NEW YORK - Don't "blow in the face of a dog."
Such was the figurative advice from a panelist who took up the ever-popular subject of how biotechnology firms might best negotiate deals with big, and sometimes finicky, pharmaceutical companies.
As wet snow swirled in the air outside the Waldorf-Astoria Hotel here, another participant in the roundtable gave thanks for surviving genomics' "nuclear winter."
The colorful metaphors came during opening day of the Biotechnology Industry Organization's CEO & Investor Conference, an annual event that goes beyond the company presentations typical of many meetings to feature talks on current issues and on the drug development challenges specific to disease areas.
In a broad-view panel discussion titled "The Early Bird Gets the Worm: The Re-Emergence of Pharma's Interest in Early Stage Compounds," Jim Neal, CEO of Mountain View, Calif.-based Iconix Pharmaceuticals Inc., said his firm has plenty to be grateful for, pulling through the hard times of genomics in considerable style.
The firm disclosed two deals last month. One, with Bristol-Myers Squibb Co., of New York, was valued at up to $24 million. Terms of the other, with Abbott Laboratories, of Abbott Park, Ill., were undisclosed. (See BioWorld Today, Jan. 22, 2004.)
Neal said the pharma firms in some cases were surprised to be dealing with a genomics company at all. "The first comment [when we got] in the door was, Oh, you're still here,'" he said.
Iconix boasts the DrugMatrix chemogenomics system, which comprises information on the genomic effects of drug and chemical treatments, along with a library of Drug Signatures - more than 200 sets of genes that serve as genomic biomarkers for the prediction of the potential toxicological, mechanistic and side effect profiles of a drug candidate.
Most genomics outfits "really haven't come through" to the satisfying degree Iconix has, acknowledged Trevor Hallam, vice president of respiratory and inflammation research and development at London-based AstraZeneca plc. But major pharmaceutical companies have made mistakes, too, when trying to separate the wheat from the chaff, in genomics and elsewhere.
His firm avoids "really scary and super-expensive" compounds and technologies, while staying alert for solid chances, Hallam said.
"If we can just get some stuff at the end of Phase II, that would be really cool, because then we know what we're buying," he said. "There aren't that many opportunities out there at that level, and you pay for what you get," he added, predicting "a little bit of a re-think as those costs spiral upward."
Barbara Kosacz, partner and head of the life sciences practice of Cooley Godward LLP in Palo Alto, Calif., questioned panel members about the title of the session, asking whether "business as usual" might be more the order of the day, with pharma firms paying for what looks reasonable from what's made available to them, as they always have.
In any case, Hallam said the biotechs that succeed in the competition for partnerships - other factors being roughly equal - are those willing to listen to the pharma companies' needs, although CEOs might be practiced at delivering somewhat slick speeches to would-be investors.
"The talk that I want to hear is not one that's going to pitch to analysts, necessarily," Hallam said.
As he spoke to the crowd about "when we do a deal," Hallam literally patted the back of panelist Robert Conway, CEO of Array BioPharma Inc., of Boulder, Colo. Late last year, Array and AstraZeneca entered a collaboration that could be worth as much as $95 million to develop oncology drug candidates. (See BioWorld Today, Dec. 19, 2003.)
Conway, for his part, advised biotech firms to prepare well and not try to hide weaknesses.
"You're talking to really smart people on the other side of the table, and they're going to know what you have and what you don't have," he said. "Be very open and honest with them, because they're going to figure it out anyway."
Thomas Picone, whose title is "entrepreneur in residence" at Boston-based Oxford Bioscience Partners, drew the strongest crowd response when he urged officials at each firm to get to know those at the would-be partner company on a personal basis and play "a little bit of a sensitivity game" by paying attention to likes and dislikes.
"If you blow in the face of a dog, you're likely to get bit in the nose," he said. "On the other hand, if you take a dog out in the car, he usually sticks his head out [the window] to get the rush of the wind."
Other issues included royalty payments, and whether - as Neal suggested - some pharma companies have an "allergic reaction" to the subject. Hallam called royalty arrangements "a fact of life" - one more aspect of doing business.
"We'll work with it, and if it gets too expensive, we won't do it," he said.
The conference continues through today.