BioWorld International Correspondent

CAMBRIDGE, England - The number of licensing agreements between pharmaceutical companies and biotechs is increasing, but many of the deal makers are not adequately skilled for the task.

"The skills set required is a very difficult one to acquire," Campbell Wilson, manager of preclinical alliances at AstraZeneca, told a workshop on Outlicensing Deals at the ERBI conference here last week. "Deal makers need scientific, financial and legal training and they must have an understanding of intellectual property rights. It is difficult to get all of this in one package."

Both the pharmaceutical and the biotechnology industries need to recognize deal making as a discipline, and organize development and training to support this. In addition, they must formalize the process of doing deals, he said.

This would avoid companies having to reinvent the wheel every time they set out to agree to a license, and would speed up the process of deal making. There often is a mismatch between what biotech companies are offering, and what pharmaceutical companies require. For example, biotechs could smooth the process by presenting their data in a format suitable for registration purposes.

There also is a tendency among biotech companies to bury the risks involved in their projects. If the risks were overt it would take less time for pharmaceutical companies to decide if they want to take a license.

Although pharmaceutical companies now see in-licensing as a strategic and competitive tool, it remains a buyer's market. Barry Ward, CEO of KuDOS Pharmaceuticals, a start-up focused on DNA repair inhibitors, said this was a threat to the commercial development of biotechnology companies. "Big pharma is hovering up opportunities and is then only too willing to let them go if things change." There is a tendency among pharmaceutical companies "to do a deal for a small amount of money to acquire the opportunity and then they don't do anything with it."

But Wilson said there is "an onus on biotechs to ensure suitable diligence provisions" to prevent this from happening.

Allan Marchington, general manager, Europe, of Millennium Pharmaceuticals, noted that Millennium has changed its deal structure to address this problem. "For example, in the deal we did providing targets to Bayer, there are time limits. If a project does not progress we get it back with all the data."

Marchington also observed that well-established biotechnology companies are now seeking different terms when they do deals, for example, using them to get access to expertise such as sales and marketing.