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September 30, 2002
Volume 80, Number 39
CENEAR 80 39 p. 9
ISSN 0009-2347


Agreements involving Lilly and Roche seen as part of an upward trend


Recently announced drug development and commercialization deals between Eli Lilly and Amylin and between Roche and Kosan Biosciences are part of an uptick in pharmaceutical-biotechnology partnerships that began earlier this year. Such deals dropped off precipitously last year, due to the stalled economy and concerns spawned by the troubled deal between ImClone and Bristol-Myers Squibb.

Roche and Kosan Biosciences have signed a collaboration agreement to develop and commercialize Kosan’s new-generation anticancer drug candidate, KOS-862 (epothilone D), currently in Phase I clinical studies for solid tumors. Lilly announced a similar agreement with Amylin Pharmaceuticals for development and commercialization of Amylin’s compound AC2993 (synthetic exendin-4), a potential treatment for type 2 diabetes now in Phase III clinical trials.

According to Burrill & Co., a life sciences merchant bank, 12 partnerships between pharmaceutical and biotechnology companies were announced in the second quarter of 2002, a 100% increase over the previous quarter. “The need to fill pipelines on the part of large pharmaceutical firms has never been greater,” says Richard Haiduck, a Burrill analyst.

“On the other hand, biotech science is maturing,” Haiduck notes. With a sharp reduction in private and public equity in the biotech market over the past year, the environment is ideal for these partnerships, he says.

In a deal valued at as much as $220 million in milestone payments, Roche will assume the cost of joint drug development with Kosan and will also receive worldwide marketing rights to KOS-862. Kosan will receive royalty payments of an undisclosed amount, according to the company’s president, Michael S. Ostrach. In the second agreement, Lilly may pay Amylin as much as $325 million in up-front and milestone payments.

The deals are significant events for both biotechnology companies. Amylin’s deal with Lilly, which also includes joint marketing of Lilly’s recombinant human growth hormone, marks a rebound from a failed partnership with Johnson & Johnson to codevelop and commercialize another diabetes drug, Symlin.

Amylin’s AC2993 is being studied for its potential to improve glucose control for people with type 2 diabetes. If approved, it could represent the first of a new class of compounds that have similar actions to GLP-1 (glucagon-like peptide-1), a hormone secreted by intestinal cells to control blood glucose levels.

Kosan’s Ostrach says tests show that KOS-862 has the same medicinal properties as Bristol-Myers’ Taxol anticancer drug and that it is effective against Taxol-resistant tumors.


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Copyright © 2002 American Chemical Society

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