Pharma M&A Starts with a Phone Call (or Five)

Chiesi is an international specialty pharmaceutical company that creates, develops, and commercializes innovative medicines in respiratory and primary care, neonatology, and rare disease and special care. Chiesi’s research centers and laboratories in five countries collaborate on pre-clinical, clinical, and registration programs, with 515 of their 4,100 employees dedicated to R&D. In 2014, the company reported revenue approaching $1.5 billion.

Brett Fleshman is responsible for growing Chiesi by acquiring new products and companies. The job requires developing a deep understanding of a drug, a market, a disease, and a patient – and creating a framework for that drug’s value if it reached its potential. This work can only be based on expert opinion, which Fleshman and Chiesi gather through market research projects, medical society meetings, larger advisory boards, and – critically – on-on-one learning. Fleshman starts his research with direct conversations with doctors and scientists to build an immediate knowledge base before determining whether or not to pursue the costly and time-consuming intensive research process that follows. On-demand learning enables Fleshman to avoid investing in bad ideas, advance good ones quickly, and gives him the bandwidth to cast a broader net.


My name’s Brett Fleshman. I am Senior Director of Strategy and Corporate Development for Chiesi U.S.A.

Chiesi is a pharmaceutical company. We are making many of the medications that are needed for smaller – often more severe – conditions. My job is about assessing and valuing companies and products that we could bring into Chiesi to add to our growth.

The funny thing about valuing a drug is that you have to understand so many things that simply are not written anywhere. There’s no web page for it. There’s no report you can buy. I have to understand if this drug has reached its potential, if it can be used in a broader patient population, if there are limitations that we perhaps aren’t aware of, and most importantly, if there’s value that we can take from bringing the drug into our company.

So when I first got started doing this job, my approach to answering questions about the value of an opportunity was to fund a market research project or perhaps get on an airplane and fly to a society meeting.

Many times, I would go do that five, six, seven, eight times before I would feel comfortable with proceeding.

Now the GLG interviews are my first step. I can get those same insights from network members, you know, in the course of just a few days.

Having access to one-on-one learning gives me more bandwidth to address more questions.

I walk out of my first interviews much, much more knowledgeable than I would be if I read the 100-page quantitative market research report.

The things that I learn in those early stages now are critically important to then making the investment in further market research or pulling together larger advisory boards.

The conversation with a network member is interactive, and that’s probably what I value the most.

And I find that they’re incredibly engaged, so in market research or in focus groups – especially moderated focus groups – I tend to find that the respondents are punching the clock. They maybe agreed to do this a couple weeks ago and are regretting that now.

But when we talk on the phone, there’s a one-on-one conversation between the GLG network member and a member of industry in this case, and everyone is engaged, so we are working together to make sure that I understand this problem. And we’ve many times reached the end of a conversation, and I’ve found that they stop me and say, “Hold on, you’re missing something.” And they spend another ten minutes with me ensuring that I have not walked away with the wrong impression.

The truth about the pharma M&A environment right now is that there are a lot of companies working very hard to compete to take on the assets – the very assets that we are looking at. I have to value this asset in a way that I have complete confidence because we are being as aggressive as we can to try to take on these opportunities.

I do these interviews myself, and I would recommend that for anybody who is my line of work. Once you get one person removed, you start to lose your ability to predict. When I speak with a network member, not only do I get the insights I’m looking for, but I understand how they’re answering the questions and how they’re thinking. And as you move through a deal and you begin commercializing an opportunity, those types of insights are truly invaluable.

It’s important for everybody to realize that this exists, frankly. For a long time, it existed, and I’m not sure that our industry was even aware.

We’ve been using one-on-one learning to understand the opportunities we’re trying to reach through pharma M&A. But we haven’t used it yet to understand how we might better do our jobs…to actually use network members perhaps as coaches – individuals who’ve been through what I’ve been through in the past, who are very innovative themselves in their approaches. And we could use this as a method of ensuring that we are, you know, benchmarked to the very top of our game so to speak.

We want to bring on drugs that that are important to the marketplace, that have an opportunity for us to increase the value to customers and to patients and those decisions have to be based upon expert opinion.

It’s something I wish I had done at the very beginning of my career.