BIO 2010: A place for new biotech deals emerging?

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I've been following the annual Biotechnology Industry Organisation (BIO) Conference being held in Chicago remotely on Twitter (check out the hashtag #BIO2010) while busy with client work this week and secretly thanking my lucky stars that I'm office bound and not whinging about sore feet myself as McCormick Place has hard floors and miles of corridors!  Much of the lifestream seems to be a lot of moaning about the limited/almost non media access to the keynotes and grumbling about the general lack of social media savvy of the organisation. No surprises there.

Still, in a world where life seems to be increasingly on 24/7, this interesting little snippet from the San Francisco Business Times was much more revealing:

"Big drug makers are ready to make a deal.  

With some facing a multibillion-dollar patent cliff and others just trying to expand their focus, big biotech and pharmaceutical companies are reaching out to capture potential products from other companies. 

That played out at the recent Biotechnology Industry Organization convention in Chicago. While smaller, privately held companies continued to dominate the number of 15-minute pitches, South San Francisco-based biotech biggie Genentech Inc. and German goliath Bayer Schering Pharma AG also spun out appeals to smaller companies to sell out or partner up.
The list of big companies taking time slots to make similar pitches included the likes of Pfizer, Merck AstraZeneca, Eli Lilly and GlaxoSmithKline."


It's a few weeks post AACR and a month before the run-up to ASCO, also oddly in Chicago, and thus companies interested in oncology will have been evaluating the latest AACR data and thinking about whether or not to make a move before the competition do.

Of course, with many companies facing a potential perfect storm of patent cliffs and a shortfall in the in-house pipelines over the next few years, everyone is desperately hunting for 'breakthroughs'.  These are never a sure fire thing and are very hard to predict.

Increased activity and competition for licensing deals also means good news for the little companies as supply and demand may well drive prices up.  It will certainly be interesting to see who pounces over the next few weeks and many investors will be scanning their crystal balls hard for clues.  

Who do you think will be snapped up?

  • craig

    I thought Exelixis was going to get snatched up, but the stock is acting terrible, so, its not looking likely.
    Keryx might be a good one. Still a very small market cap.
    Curis, possibly. They have partnership with Genentech for a couple of compounds.
    Ariad, maybe, not likely. Think the CEO wants to go it alone, despite a big partner in Merck.

  • http://profile.typepad.com/maverickny MaverickNY

    The big Pharmas are waiting to see whether the EXEL drugs to pan out or not. Constant claims of best in class are mere marketing hype until the data is in.
    KERX have perifosine, which may do well but myeloma will be a tough market to crack with Velcade and Revlimid so deeply entrenched.
    Curis are interesting. I like their Hh compound but have a feeling the more targeted 2nd generation inhibitors will be better.
    Ariad have made a stunning announcement this week and are passing over the ridaforolimus commercialisation to Merck so they can focus on the T315I and ALK inhibitors.
    See: http://phx.corporate-ir.net/phoenix.zhtml?c=118422&p=irol-newsArticle&ID=1422441&highlight=

  • craig

    Thanks Sally,
    I actually own all four of those names.
    What do you make of Merck and Ridaforolimus. I thought the terms of the deal were pretty good. I think it would have taken years to make the amount of money Merck gave Ariad upfront, rather than Ariad actually selling it etc etc. Ariad has no costs anymore, and royalties. I kinda like the deal.
    I still don’t know if Ridaforolimus will have any success in the single-agent setting, with sarcoma. Thoughts?
    Merck seems to need the drug for it to work with a few of their other compounds (data to be released at ASCO in re: IGF1 inhibitor and Rida mTOR)

  • http://profile.typepad.com/maverickny MaverickNY

    I like the deal a lot for both parties, Craig.
    Ariad get money to invest and speed the pipeline to market, while focusing on their strengths.
    Merck get to develop the compound more flexibly in multiple combinations with IGF-1R, MEK, AKT etc and commercialise it without being hampered by small biotech inexperience.
    There a clearly some sarcomas that respond well to an mTOR and achieve at least SD, but ultimately, I think combination is the way to go, especially with an IGF-1R perhaps. Merck have good scientists who can figure out the options with more freedom.
    Overall, a win-win for both parties.

  • http://profile.typepad.com/maverickny MaverickNY

    Craig, I did some research and it would seem that drug resistance to mTOR may be driven by AKT and c-MYC.
    This would offer us some clues on where new combinations might lie, especially as Merck have MK-2206, an AKT inhibtor in development.

  • craig

    Yes, thanks. I saw that their was some pre-clinical data at AACR regarding Ridaforloimus and 2206.

  • http://profile.typepad.com/maverickny MaverickNY

    Indeed. And the fun part is that different subtypes may need different combinations.
    Such as mTOR and PDGFR-alpha in synovial sarcomas, for example:
    http://www.abstractsonline.com/Plan/ViewAbstract.aspx?sKey=99ddc3e6-a66b-4168-ba12-e78c5c78ee7d&cKey=ac667a13-ee6b-44e5-94eb-89dedd645732&mKey=%7b0591FA3B-AFEF-49D2-8E65-55F41EE8117E%7d