To bolster R&D even further, Serono entered into two significant deals in 2004, one with ZymoGenetics, valued at $81.5 million,
and the other with Micromet, potentially valued at $148 million. The partnership with ZymoGenetics will develop and commercialize
novel protein and antibody therapeutics based on ZG's discoveries, and it gives Serono exclusive worldwide rights to fibroblast
growth factor 18 and interleukin receptor 22, both still in early development.
About the alliance, Steve Arkinstall, head of worldwide discovery for Serono, says, "ZymoGenetics is a company with which
we already had an established and highly successful collaboration. When scouting for new high-value alliances, we looked again
to ZymoGenetics and were struck by the depth of biological and disease understanding it had accumulated around these new proteins.
We are optimistic about the therapeutic promise these molecules bring to our development pipeline."
At the end of 2004, Serono entered into a deal with Micromet, which will boost its portfolio of novel anticancer agents. Under
the agreement, Micromet will complete ongoing Phase II clinical trials of MT201, a pan-carcinoma monoclonal antibody that
is being tested for the treatment of prostate and metastatic breast cancer. When the Phase II trials are over, Serono will
be responsible for the further development and commercialization of the product.
"We are very excited about the therapeutic potential of MT201 in cancer," says Arkinstall. "This fully human antibody targets
a cell surface glycoprotein found on the majority of epithelial-derived tumor types. Binding of MT201 triggers activation
of the body's immune system to destroy cancer cells, offering promise of a highly effective, unique targeted therapy with
activity in many cancer types."
Serono is also building a broad understanding of genetics. In 2002, the company acquired Genset, which has since evolved into
Serono Genetics Institute.
Serono is well positioned with what it calls its "war chest" to continue to make such deals or even to purchase another company.
"On our balance sheet, we had $2.2 billion in liquid financial assets at the end of the third quarter last year," says Grant.
"We consider that a resource to help us develop growth externally. So the key question will be: How do we use that asset to
grow our business? We will continue to collaborate with the right partners, to develop our existing franchises, and open other
franchises. Acquisitions are also an option."
For Serono, the future—the "bigger picture"—according to Firouz, centers on how to expand its presence in the United States.
But before the biotech can focus on that issue, Firouz says it must first meet its immediate goals: "operational excellence
and market leadership in each of our therapeutic areas."
As Serono builds its presence in the United States, the company considers itself unique among its peers. Firouz explains why:
"After discovery and preclinical, many biotech companies outsource pieces of business, including development, scale-up, and
sales. We are totally beyond that. We drive all our own critical projects."
He also believes Serono is the only true global biotech. "Serono has 40 subsidiaries," Firouz says. "We are present in Latin
America, China, and emerging markets. Other major biotech players don't have that presence." As medicine moves more and more
to biological drugs, and countries such as China become major market forces, Serono's long-term global presence may give it
a critical advantage.