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Pharmaceuticals

Drug Majors Push Into Biotechnology

Wyeth, AstraZeneca carry their run on collaborations into the new year

by Rick Mullin
January 9, 2006 | A version of this story appeared in Volume 84, Issue 2

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Credit: Wyeth Photo
Redmond
Credit: Wyeth Photo
Redmond

Big pharma's push into biotechnology continued in the first week of 2006 with Wyeth and AstraZeneca each announcing a third deal with a biotech firm in as many weeks.

Wyeth, which recently signed deals with Progenics and Exelixis (C&EN, Jan. 2, page 12), announced a collaboration with Trubion Pharmaceuticals over inflammatory disease and cancer therapies. AstraZeneca, having just announced agreements to acquire KuDOS Pharmaceuticals and to develop a drug with AtheroGenics, agreed last week to work with Targacept on a compound in Phase II clinical trials for treating Alzheimer's disease and schizophrenia.

"The flurry of activity at companies such as Wyeth and AstraZeneca reinforces what we have seen all last year," says Peter Winter, director of communications at Burrill & Co., a venture-capital firm that specializes in biotechnology. He says drug companies are pursuing deals to advance their pipeline or strengthen programs for novel therapies. "What biotech has, pharma needs, and it is willing to pay a premium to access this innovation."

Under the terms of its new collaboration, Wyeth will work with Trubion to develop and commercialize the latter's CD20-targeted compounds, including TRU-015, a candidate in Phase II trials for rheumatoid arthritis. Trubion will receive an initial $40 million payment and milestones that could exceed $800 million, excluding royalties.

AstraZeneca's deal with Targacept entails an exclusive global licensing and research pact for the development and commercialization of Targacept's Phase II compound, TC-1734. Targacept will receive an initial payment of $10 million and could receive milestone payments up to $300 million plus royalties.

Wyeth, which bills itself as the world's fourth-largest biotech company, last year opened a $2.1 billion research and manufacturing operation in Grange Castle, Ireland, and a process development facility in Andover, Mass. With a target of 25% of its revenue in 2006 coming from biopharma-based products, Wyeth will now focus on deals and partnerships to expand its business, according to Cavan Redmond, executive vice president of the firm's biopharmaceuticals business.

"We are looking for the next generation of proteins or antibodies that would allow us to have unique discovery targets and enable us to go after the market to meet unmet needs in a new way," Redmond says. "That's where Trubion fits in." He notes that the agreement with Trubion gives Wyeth access to the biotech firm's small modular immunopharmaceutical technology, an alternative to monoclonal and recombinant antibodies.

AstraZeneca's newly appointed CEO, David Brennan, has stated that the company will actively pursue collaborations and acquisitions. The recent deals support existing businesses in the areas of neuroscience, cancer, and cardiovascular therapies, according to a company spokeswoman.

Burrill's Winter expects the drug sector's run of biotechnology deals to continue this year. "The unfolding story is pharma's willingness to partner earlier with biotechs," he says. "The reason for this is that deal making has become much more competitive as companies jockey for best-of-breed technologies and companies."

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