BioWorld International Correspondent
TORONTO - The information overload facing biotechnology is prompting a new phase in corporate deal making in which the industry is looking to alliances, collaborations and joint ventures with information technology companies to realize the commercial potential data they are generating.
To date, biotechnology firms have done deals with either big pharmaceutical firms or other biotechs, which may be competitors in the same area. Now, deals with IT companies are becoming a trend in the industry, Jeff Wiesen, chairman of the Biotechnology Group at the law firm of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C., of Boston, told attendees at the Biotechnology Industry Organization's International Biotechnology Convention & Exhibition.
"We are now moving to a new era," he said. "The amount of data is just overwhelming. It is more than anyone can do anything with. This means it is now crucial to bring together the skills and expertise of biotechnology and information technology."
The role of IT has changed from being a peripheral tool, to being the engine of research and development, and the need for IT is so huge that partnering makes more sense than buying the capacity.
An example of such a marriage between biotechnology and information technology is Myriad Proteomics Inc., a joint venture to map the human proteome set up in March 2001 between Myriad Genetics Inc., of Salt Lake City; the computer manufacturer Hitachi Ltd., of Tokyo; and the database software specialist Oracle Corp., of Redwood Shores, Calif.
Peter Meldrum, president and CEO of Myriad Genetics, said that when the company was considering how to proceed with this ambitious product it initially thought of an alliance with big pharma.
"We entered into a discussion with one [company]," he said. "But, as we thought about the strategy, we felt uncomfortable. We didn't want to be a database company, and we didn't want to be a fully integrated big pharma [firm]."
The best use of proteome data is to find targets and then form collaborations with pharma to develop drugs based on them. "This is a lower-risk but higher-reward strategy than being a database company," said Meldrum.
Having a relationship with one pharmaceutical company would make it difficult to extract maximum value from the proteome, which covers too many diseases and generates too much data for a single pharma company to digest, he said.
"One top of these strategic issues, we then had the problem of the amount of data [that would be generated] and so we decided we needed IT partners," Meldrum said.
The IT partners in Myriad Proteomics also see considerable advantages of a more intimate involvement with biotechnology.
Doug Renert, vice president of corporate development at Oracle, said, "When Myriad approached us, our first inclination was [to ask] how much product we could sell. But it was clear they wanted a strategic relationship." At this stage, Oracle did not have a strategy for the Life Sciences market or any staff dedicated to it.
"We knew the market was important but we were in it solely as a vendor," he said. "The Myriad deal provided the springboard for crafting Oracle's life science strategy."
Similarly, the deal has allowed Hitachi to extend its reach in the life sciences market, said Megumo Kondo, vice president of business development of Hitachi's Life Sciences Group. "The merger between biotechnology and IT is allowing Hitachi to expand into the field of pharmaceuticals," Kondo said. Through the deal with Myriad and a growing number of collaborations with Japanese pharma companies, Hitachi intends to move further downstream in drug discovery.
"We are initially targeting Japan, but we have ambitions to be a worldwide force," Kondo said.
Hitachi and Oracle also made equity investments in Myriad Proteomics, which has 70 staff members and said it is identifying 2,400 protein-protein interactions per day. Meldrum said that within the next four months that will rise to 7,000 protein-protein interactions per day. Based on Myriad's estimate that there are between 50,000 and 55,000 genes, each of which expresses 10 proteins, the company will complete the human-proteome map in 2.5 years.