Washington Editor

VANCOUVER, British Columbia - On a bright, crisp Monday morning here, the idea of drug development partnerships with specialty pharmaceutical companies was touched on at the BioPartnering North America conference. The idea is nothing new, but the merits, and demerits, of that partnering practice were among a number of themes discussed by a panel of speakers during an early session at the two-day gathering.

William Newell, senior vice president and chief business officer at local QLT Inc., was a firm believer. He stressed that specialty pharma companies can prove to be invaluable collaborators, given their singular focus.

"I think the fact of the matter is that while a pharmaceutical company has a global reach, thousands of employees and thousands of [sales representatives] in a particular geographic space that they are playing in," Newell said, "the specialty pharmaceuticals offer you one thing in particular, and that is its specialty and its focus. They're going to be paying a lot of attention to niche market opportunities."

He also noted that capital markets have been paying a fair share of attention to specialty pharma opportunities, citing figures demonstrating that 23 percent of last year's biotech-associated venture capital investments went into specialty pharma. Newell also pointed to the increasing number of initial public offerings for specialty pharma companies in the last two years.

"[Investors] believe that there is less risk to the model on a going-forward basis to them," he said. "There's a commercial opportunity, but you don't have the development or the research risk."

On the flip side of the coin, Jeremy Levin, global head of strategic alliances for the Novartis Institutes for BioMedical Research, warned against over-enthusiasm when thinking of specialty pharma partnerships. In particular, he cautioned against companies that have been set up to resurrect abandoned compounds.

"These are re-treads that were spun out by a group of investors looking to ride the wave of specialty pharma," Levin said. But he conceded that specialty pharma's role, "in its purest form, is excellent."

The session also included discussions about the role of research and development in completing deal terms, as well as the current state of collaboration structures. William Stocks, vice president of business development at Seattle-based ICOS Corp., said the deal climate for biotech companies is better than ever.

"Never in history has biotech had as much leverage with pharma," he said, attributing that to the innovation gap among pharmaceutical companies. "A lot of biotechs are asking for co-promotion, co-marketing, co-collaboration, keeping territories out of a deal, and things like that."

And because partnership terms seem to be growing more favorably toward biotech companies, Stocks said management teams should have a clear idea of their wants and needs well in advance of beginning deal discussions.

"Be careful what you ask for," he cautioned.

The session's speakers also included Klaus Wilgenbus, head of licensing at Boehringer Ingelheim GmbH, of Ingelheim, Germany. It was moderated by the head of the merchant banking practice at Burrill & Co., James Watson. He also is the San Francisco bank's managing director.

His boss, Steven Burrill, delivered the conference's opening address and provided an optimistic outlook for the industry as it begins to move forward with a wealth of genetic and genomic data.

"I would argue that the next decade will be the period in which we take a lot of data and complexity and begin to add some meaningful coherence to all of that, as we begin to understand how to pull it together," he said.

In its third year, the conference has swelled to about 900 attendees representing more than 450 companies. About a third of the firms are based in Canada, while others come from the U.S., Europe and Asia. Among all the companies represented at the conference, their defining characteristics spanned the entire business continuum, from large, established pharmaceutical firms to small, start-up biotechs, and everything in between.

BioPartnering North America concludes today.