

  15. Contracts • What we should have done • Set key points before work begun • Finalize contracts while there were options • What we did • Continued on parallel paths • Over 12 months to negotiate • Leverage continued to diminish as time went on

  16. Contracts • In one case, due to relationship, we were able to get to a good contract • In another case, we ended up with a less-than-satisfactory contract because of lack of BATNA (Best Alternative To a Negotiated Agreement) • Make it a priority, or it won’t happen. • Supplier wins when negotiations drag.

  17. Quality Agreements • Very necessary • Tied into Contracts • Up-front audit makes for less surprises • Reputable suppliers are a key • Checklist or contract format • Big issues for us • Regulatory audits • Degree of control • Product release

  18. Relationship Management • Key point person – each way • Involved in every interaction • YOU may be continuity

  19. Relationship Management • Supplier #1 • Three project managers • Two sites • I am longest person in relationship

  20. Relationship Management • Supplier #2 • Same BD, even with change in responsibility • One PM • Once contract signed, strictly how to get it done

  21. Relationship Management • Project manager takes many roles • Keep emotions in check • Facilitator • Schedule • Scope • Enforcer • Contract negotiations • Schedule slippage

  22. Lessons Learned • Flexibility in expectations • Visibility to suppliers • Choose suppliers wisely • Get the contracts in place

  23. Lessons Learned • Know who the Project Managers will be • Use all the skills in your organization • Get the commercial support organization in place as soon as possible

  24. Summary • Know what you want and need • Reach for help - consultants • Select companies that “do this for a living” • Assure that both you and your supplier can prosper

  25. Questions Contact Information: Steve Pondell spondell@encysive.com (713) 578-6549

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