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Wyeth Signs Three Biotech Product Deals: The Agreements Were an Indicator of the Direction That Major Pharmaceutical Companies Are Heading

Posted on: Monday, 9 January 2006, 12:00 CST

By Linda Loyd, The Philadelphia Inquirer

Jan. 9--In another sign that large drug companies are banking on biotechnology for their future, Wyeth signed product-development deals with three biopharmaceutical firms in the last 21/2 weeks.

Wyeth said Tuesday that it reached a deal with privately held Trubion Pharmaceuticals Inc. in Seattle to develop and comarket the smaller company's treatments for inflammatory diseases and cancer.

Wyeth paid Trubion an initial $40 million, and could pay more than $800 million, excluding royalties and copromotion fees, if certain development milestones were met.

Trubion's most advanced product is an experimental drug in mid-stage trials for rheumatoid arthritis. But the deal gives Wyeth access to technology that could lead to drugs for cancer and immune-system disorders.

"We are looking for a truly breakthrough technology that could take protein or antibody discovery up a notch," said Cavan Redmond, Wyeth's executive vice president for biopharmaceuticals in Collegeville, Montgomery County. "That's why we got interested in Trubion."

By 2009, Wyeth anticipates that one-half its pharmaceutical revenue will come from biotechnology medicines, which are derived from living cells such as proteins, enzymes and antibodies. In 2004, its pharmaceutical revenue was $14 billion.

Currently, Wyeth sells seven biologic drugs, including the widely prescribed monoclonal antibody Enbrel for rheumatoid arthritis and the pneumococcal vaccine Prevnar for infants.

Through a series of biotech acquisitions and collaborations since the mid-1990s, Wyeth says it is now the fourth-largest biotechnology company, behind Amgen Inc., the market leader; Genentech Inc. and its parent company, Roche Holding Ltd.; and Johnson & Johnson, which owns Centocor Inc., in Horsham, as well as Ortho Biotech Products L.P.

Enbrel, which Wyeth comarkets with Amgen, had $2.6 billion in global sales for the first nine months last year. (Wyeth's share was $785.6 million.) Wyeth's pneumococcal vaccine Prevnar racked up $1.1 billion in sales through Sept. 30. Fourth-quarter sales will be released Jan. 31.

The deal with Trubion came less than two weeks after Wyeth agreed to pay as much as $416.5 million and other fees to another biotech company, Progenics Pharmaceuticals Inc., for rights to an experimental treatment for constipation and post-operative bowel dysfunction caused by use of opioid painkillers.

Progenics' experimental drug, methylnaltrexone, is in late-stage testing. Wyeth says there are currently no therapies approved to treat side-effects of opioid use. The publicly held Progenics is based in Tarrytown, N.Y.

On Dec. 22, the day before the Progenics deal was announced, Wyeth signed a license agreement with Exelixis Inc., of South San Francisco, to develop treatments for metabolic and liver disorders.

Exelixis, which is also publicly held, said that under the agreement it would get a $10 million upfront payment and may also get up to $147.5 million in development and milestone payments as well as royalties.

At a time when big drug companies everywhere are scrambling for profitable new products, Wyeth, through its BioPharma unit in Collegeville, wants to expand its biotechnology business.

In the past, big drugmakers made medicines with chemicals in the form of capsules, tablets and liquids. Then, in the '80s and '90s, smaller biotech firms cropped up, using biotechnology developed in university and research labs.

As Big Pharma's product pipelines dried up, companies began buying or licensing biological therapies and acquiring small entrepreneurial firms. Many companies, including Wyeth, have revamped internal research and development operations and expanded biological research.

Wyeth has eight proteins currently in development and sells seven biotech drugs. In addition to Enbrel and Prevnar, they include two hemophilia drugs, a protein treatment to stimulate bone growth, and two cancer therapies. All are made from proteins or antibodies.

Wyeth in the last three years expanded its capacity to manufacture biologicals, building a clinical trials manufacturing plant in Andover, Mass., and a $2 billion biotech campus in Grange Castle, Ireland, outside Dublin.

Contact staff writer Linda Loyd at 215-854-2831 or lloyd@phillynews.com.

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Source: The Philadelphia Inquirer

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