Pharmaceutical conference 'an incubator' for future deals

About 70 industry giants hunt for next success

Gillian Shaw
Vancouver Sun
Tuesday, February 07, 2006

Deal-makers from close to 70 pharmaceutical giants converged on Vancouver on Monday for the fourth annual BioPartnering North America conference looking to uncover the latest drug discovery or promising new company that could translate into a multi-million-dollar deal.

That's an increase of 50-per-cent participation at the conference this year over last and Karimah Es Sabar, executive director of B.C. Biotech said the increased interest is evidence of the province's growing reputation for innovative and successful science.

"In one-to-one deals, this is the meeting," she said. "Definitely key deals are initiated here."

While it's not like this week's Vancouver boat show where organizers can point to millions of dollars in signed contracts, Es Sabar said BioPartnering North America claim credit for being the catalyst behind partnership and licensing deals.

"This conference is a great incubator for those initial-stage introductions," she said.

With deals taking months and upwards of years from initial meetings through due diligence to signed contracts, the measure of this year's BioPartnering success won't be known for some time but companies delivering pitches in the hope of attracting partners are optimistic.

"These two days we expect to do additional deals," Kevin Heyeck, vice-president of business development at the Pennsylvania-based Vitae Pharmaceuticals, pitching his firm's work developing drugs in cardiovascular diseases, cancer and dermatology that has already resulted in one deal with a major pharma.

Es Sabar said deals are in the works from previous BioPartnering conferences and one, an alliance between the local company Chromos Molecular Systems Inc. and pharma multinational Pfizer has already grown from the initial deal.

"B.C. Cancer told me they did two of their best deals at BioPartnering," said Es Sabar. "The Chromos deal with Pfizer was initiated two BPNs ago and they have expanded that deal. "This is a direct consequence of BPN."

Participating companies pay a whopping $2,000-plus registration fee, but that includes an opportunity to book tete-a-tetes with companies that might not otherwise spare them the courtesy of a meeting. "They wouldn't get past the door of these companies," Es Sabar said.

The pharmas may not have their wallets wide open but they are shopping in an increasingly competitive market.

"A lot of companies outside big pharma are getting involved in deal making," James Watson, managing director and head of the merchant banking group at Burrill and Company told delegates. "Big pharma does not have quite the monopoly they have had historically."

Watson pointed out that in 2001, the top companies accounted for 74 per cent of the total value of deals made and for 41 per cent of the volume. Their share has since dropped to 48 per cent of the total value of deals and to 27 per cent of the volume.

In a session dominated by representatives of major players in the pharmaceutical industry, delegates heard the total takeover and assimilate model is giving way to more strategic investment in which the scientists and leadership of the targeted company stays on.

"We've done a lot more licensing over the last five or six years," said Dr. James Schaeffer, executive director of worldwide licensing and external research at Merck & Co., Inc. "External alliances are extremely important to us."

Such collaborations mean both the suitor and the sought-after embark on their valuation process, for one to determine of the match is worth it to them and for the other to consider such factors as how the partnership will advance development and not just raise their bank balance.

"The process is really one of sharing strengths between ourselves and our partners, but we also need an understanding that we are going to share the successes," said Schaeffer.

That's an important consideration for biotechs here as they consider would-be suitors, according to Gordon McCauley, a veteran of B.C.'s biotech sector and chief executive officer of Allon Therapeutics Inc.

"It's not just about dollars and cents; the strategic fit is pretty important as well."