The pharmaceutical industry continues to face fundamental challenges because of issues with research and development (R&D) productivity and rising customer expectations. To lower R&D costs, move beyond me-too therapies, and create more transformative portfolios, pharmaceutical companies are actively capitalizing on external innovation through precompetitive collaboration with academia,

cultivation of biotech start-ups, and proactive licensing and acquisitions. Here, we review the varying innovation strategies used by pharmaceutical companies, compare and contrast these models, and identify the trends in external innovation. We also discuss factors that influence these external innovation models and propose a preliminary set of metrics that could be used as leading indicators of success.