The field of business development is growing and becoming more sophisticated. What new trends do you see developing?
Competition is ferocious, and prices are definitely going up. I especially notice the growing prices for preclinical deals.
We've also done two deals with Indian companies that have a very interesting structure. There's one with a company called
Advinus, which is in the metabolic field, and another with Nicholas Piramal India, which is in the oncology area. They have
low up-front payments; the deal is instead based on achievement of certain milestones. They're interested in doing those kind
of deals because the Indian companies have great chemistry expertise, and they're looking for more biology and clinical expertise.
Anything is possible. Look at the Big Pharma/Big Pharma deals. Bristol-Myers did a couple of those—one with Pfizer and one
with AstraZeneca. At the end of the day, we just have to be totally open when thinking about development and look at all the
Are there any big changes in licensing within Merck?
We're organized around six franchises: oncology, neuroscience, infectious disease and vaccines, respiratory/inflammation,
endocrine/other, and cardiovascular. We know we're going to play in these areas, and that's where we're going to be looking
for opportunities to complement the science we're doing. And we have a scientific leader and a marketing leader for each of
One area where we really have loosened up, if you want to put it that way, is Merck's willingness to do late-stage deals.
We were much more reluctant to do these in the past. The issue with later stage deals is there's more data—and many more opportunities
for the company to say, "I wouldn't have done it exactly this way or that way." The more information you have, the easier
it is to find a reason not to do a deal. But now we realize we have to take these opportunities for what they are.
With the increased competition for promising compounds, do smaller partners have a bigger say when it comes to development?
Obviously, the later stage a compound is, the more you're talking about co-development, because the licensor, to a certain
extent, has already developed the drug. Take the deal we did last year with Ariad for their oncology compound going into Phase
III. Ariad has done a tremendous amount of work, and they're the experts—they know the trials and results, and they have definite
feelings about what areas to go into, because this is a mechanism that could work on several different types of cancers.
If you're talking about a basic research deal, it's possible that the company's area of expertise really is basic research.
But to be flexible, you have to go with the expertise of the parties from both companies, and let them do what they do best.
You can't make the pitch, "We're from Big Pharma, we know it all, just hand it over to us." To be successful, we have to meet
as equals in the clinical space. Just look at Ariad: Harvey Berger, the founder, has been with the company for years—it's
his baby. He was looking for a real partnership.
How can companies conduct M&A and licensing more efficiently?
Big Pharma has the reputation of being slow and taking forever to make a decision. We've tried hard to ensure that's not true
at Merck. We can make decisions very fast—we've even shocked our biotech partners on several occasions by being ready before
For example, we did a basic research deal with Ambrx that took just six weeks from when we first met them. It was a new mechanism
in diabetes that doesn't have any clinical proof of concept. But Nancy Thornberry, who heads basic research in diabetes, had
her eye on this mechanism. It wasn't something that we ourselves were ready to invest in. But when we got to know Ambrx, and
we saw that they'd made progress and had good ideas about how to pursue this mechanism, it was a perfect opportunity to do
And then there's the other side of deals, which is that some take a very long time. But in the end, that's not really a reflection
on the deal.