By Randall Osborne
West Coast Editor
Millennium Pharmaceuticals Inc. and Abbott Laboratories signed a hefty deal focused on obesity and diabetes - an agreement made especially sweet by Abbott's pledge to buy $250 million in Millennium stock.
Under the terms of the five-year pact with Abbott Park, Ill.-based Abbott, the latter will buy $50 million in Millennium stock when the deal closes, and $200 million more over the next two years.
Sharing equally in all phases of development, the companies also will split costs related to candidates already in their pipelines. Together, they plan to put two drugs into the clinic by 2002, advancing two or three more drugs to that stage every year after.
Millennium, of Cambridge, Mass., and Abbott are splitting commercialization efforts in the U.S., with Abbott responsible for them in the rest of the world, although Millennium gets the right to co-promote in major European markets. Worldwide profits will be shared.
Combined, Abbott and Millennium have more than 35 projects in obesity and diabetes. Scientists from both firms began three days of meetings Sunday to evaluate the projects. Aside from a few limited exceptions, neither company will work with others on the two indications.
Abbott said it will fold into the alliance the Type II diabetes targets and lead compounds developed in earlier deals with the Swedish firm Karo-Bio AB, and Metabolex Inc., of Hayward, Calif. (See BioWorld Today, June 26, 1997.)
Also recently acquired by Abbott is the obesity management drug Meridia, which was part of the buyout from BASF Pharma of Mt. Olive, N.J.-based Knoll Pharmaceuticals Co. Inc.'s global operations. That deal closed earlier this month.
Mike King, an analyst with Robertson Stephens Inc., said Meridia "won't be [part of Abbott's deal with Millennium], but will give them an entrie into the obesity market."
The two firms "must have been working on this for a long time," King said. "It was going to close at the end of last year, but it must have been mucked up by the Knoll acquisition."
Millennium company officials were traveling and could not be reached. King told BioWorld Today that fierce competition in obesity and diabetes drug development means neither company is talking much about its next move, but Millennium's might be partly obvious.
"They've got this FATp4 [fatty acid transporter] target, which is one they will probably go after pretty quickly," he said. "It seems to be the most druggable." The target is related to fat absorption. Other targets may have to do with satiety.
"Certainly, someone who's fat . . . that's obvious," King said. "But there are different kinds of phenotypes, and different kinds of fat. They have different prognoses, or outcomes, and if [the patients] can't control their appetites, that's another matter."
Although the Millennium-Abbott research will focus mainly on small molecules, it could branch into proteins, antibodies and antisense drugs for metabolic diseases, and both firms will pursue in-licensing of new therapeutics. More than 225 scientists make up the initial team, with more to come, the companies said.
Genomics figures large in the deal, which includes a provision for developing pharmacogenomic and traditional diagnostic assays that are directly related to gene targets and drugs developed as part of the alliance. Abbott would sell the diagnostic tests to researchers and laboratories, and Millennium would join in promoting them to physicians and patients.
There will be some nonexclusive trading of technology, too. Abbott will make available its Structure Activity Relationship by Nuclear Magnetic Resonance, along with robotics crystallography, to Millennium, which in return will offer access to some of its bioinformatics software. Together, the firms aim to refine predictive toxicology tools, sharing equally in the costs.
Last June, Millennium entered a potential $450 million deal for anti-inflammatory drugs with Aventis Pharma, the pharmaceutical company of Frankfurt, Germany-based Aventis SA, which bought an equity stake of $250 million. (See BioWorld Today, June 26, 2000.)
The Aventis collaboration involves the transfer of Millennium technologies - a larger transfer than is going from Millennium to Abbott, said a Millennium spokesperson. King said the Aventis deal "could be quite a bit larger, if all the things come together, but it also needs to be larger" than the 50-50 Abbott deal.
Abbott's bid to acquire Alza Corp., of Mountain View, Calif., fizzled in late 1999, and the company's clot-buster, Abbokinase, awaits FDA permission to go back on the market, after manufacturing concerns halted sales.
Millennium's stock (NASDAQ:MLNM) closed Monday at $25.187, down $3.875 on a day the biotech sector got socked. Abbott's shares (NYSE:ABT) ended the day at $47.19, down 57 cents. n