The life sciences industry spectrum consists of the big pharmaceutical companies ("big pharma") on one side and small to medium biotech companies (SMEs) on the other. Burdened by a multitude of challenges and the need to mitigate them encouraged the SMEs and big pharma to engage in open innovation activities, such as forming strategic alliances. The success of these alliances depends on the SME and big pharma understanding each other’s business strategies, i.e. the perspectives and drivers that motivate them to form alliances. However, SMEs often develop assets without a complete understanding of what drives big pharma’s interest and therefore, fail to meet their criteria for partner selection and alliance formation. Additionally, the literature highlights a recent trend that big pharma is prioritising their focus on inbound open innovation for assets at early-stages in the drug development pathway. This change in big pharma focus towards early-stage assets and specific criteria used for partner selection forms the basis of this study. A qualitative and explorative case study research design informed by a review of secondary resources, field notes/observations and conducting five semi-structured interviews on senior big pharma managers was done to delve deeper into the research topic of early-stage strategic alliance formation. At early stages of asset development and initial interactions with SMEs, big pharma considers four criteria and their associated sub-criteria; trust (benevolence and competence), complementarity (skill and resources based), commitment (goal alignment) and financial pay-off (IP position, geographic proximity, novelty, competitive differentiation, reimbursement), to determine strategic fit. The interactions/interplay between these criteria was considered throughout the decision-making processes of big pharma (from pre-selection to deeper/full evaluation) by multiple team members. This thesis outlines the factors that influence the initial stages of alliance formation and provides a framework that depicts the interplay between the key SME-related criteria that big pharma consider while forming early-stage strategic alliances. By considering this framework, SMEs can strategize their initial interactions with the big pharma to overcome the barriers to early-stage of alliance formation.