Inside the Pharma Scouting Engine: Lessons from LSX Boston's Pharma Partnering Workshop

Organized around four modules, the discussion offered a candid, practical view of how pharma scouts, evaluates, and partners with biotech companies. Here’s what stood out:

Module 1: Inside the Scouting Engine - What Makes Pharma Lean In

We opened by getting at the fundamental question every biotech CEO wants answered: when an opportunity first crosses your desk, what makes you lean in?

Both panelists emphasized that the initial filter is ruthlessly fast. Pharma BD teams are evaluating scientific merit, strategic fit, and development potential simultaneously - and an opportunity that is strong on one dimension but silent on the others rarely advances. Kasper brought the perspective of someone who evaluates opportunities across an entire enterprise, comparing them across different modalities, stages, and strategic priorities. Mike offered the lens of a therapeutic-area specialist, where the strength of the underlying biology and its potential to become a differentiated medicine are the gateway questions.

The best opportunities come from many sources - targeted outreach, scientific networks, venture relationships, conferences, and inbound approaches. Sustained relationships matter, but inbound opportunities can break through when the science and strategic fit are compelling. Platform stories, however, must demonstrate genuine repeatability rather than merely assemble a collection of promising assets.

Module 2: What Makes a Biotech "Partnership-Ready"

This module moved beyond the science to focus on what pharma actually needs to see before it gets serious. The message was clear: having strong data is necessary but not sufficient.

Three gaps commonly separate a biotech's presentation from what a pharma evaluation team needs:

• Disclose scientific, clinical, and regulatory risks candidly alongside the opportunity.
• Build partnering materials tailored to the asset, the pharma company's pipeline and priorities, and the transaction under consideration - rather than repurposing an investor deck.
• Prepare the IP, regulatory strategy, technical package, and diligence materials before serious engagement begins, not once a term sheet is in sight.

Founders also routinely underestimate diligence readiness. The panelists urged biotech leaders to stress-test their own preparations with the same rigor a pharma team will apply. Management credibility matters as well: pharma needs confidence that a small company can support the governance and operational demands of a major collaboration.

Module 3: Deal Structure, Risk, and Value - A Lawyer's Perspective

While we didn't dive as deeply into deal structure during the panel itself, this is the module closest to my own practice - and the one where I'd add some perspective from the legal side of the table.

One of the most consequential decisions in any pharma-biotech partnership is the choice of deal structure: license, option, co-development, investment-plus-option, or outright acquisition. That choice is driven not just by valuation, but by how risk is allocated - and there's an important distinction between risks best handled through economics (milestone structures, royalties, upfront payments) and those that require control rights, governance mechanisms, or contractual protections.

In my experience, a meaningful disconnect often remains between biotech expectations and pharma's view of value, particularly around upfront payments versus milestone-heavy structures when the principal uncertainties are technical, clinical, or regulatory. Terms sometimes treated as boilerplate - rights to improvements, follow-on products, data, combinations, and future indications - can materially affect the transaction's real value.

Negotiating these terms is not legal housekeeping; it is value allocation by another name. The partnering spectrum is broad - from licensing and research collaborations to co-development, manufacturing, commercialization, clinical trial, and outsourcing arrangements - and each transaction requires legal architecture tailored to its commercial objectives and risk profile. In my practice, the most successful deals are those in which counsel is engaged early enough to help shape the structure, anticipate diligence and governance issues, and ensure that the agreement preserves the value the parties believe they have negotiated.

Module 4: Practical Advice - Getting on Pharma's Radar and Maintaining Momentum

The final module turned to actionable guidance for biotech executives. What behaviors create confidence once discussions begin - and what quietly undermines it? How do you maintain competitive tension without creating an artificial or counterproductive process?

Momentum between a positive first meeting and a term sheet is fragile, and it fades more often than it should. Biotechs need to understand the role of the internal champion at the pharma company and help that person build the internal case. That means responding promptly, providing materials that support internal decision-making, and recognizing that the person across the table has stakeholders of their own to convince.

If I had to distill the entire session into one takeaway, it would be this: partnership readiness is a discipline, not a moment. The companies best positioned to succeed prepare the science, the story, the diligence package, and the internal decision-making path long before a term sheet is in sight.

Matt Karlyn is a Partner at A&O Shearman, where he is part of the firm's global Licensing & Collaborations practice. Matt and his colleagues advise pharmaceutical, biotech, and medical device companies on transactions across the full partnering spectrum - including licensing, research and development collaborations, co-development, supply and manufacturing, distribution and commercialization, clinical trial agreements, and outsourcing arrangements with CMOs, CDMOs, and CROs. He moderated the Pharma Partnering Workshop at LSX Boston on September 22, 2026.