Recent biotech deals are setting new valuation records for companies at specific early stages: preclinical (AbbVie/Capstan, ~$2B), Phase 1 (J&J/Halda, $3B), and pre-Phase 3 (Novartis/Abitivi, $12B). This signals intense demand for de-risked innovation well before late-stage data is available.

Alt-Pep sees its core strength as early-stage science and development across a portfolio of amyloid diseases. The company's long-term plan is to focus on this R&D engine and partner with big pharma for late-stage development and commercialization, rather than building its own sales and marketing infrastructure.

Contrary to the focus on large upfront payments, a smarter partnership strategy is to negotiate for a larger share of downstream success through royalties and milestones. This can yield far greater long-term returns if the product succeeds.

Merck cited Cedara's extensive, pre-Phase 3 research on pricing and cost-effectiveness as a key factor in its $10B acquisition. This demonstrates that early-stage biotechs can significantly increase their M&A value by proactively building a robust commercial case alongside their clinical development.

For years, Actuate's CEO has shared progress with large pharma companies, not just for early deal-making, but to get critical feedback on their development plan. This helps them understand what data potential acquirers need to see to make a compelling offer later.

Astute biotech leaders leverage the tension between public financing and strategic pharma partnerships. When public markets are down, pursue pharma deals as a better source of capital. Conversely, use the threat of a public offering to negotiate more favorable terms in pharma deals, treating them as interchangeable capital sources.

To overcome the difficulty of running clinical trials in China, Zymeworks partnered with a local company, B1. This provided crucial access to a large patient population for indications like gastric cancer, significantly speeding up its global drug development program.

Neurix's deals with Sanofi and Gilead involve the partner funding early development through human proof-of-concept, minimizing Neurix's upfront financial risk. Crucially, the deal structure allows Neurix to "opt-in" for a 50/50 profit share in the U.S. later, retaining significant upside on successful programs.

When seeking partnerships, biotechs should structure their narrative around three core questions pharma asks: What is the modality? How does the mechanism work? And most importantly, why is this the best differentiated approach to solve a specific clinical challenge and fit into the competitive landscape?