Emerging Business Models in the Pharmaceutical Industries ...

There are two main types of M&Q activities:
• biotech to pharma
•biotech to biotech
Biotech to pharma
CuraGen/Bayer: This $1.5 billion deal is slated to be the
most valuable drug discovery and development alliance
for a biotech company. Bayer purchased $85 million in
CuraGen stock, committing $39 million to develop its
databases. Bayer will find drugs that work on the 80 gene
and protein targets for obesity and diabetes drugs
identified by CuraGen. The deal involves joint clinical
development of 12 drug candidates, a 56/44 split of up to
$1.34 billion in development costs, and profit sharing in
the same proportion.
Millennium Pharmaceuticals/Abbott Laboratories:
The companies collaborated to identify drug targets for
obesity and diabetes, and to develop drugs. Abbott
bought $250 million in Millennium stock and while
Millennium will not receive royalties, Abbott will share all
discovery development and commercialisation costs on a
50/50 basis.
Vertex Pharmaceuticals/Novartis: For this potential
$800 million deal, Novartis will pay Vertex $215 million
over six years in exchange for eight protein kinase drug
candidates. Vertex will receive up to $200 million in
Mergers & Acquisitions
interest-free, forgivable loans, as well as royalties. Novartis will
retain worldwide development, manufacturing, and marketing
rights to the eight candidates, while Vertex will get copromotion
rights in Europe and United States.
Biotech to biotech
CuraGen/Abgenix: CuraGen will identify 250 antigens across
all diseases as potential drug targets over the next five years.
Joint selection teams will select the most promising targets and
Abgenix will use its “XenoMouse” technology to develop
therapeutic antibodies at these targets. Each company will
individually own and commercialise 12 of the 24 drugs
targetted, and pay cross-royalties.
Maxygen/InterMune: InterMune will clinically develop nextgeneration
interferon gamma product candidates created by
Maxygen. While InterMune will get exclusive worldwide
commercialisation rights for all human therapeutic indications,
Maxygen is entitled to upfront license fees, full research
funding, development and commercialisation milestone
payments, and royalties on product sales.
Strategic Analysis of the Pharma Market, Future Revenue Models and Key Players 40