Assistant Managing Editor

CHICAGO - Biotech's approach to business development has long had the familiar get-through-Phase-II-proof-of-concept-and-then-partner ring to it. And it's a strategy that certainly has served the industry well, with biotechs scoring impressive deal terms and gaining experienced partners to run (and often fund) large pivotal trials and commercialization efforts.

As the third day of the annual Biotechnology Industry Organization swung into action at McCormick Place, attendees continued hitting the meeting rooms. Amid the record number of one-on-one sit-downs at this year's meeting, no doubt many will feature biotech firms with drug candidates at that traditional Phase IIb partnering point.

But an increasing number of companies have found themselves flying solo, sometimes all the way through Phase III and into registration. According to Linda Pullan, vice president of business development at Pullan Consulting, who looked at biotech pipelines for firms with less than $100 million in product sales, there are about 715 compounds in late-stage development, defined as Phase III or pre-registration.

Roughly 250 of those - about one-third - are unpartnered, she said during an early Wednesday panel discussion on firms with late-stage trials and no partner, or LSTNOPs, to add another acronym to add to the growing list of business model jargon.

Some companies, obviously, are going alone by choice - generally midcap firms with hefty cash positions such as Vertex Pharmaceuticals Inc. and Isis Pharmaceuticals Inc. Some are going after small indications easily accessed by a modest in-house sales force, and others have planned their own commercialization efforts well ahead of approval, such as Seattle-based Dendreon Corp., set to launch its newly approved prostate cancer vaccine Provenge (sipuleucel-T) in the U.S. only days after the FDA's nod. (See BioWorld Today, April 30, 2010.)

But some firms simply haven't yet been able to find a suitable deal. For those, facing limited cash and the daunting tasks of tackling the pre-commercialization activities often beyond the bailiwick of scientists, a feeling of panic can set in, worry that they might have to settle for a less favorable terms or risk seeing their candidates shunted aside to a table for one.

Interestingly, Pullan noted that recently the differences between the values for Phase II-stage and Phase III-stage deals are "not as much as one might have thought." She attributed part of that to the perception that if a drug "gets to Phase III and it's unpartnered, it might be a dog."

Indeed, some programs have been forced to prove their mettle in the clinic - and sometimes even in the regulatory and marketing spaces - before a partner is willing to come on board. Valencia, Calif.-based MannKind Corp., for instance, has had a hard time convincing big pharma to take a gamble on inhaled insulin candidate Afrezza, despite assurances that the inhaler is much more convenient than the bulky device that contributed to Exubera's downfall. Pfizer yanked Exubera from the market in 2007 after poor sales. (See BioWorld Today, Oct. 19, 2007.)

MannKind, which received a complete response letter in March, has said, after a potential suitor last year was unable to continue negotiations, that it plans to wait until a label is finalized before reaching out to big pharma. (See BioWorld Today, March 16, 2010.)

What hurts many LSTNOP firms is a lack of planning - and, often, expertise - in nailing down those pre-commercialization details such as manufacturing, packaging and labeling. A bad decision could send a potential partner running the other way, so "there's kind of a reluctance to make a final decision," said Bernd Mühlenweg, director of business development for Munich, Germany-based Wilex AG.

Wilex is in Phase III testing with Rencarex, an antibody in development for renal-cell cancer. Mühlenweg said interim data are expected shortly and, if positive, could be sufficient for European filing. Right now, the company is dealing with packaging issues, "which sounds trivial," Mühlenweg said, but refers to dosing and pricing issues that would be crucial to prospective partners.

Marketing studies also are critical, panelists said. Firms should be familiar with the competitive landscape, aware of generic threats coming down the road and know where their products would fit in strategically with potential collaborators.

And start early, advised Ann Miller, vice president of primary care and specialty business at Eisai Inc. "In a perfect world," firms planning to commercialize one of their own pipeline products would "start working on this at least three years in advance."