Certainly the stars in the field are still well aligned: Big Pharma has the cash, while small biotech has the ideas without the assets to commercialize them. Our group consensus is the gap needs to be bridged—and at no time in recent vintage can a better case be made for enlightened government policies on IP, taxes, and other incentives. But will election-year politics intervene and give the industry a bunt single rather than a home run?William Looney, Pharm Exec: Forward-looking surveys such as the Campbell Alliance annual review of dealmaker intentions suggest that a fundamental change is under way in the targets for investment. At the same time, the volume of transactions has yet to mark a full recovery from the low point in 2009. Overall, does this mean that selectivity is now the most prominent theme in sealing a good deal?
Ben Bonifant, Campbell Alliance: Our latest analysis presents a mixed picture. There has been a recovery in deal volume from the low point in 2009, but that has to be evaluated in terms of which phase of the development cycle attracts the greatest interest. Our findings indicate that licensing activity for compounds in Phase III of development has been flat for the past two years. Conversely, Phase II deals experienced a sharp pickup last year, more than compensating for the near-collapse of that segment in 2009. However, this might be seen as a temporary trend, as it has not continued into the first quarter.
What the survey is now showing is significant new interest in early phase deals. We see a return to seeking commercial potential in basic research, as a way to stay ahead in the competition for new treatments.
WL: Does this trend account for the commitment of Big Pharma in exploring new models of partnership in business development?
Bonifant: Yes. It is driving the outreach to academic institutions around translational medicine and helping to refine priorities of corporate in-house venture capital (VC) groups. Companies are striving to be more strategic in evaluating targets among a complex set of opportunities and risk, by prioritizing the best fit around therapeutic classes. Surprisingly, previous winnowing out criteria like not being first in class counts less than finding the right disease segment, with a compound that fills an unmet medical need. We also found that the hype around companion diagnostics may be misplaced. These don't rank as high as a focus for in-licensing activity. What is attracting interest is antibody drug conjugates, where there is promising early-stage activity and not much on the market already.