Wednesday, May 05, 2010

Notes from BIO: Take Our Molecules...Please!

After hosting a steady stream of panels on biotech-pharma in-licensing over the years, biotech lawyer Barbara Kosacz put it in reverse at BIO Tuesday. The head of Cooley Godward Kronish's life science practice asked her usual lineup of big-pharma BD honchos about out-licensing, long considered a BD backwater -- "The Scarlett 'O'," as Kosacz put it in her blurb.

There has been movement toward making it legit -- Merck said at our PSO meeting in February that its group was formally open for business -- but plenty of hurdles remain. For one, said Kosacz, there's "about a postage stamp" of common ground between pharma outlicensers and the venture capitalists who want to extract assets on the best possible terms.

Indeed, the panelists -- the heads of BD or licensing at Merck, GlaxoSmithKline, Bristol-Myers Squibb, and AstraZeneca -- were happy to blame VCs, who weren't around to defend themselves. (Here's a sample quote from GSK chief of worldwide business development Adrian Rawcliffe on whether pharmas should take equity in startups that form around outlicensed assets: Take equity, he said, but only if you follow on with your investment in future rounds, "or else you get shafted by the VCs.")

Merck chief licensing officer Barbara Yanni had a different lament. Just as Merck finally decided to put things up for sale, she said "isn't it ironic" that biotechs that normally might seek pharma assets have no cash in this tough environment. (Alanis Morrissette was not around to defend herself.) AstraZeneca global head of transactions Shaun Grady summed up the general big-pharma attitude quite well when he said, "Outlicensing isn't our raison d'ĂȘtre, and it's not going to move the needle, but we recognize now that it's a source of value."

Funny, though, that the crowds of biotech BD execs who typically come to see the same folks at in-licensing panels and ply them with business cards only half-filled the room this time. Perhaps it was the "Big O" that scared them away.
Photo courtesy of flickr user paraflyer.

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