Millennium Pharmaceuticals Earns Bonus In AHP DealBy Mary Welch
Millennium Pharmaceuticals Inc. delivered a sixth antibacterial drug target in its screening deal with American Home Products Corp. (AHP), earning an undisclosed milestone payment plus a performance-based bonus for coming up with three drug candidates this year.
Alan Crane, vice president of pharmaceutical business and operations for Cambridge, Mass.-based Millennium, said the company is investigating a "broad spectrum of agents" in the pact with Wyeth-Ayerst Research, which is AHP's main research and development division. Among the disease indications are strep throat, pneumonia and staph infections.
"Many of these pathogens are increasingly becoming resistant to antibiotics," Crane said, " so it is very important that new antibiotics be developed soon. Many of these can still be fatal."
The alliance was formed in December 1996, and Millennium received a bonus for delivering three targets in 1997 as well. The original agreement was between Radnor, Pa.-based Wyeth-Ayerst and ChemGenics Pharmaceuticals Inc., also of Cambridge, which has since been acquired by Millennium. The deal called for ChemGenics to identify small molecule targets and suitable drug lead candidates.
At the time of the arrangement, ChemGenics reported that the alliance was worth up to $70 million over the course of the five years. As part of the deal, Wyeth-Ayerst made a $5 million equity payment and committed to other equity payments of $5 million in 1997 and $3 million in 1998, respectively. Wyeth-Ayerst also agreed to pay $15 million in research funding and up to $9 million in research performance payments. In addition, ChemGenics was to get potentially another $33 million in milestones and royalties. (See BioWorld Today, Dec. 4, 1996, p. 1.)
A month later, ChemGenics scrapped its initial public offering and merged with Millennium in a $90 million deal. (See BioWorld Today, Jan. 22, 1997, p. 1.)
"How we report financial aspects of our alliances is different from ChemGenics' [method]," Crane said. "So, while the original deal was announced at about $70 million, we say it is worth about $20 million, plus milestones and bonuses."
Millennium will continue to use its integrated science and technology platforms to identify new classes of antibiotics by discovering novel targets and conducting high-throughput screening. The current market for bacterial and fungal antibiotics is estimated at about $25 billion, representing the third largest pharmaceutical market worldwide.
The company has another deal with Wyeth-Ayerst to discover and develop products for treating central nervous system disorders. That agreement is worth $90 million in committed funding. (See BioWorld Today, July 18, 1996, p. 1.)
Millennium's stock (NASDQ:MLNM) closed Wednesday at $19.50, unchanged. n