By Randall Osborne
West Coast Editor
SAN FRANCISCO ¿ Promising several hundred attendees ¿a little taste of everything¿ about partnerships and pipelines, Pamela Demain, director of corporate licensing for Merck & Co., opened the first day of sessions in Allicense 2001.
About 400 people have registered for the fifth annual conference, sponsored by Recombinant Capital Inc., of San Francisco, this year titled ¿Partnering After the Boom: Who¿s Calling the Shots Now.¿
The audience got just what Demain promised in the panel she moderated, called ¿Building a Major Pharmaceutical R&D Pipeline Via Alliances.¿
Demain, saying Merck, of Whitehouse Station, N.J., aims to focus on ¿growth through science, rather than size,¿ turned over the microphone to Chris Seaton, senior vice president of global licensing for the pharmaceutical division of Bayer AG, of Leverkusen, Germany.
Seaton said shifts in research and development ideas and funding are part of an increasing trend toward the coming together of pharmaceutical companies and biotechnology firms.
¿It seems as though every day, we either hear about another merger or rumors of a merger,¿ Seaton said. ¿That¿s created a new dynamic in the industry. The mega-launch¿ is the latest. It seems as though everybody who launches a new drug launches it with 6,000 sales reps calling on every doctor in the country 16 times a month. Of course, they don¿t get to see them [more than] 15 seconds, but that¿s neither here nor there.¿
Despite boosts in R&D funding, the output of new drugs has stayed the same or dropped, he said. Many prospects must be generated for one to pan out, he added.
¿Having returned from Japan for this conference, the image that I have of some of the largest companies is of an enormous Sumo wrestler, running up the down escalator,¿ Seaton said. ¿The bigger they get, the harder they have to run, just to stay in place.¿
Bayer is no different, he said. With research priorities in 13 areas, ¿frankly, if you look at our output, which is about half a drug per year [in recent years], it clearly wasn¿t enough for us to grow at or with the market. We decided we needed to get to about two new chemical entities a year, just to have growth above the market,¿ and others might need even more.
¿Well, if you¿re going to get two new chemical entities per year to market, you need at least 20 development candidates every year, given the industry¿s standard success rate,¿ Seaton said. ¿We needed a competitive technology platform. Most of the technology is out there, and you have to be willing to go out and get it.¿
He cited the potential $465 million deal signed by Bayer with Millennium Pharmaceuticals Inc., of Cambridge, Mass., in 1998. (See BioWorld Today, Sept. 24, 1998.)
¿We believe we will identify well over 30 drug development candidates from this deal,¿ Seaton said. ¿In fact, we have already moved our first candidate into development. We¿ve gone from tissue to gene to development candidate in 18 months, vs. our previous standard of three and a half years.¿ Millennium said earlier this year the molecule is an enzyme, known to inhibit cell proliferation, possibly not in a tumor-specific way. (See BioWorld Today, Jan. 11, 2001.)
At the Allicense conference Tuesday, Seaton said the drug will be tested against breast and lung cancer. ¿We see this as proof of the pudding,¿ he said. ¿[It¿s] the first of many to come.¿
As an example of shopping for technology to keep up with the need for drug candidates, Seaton also noted the deal made in January with CuraGen Corp., of New Haven, Conn., focused on metabolic disorders, including obesity and adult-onset diabetes. The terms call for joint research funding for up to 15 years and $1.34 billion, with an aim of bringing to the clinic 12 small-molecule drug candidates selected from 80 targets provided by CuraGen over the next five years. (See BioWorld Today, Jan. 17, 2001.)
The metabolic disease area was excluded from the Millennium deal, Seaton said.
¿For reasons I can¿t understand, they partnered that with someone else,¿ he remarked, with a chuckle, to Steve Holtzman, chief business officer of Millennium, another panel member, who smiled back.
With pharmaceutical and biotechnology figures on the dais, the morning was dotted with such banter. Holtzman, at his turn to speak, praised a Merck slide he had seen in an earlier presentation, which said, ¿99 percent of the research is done outside of these walls.¿
Holtzman paused. ¿You¿d never know it, from trying to do a deal with them,¿ he said, drawing a laugh from the crowd.
He urged companies to view collaborations not as ¿notches on your gun belt,¿ but as a way of implementing strategy. Holtzman said he is a believer in equal value for both partners, but ¿the nature of the value is different,¿ he said.
¿Big pharma is trying to build a technology platform, trying to build a pipeline,¿ whereas the biotechnology firm is mainly trying to build a company.
¿The more you can understand their thinking, the more you can play with the hydraulics of the deal,¿ he added, speaking to those on both sides of the negotiating table.
CuraGen, the other Bayer collaborator, had a place on the panel, too. Christopher McLeod, vice president, said genomics can have use not only in determining targets, but also ¿can have value throughout the life of drug development.¿
That means collaborations with pharmaceutical firms and other biotechnology companies, as well as efforts in house, he said.
¿In the area of protein drugs, there are about 90 that we consider candidates of CuraGen, and 34 of them are currently in animal models,¿ he said. ¿In the antibody targets, we have about 1,500 under evaluation.¿ Of these, McLeod added, 120 are considered good targets, and 30 ¿have already been put into a program we have with Abgenix [Inc., of Fremont, Calif.].¿
CuraGen¿s original deal with Abgenix, a transgenic mouse company, was signed in late 1999. It was expanded about a year later. (See BioWorld Today, Dec. 10, 1999, and Nov. 29, 2000.)
The conference continues through today.