Big biotech Biogen Idec Inc. and Protein Design Labs Inc. this week cut a
licensing deal so extensive and equitable, it almost looks like a joint
venture.
Compared to a high profile merger, the numbers were small: Biogen pays PDL
$140 million in cash and equity with potentially $660 million more in
milestone payments, all to share rights to two autoimmune drugs and one
cancer drug, all in Phase 2 of clinical trials and several years from
market. But it illustrates how licensing drives growth in the industry as
much as M&A.
With such an extensive collaboration -- license deals rarely go beyond one
drug -- Biogen refocuses on the goal to stock half its drug pipeline with
in-licensed products by the end of the decade. In fact, that was a main
reason for the $6.8 billion bicoastal merger that created Biogen Idec in
late 2003. The deal also shows how small but powerful biotechs such as PDL
can stay independent and keep some control over their products. In this
case, it's a 50/50 split of development costs and profits. That's remarkable
parity between a $14 billion company with a track record of blockbuster
drugs and a $3 billion company that's never brought a drug to market. — Alex Lash
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