German pharmaceuticals and chemicals group Bayer has linked up withCuraGen of the USA in a genomics R&D partnership which could be worth up to $1.5 billion over 15 years. The collaboration, which is still subject to approval under antitrust regulations, is thought to be the largest between a pharmaceutical multinational and a biotechnology company, and lifted CuraGen's share price by a hefty $35% to close at $35.88 on the day of the announcement (January 16).
This is the latest in a series of collaborations, featuring companies such as LION Bioscience and Millennium Pharmaceuticals, which Bayer has undertaken to bolster the productiveness of its product pipeline (Marketletters passim). The deal with CuraGen is by far the largest, however, and could lead to Bayer investing $875 million, not far short of the total amount it has ear-marked for all its earlier deals over the last few years. Furthermore, the collaboration is unique as it is based on a broad risk-sharing structure leading to profit-sharing between the firms, rather than the more conventional milestone payment and royalty-bearing model.
Wolfgang Hartwig, executive vice president of pharmaceutical research at Bayer, said that the company now has the leading experts wordwide in the process of identifying gene-based disease targets through to bringing genomics-based products to market. Specifically, CuraGen brings toxicogenomic and pharmacogenomic expertise, two disciplines which were missing at Bayer prior to the collaboration.
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