A scent of Spring in dealmaking
Climbing out of the depressed conditions brought on by the great financial crisis of 2009, dealmaking regained some of its vigor during BIO-Europe Spring® 2010 in Barcelona. Confirming that the spring may indeed be back in biotech dealmaking, privately owned Cellzome and Glaxo used this high profile partnering venue to announce a drug discovery deal worth up to EUR 508 million, while in other news Novartis announced an option deal with Transgene worth up to US955 million for its late-stage cancer immunotherapy.
Regina Hodits
The moderator for the opening panel discussion, Regina Hodits, a partner with Atlas Venture, offered a quick look backward to put the recent trauma into perspective, saying that she found surprising stability in what most consider to be highly volatile dealmaking between pharma and biotech firms.
She then set about working with the panelists for the discussion to “tease out what has changed and to see if we can really expect more of the same.”
The plenary session, “Collaboration in the Next Decade: Will 25 Years of Partnering Experience Lead to Greater Productivity?” brought together two representatives of venture arms of large pharmaceuticals, Shelagh
Shelagh Wilson
Wilson from GlaxoSmithKline and Isabelle Thizon De Gaulle from sanofi-aventis, accompanied by the CEO of a smaller company with a sharply defined dealmaking profile, Ignacio Faus of Palau Pharma.
A nervous look at the recent past might mask the fact that the industry has seen a steady increase over a 15-year period in the number of deals and a tremendous increase in deal values, even after discounting some of the mega-events, reported Hodits.
A review of more recent deals covering collaborations, co-developments, acquisitions and licensing, shows that boundaries between these categories are now blurring as partners seek out win-win positions where they share more equally in the deal value.
New models for collaboration were outlined by the three panelists, though each aims to achieve different objectives.
Wilson heads the Centre of Excellence for External Drug Discovery (CEEDD) at GlaxoSmithKline with a focus on encouraging early stage programs and novel technology platforms.
The deals are dictated by the needs of partners, with risk being shared around and no funding provided for research, though CEEDD offers upfront payments that aim to underwrite the work.
Independence for the biotech partner is the goal of these criteria, “and we are very comfortable with having a light touch,” she said, adding that GlaxoSmithKline begins to exercise a firm hand once a program delivers proofs and moves toward clinical stages.
Ignacio Faus
CEO Faus at Palau works what he described as a very straightforward business model that aggressively searches for drug discovery and supports it to a hard stopping point, which he set at the Phase IIa clinical stage. But, as Fierce Biotech reports, the strategy of out-licensing early stage compounds in not without pitfalls. Back in 2005, Palau licensed an early stage program to Organon, which later merged with Schering-Plough, which later merged with Merck. His program is still in Phase I.
Thizon De Gaulle, who leads R&D Scouting and Partnering for sanofi-aventis, has built an entirely new network of actors to explore how new kinds of collaboration and dealmaking can advance programs from academic institutions, government supported programs and acquired firms.
“We seek to embrace these partners, but at the same time to keep the entrepreneurial spirit, or in the case of academics to encourage their independent spirit,” she said, adding that this is a critical part of her mission.
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