It's always a bad break when there is a check to deposit (in this case, a BIG check) and the bank is closed for a national holiday. If it weren't for the existence of wire transfer mechanisms, that would have been the situation Millennium Pharmaceuticals Inc. faced Wednesday upon receiving a $33.4 million payment from Bayer AG as a result of the expiration of the Hart-Scott-Rodino waiting period for review of a drug discovery alliance between the two companies. The $33.4 million payment represents an up-front license fee. Bayer also made an equity investment of $96.6 million — or 14 percent — in Cambridge, Mass.-based Millennium. The issuance of almost 5 million shares of Millennium stock to Bayer has already taken place.
In September, Millennium and Bayer, of Leverkusen, Germany, inked what is believed to be the largest drug-discovery deal in biotechnology history, a genomics-based pact worth up to $465 million. Over the next five years, Millennium will supply Bayer with 225 targets with relevance to cardiovascular disease, cancer, osteoporosis, pain, liver fibrosis, hematology and viral infections.
"We think the combination of our science and technology platform and Bayer's high-throughput screening could revolutionize drug development," said Rebecca Peterson, corporate communications assistant at Millennium.
Of the $465 million, up to $368.4 million will consist of guaranteed funding and performance fees for drug targets identified, and a license fee for use of Millennium's genomics technologies. Bayer also will pay royalties. Millennium could potentially reap more than $1 billion from the collaboration. (See BioWorld Today, Sept. 23, 1998, p. 1.)
Carl Gordon, an analyst with Orbimed Advisors in New York, told BioWorld Today that "Bayer is using Millennium as its drug-discovery pipeline." (See BioWorld Today, Sept. 24, 1998, p. 1.)
To meet the challenge, Millennium plans to add about 50 persons, mostly in the research department, to its staff of 680. "Millennium has one of the largest, if not the largest, research staffs of all the biotechnology companies," Peterson said.
Under the terms of the deal, Millennium will identify and validate targets, and will share responsibility with Bayer for configuring assays for screening. Bayer will be responsible for high-throughput screening, and the two companies will share the tasks of qualifying and developing lead compounds.
Millennium can advance any of the 225 targets that Bayer chooses not to develop. In another unusual move, Bayer must move along the targets according to an agreed-upon timetable.
Millennium's stock (NASDAQ:MLNM) closed Wednesday at $18.937, down $0.563. n