Pharm Exec: What's your general outlook on where partnerships between pharma and biotech companies are headed?
Drakeman: When I first started in biotech, it was very hard to finance biotech companies. And biotech companies desperately needed partnerships. They did them on terms that today we would find unacceptable—you know, relatively modest royalties, relatively modest milestones.Then we saw a new era. In the last four or five years—starting in 2000—biotech companies have been able to fund themselves better and are able to do more late-stage development. I think just as a general trend, where we are now is that biotech companies look to the future, and they do not want to be research boutiques for the pharma industry. The trend we see at the moment, which I believe the pharma companies will accept and are accepting, is for co-development partnerships for products.
What is the difference between co-development and co-marketing?
Co-development is the work that you are doing to bring the product to the market, or to expand the label once it is approved the first time. So that's what we do to make the drug meet the regulatory requirements.
Co-marketing, some people believe, means that you have two products with two names. Co-promotion means you are both selling the same product with the same name. So you have a coordinated campaign rather than competing with each other.
Typically, under co-promotion deals you have an agreement about the profit share. So regardless of who actually manages to get the sales, there is an agreed upon approach to profit share ahead of time. You typically agree on a proportionate marketing budget.
How have the inner workings of pharma/biotech partnerships changed over the years?
Ten years ago, you would get a product, hopefully through some clinical development—product licensing, not technology—and the goal would be to hand that over to a pharma company that you would expect to do all the development work, pay all the costs, and give you a call when they were finished.
Now, there will still be partnerships like that. We have one sort of like that right now with Amgen. But again, because the financing capability for the industry changed dramatically in 2000, companies have been well enough financed—even if we do not see the levels of funding that we saw in those years—that they can take products a little further in the clinic.
And what they would like to do, because we know that we make more money if we sell products ourselves than if someone sells them and gives us a royalty, they'd like to start to build their own sales forces and learn the things they need to learn to be a company that functions like a fully integrated pharmaceutical company. That means that you might get into Phase II, or maybe you will get to the end of Phase II.
Genentech and Roche's collaboration for Tarceva (erlotinib) is an example of that. The two companies were getting ready for Phase III when they recognized a net partnership. And they each pay a portion of the development expenses. And shortly, I think, they will be promoting the product together.
Because of pharma's current pipeline crisis, companies are really relying on biotechs to find products. How has that affected the playing field?