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DRUG MAJORS PUSH INTO BIOTECHNOLOGY Wyeth, AstraZeneca carry their run on collaborations into the new year
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IG PHARMA'S PUSH INTO BIO-
technology continued in thefirstweek of 2006 with Wyeth and AstraZeneca each announcing a third deal with a biotechfirmin as many weeks. Wyeth, which recently signed deals with Progenies 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 WWW.CEN-0NLINE.ORG
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 biopharmabased 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.
ENERGY IN
"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-ofbreed technologies and compa_.!-»-, "
r t i / M / k jit ii i I K I
EUROPE
Natural Gas Dispute Is Settled, But Questions Remain
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nergy officials from Russia and Ukraine on Jan. 4- settled a dispute that had prompted Russia's largest natural gas supplier, Gazprom, to shut off shipments of fuel to Ukraine. The dispute certainly disrupted the supply of natural gas in Ukraine. It also caused serious shortages in countries in Central and Western Europe because pipelines carrying natural gas to those areas traverse Ukraine. Although the disruption was short-lived, it has caused a spate of European rethinking about the security of the energy supply. Russia supplies a quarter of Western Europe's natural gas, and 80% of that supply travels through the Ukrainian pipeline. Other pipelines serve the region as well; a new one, scheduled for 2010, will be built jointly by Gazprom, which is controlled by the Russian government, and
Wintershall, the oil and gas subsidiary of BASF. At the heart of the Ukrainian dispute was Gazprom's decision to more than quadruple its price to the former Soviet Union member. The move was widely seen as a decision by Russian President Vladimir Putin to punish the Westleaning Ukrainian government, although Gazprom officials insisted the change was to bring the gas price to global levels. The price would have risen to $230 per 1,000 m 3 from $50. Other Russian allies, including Belarus, continue to pay at the low level. Even the Baltic countries Latvia, Lithuania, and Estonia—former U.S.S.R. member countries but now members of the European Union—are charged $110 per 1,000 m 3 . In the new agreement, Ukraine will pay $95 per 1,000 m 3 . In addition, Gazprom will pay more to ship gas through Ukrainian pipelines.—PATRICIA SHORT
C & E N / J A N U A R Y 9, 2006
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