

The Concert deal’s on the rich side, but typical in structure (and that’s why it’s such a perfect template): GSK paid $35 million up front (including $16.7 million in equity, another way to spread risk) for options on three projects, the most advanced of which started Phase Ib in November this year, the least advanced of which hadn’t even been selected at the time of the deal. GSK can opt into these programs at clinical proof-of-concept (or slightly earlier, at Phase I, for the lead). If it does, Concert begins to access various slugs of milestone money, mostly tied to clinical and regulatory achievements. So the biotech got $12 million a month or so ago for starting Phase Ib on the lead; its total milestones may reach over $1 billion.
This isn’t just a risk-sharing deal structure, it’s risk-sharing deal content, too: Concert’s compounds are mostly deuterated versions of existing molecules (the lead is a version of Bristol’s HIV drug atazanavir, for instance)—meaning it has replaced hydrogen atoms with deuterium atoms, creating new, patentable chemical entities that skirt existing IP and that may even be safer and/or more effective than the originals.
Beyond the Concert deal GSK has an orchestra of others: Chroma (Jun 09), Protea Vaccine Technologies (Jun 09), Vernalis (Aug 09) or SuperGen (Oct 09) for example. And don't overlook the dual-melody rare disease pact with Prosensa (Oct 09), which comprised a straightforward licensing deal and an option component. For a recent addition to the group, check out the November GSK/Nabi deal, which includes $40 million up-front for the option to license smoking cessation vaccine NicVAX, currently in Phase III.
image from flickr user greenbloodman used under a creative commons license
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