DUSSELDORF, Germany - The agenda for the second day of the 12th annual BIO-Europe International Partnering Conference featured an increase in one-on-one meetings and company presentations - it's a main reason non-Europeans flew so far to be here. Business is best done, they believe, face to face.

Participants were treated to an increase in sun, too, as it powered through a winter haze to reflect off the surface of the Rhine, which flows within a stone's throw of the Stadthalle entrance to the Congress Center.

Inside, the plenary panel discussion focused on pharma's increasing interest in large molecules. It's a field with proven winners - think Epogen, Rituxan or even newbie Lucentis - and many consider it to be the answer for pharma's thinning pipeline and/or revenue gaps. A report this year by Datamonitor suggested that by 2010, big pharma will see 60 percent of its revenue growth from large-molecule sales, an increase of $26 billion in sales vs. an increase of $13 billion for its traditional small molecules. And it's not coincidence that pharma's current buying spree features notable antibody firms: Abgenix Inc., Cambridge Antibody Technology Group plc, NeuTec Pharma plc and Abmaxis Inc. all have been snapped up this year.

So the question is not whether pharma is diving into biologics; it's what that means to biotech companies - the feeder fish in the biologics pond.

More Datamonitor figures show that in 2001, Johnson & Johnson, of New Brunswick, N.J.; F. Hoffmann-La Roche Ltd., of Basel, Switzerland; and Eli Lilly and Co., of Indianapolis, each received about 20 percent of their revenue from biologics.

Johnson & Johnson got to that point in part by having the foresight to buy Centocor Inc., of Malvern, Pa., for $4.9 billion, net of cash, in 1999, and establishing it as a wholly owned subsidiary. When Remicade was approved for rheumatoid arthritis in November of that year, J&J reaped the benefits, and has done so for every Remicade approval since. Last year, Remicade brought J&J $2.5 billion.

Roche has had success with biologics through its $2.1 billion, majority-stake purchase of Genentech Inc., of South San Francisco, way back in 1990. And Lilly partially has earned its biologics revenues through marketing deals on Reopro (Centocor) and Humulin (Genentech).

But Pfizer serves as a good example of a pharma company late to the game, now rushing into the space. Ten years ago, it only had two partnerships for large-molecules: XOMA Corp. and Corvas International Inc. The XOMA deal focused on E5 for sepsis, but work was discontinued in 1997 after interim Phase III data showed insufficient efficacy. Corvas and Pfizer were partnered on neutrophil inhibitory factor (NIF) to prevent brain damage in ischemic stroke, but that product failed in Phase II, causing Pfizer to return rights in 2002. (See BioWorld Today, Feb. 25, 1997; April 28, 1997; and June 18, 2002.)

But Pfizer "learned so much," in those deals that it then signed an agreement with Abgenix Inc. in 1997, said B.J. Bormann, vice president, global R&D, and head of strategic alliances at Pfizer, speaking at the plenary discussion. The Abgenix deal "transformed" the company and helped it "go down the road of biologics," she said. Today, the company has more than 40 biotherapeutic programs in development.

Sitting in front of Tuesday's plenary audience, pharmaceutical execs refuted the idea that pharma is chasing money through biologics, with Bormann saying that "it's not a revenue gap" filler companies want, but instead a way to attack diseases in which small-molecule approaches have failed.

Potential snares lie ahead for pharma and biologics, however - reimbursement is one, as well as biogeneric competition, although just how that will play out is not yet known. It's most unclear in the U.S., which lags behind Europe in detangling the biosimilar regulatory issue "by probably years," said Denise McGinn, vice president, business development, in the pharmaceutical group at J&J.

There also is the issue of pricing, particularly delicate for a pharma industry perceived by the public as overcharging customers and neglecting safety data.

"Scrutiny on affordability is going to continue," McGinn said, but added that it's "not such a bad thing." The drug industry simply has to "price reasonably" and then show "true innovation" with new products to justify those prices.

A member from the audience asked if buying up all the biotech firms - as some think pharma is intent on doing - merely depletes the creative landscape. While panelists did admit to constantly searching for the next platform, Bormann suggested that the acquisitions "will drive new companies to appear," rather than empty the field.

The conference ends today.