Posted on December 9, 2008 by BioJobBlogger

Merck's Surprising Announcement: "We Will Develop Follow-On Biologics"

At its annual business briefing, Merck’s CEO, Richard Clark, announced that the company is creating a new division called BioVentures that will develop and sell follow on biologics. Clark said that the reason for this surprising decision was based on “the arrival of the Obama administration and renewed enthusiasm on Capitol Hill for legislation that could create an easier path for generic biotech medicines.”

Merck’s new BioVentures division will be built around the humanized yeast manufacturing platform developed by Glycofi, a privately-held, company that Merck acquired two years ago. While most of big pharma and big biotech publicly lobbied against new legislation that would make follow-on biologics legal in the US, Merck was surprisingly low key on the subject (now, we know why).

I first learned about Glycofi’s technology platform shortly after the company was formed in the early 2000 and immediately recognized its implication for follow-on biologics manufacturers. I immediately contacted Glycofi’s CEO at the time to see whether or not they would hire me as a “follow-on biologics consultant.” Sadly, because cash was tight (as it always is at start ups) I didn’t get the gig but I did get to know Tillman Gerngross, one of the Glycofi’s founders and its Chief Scientific Officer. Tillman and I spent some down time together at many of the follow-on biologics conferences that I organized where he was an invited speaker.

I was glad (mostly for Tillman) when I learned that Merck was going to by Glycofi for $400 million in cash. That said, the acquisition didn’t make sense to me at the time because Merck didn’t have a biologics division (although it did have a successful vaccine division).  After today’s announcement, Merck’s decision to purchase Glycofi makes perfect scientific and financial sense to me. I wish I could have gotten a piece of Glycofi before Merck bought the company. Nevertheless, I take solace in the fact that I, like Merck’s executives, can recognize a winning technology when I see one!

Maybe Merck will turn itself around after all!

Until next time…

 

Good Luck and Good Job Hunting!!!!!!!

 

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Posted on December 9, 2007 by BioJobBlogger

Merck's Quiet Buying and Deal-Making Spree

Let me say from the outset that I have always been a big Merck fan (not withstanding the Vioxx scandal). Many people who I went to graduate school with in the late 1970s at the University Of Wisconsin Department of Bacteriology wound up getting jobs at Merck (more than 15 at last count). It goes without saying that there is a world of difference between Madison (“yeah, baby”) and Rahway NJ but, nevertheless, there has been a long standing relationship between UW and Merck dating back to the 1960s– I guess good science begets good science! That said, Merck showed the world with the Vioxx debacle that even one the best and most respected pharmaceutical companies is fallible and can make mistakes when it loses sight of what earned it its reputation in the first place–good science and better drugs.

Merck is well on its way to recovery and it desperately wants to regain its former reputation as an innovative pharmaceutical company. Rather than attempt to accomplish this through internal organic growth, Merck has embarked on a global search to find innovation and then, either make a deal or simply buy it! Since 2004, Merck has done about 140 deals. Merck’ has continued this torrid pace and inked 53 or so deals in 2006 with various biotech and specialty pharmaceutical companies. The company plans to extend this deal-making spree into 2008 (as long as it continues to settle Vioxx court cases and its stock price remains high). Here is something of a “highlight film” of the acquisitions and deals that Merck closed in 2006.

Glycofi-New Hampshire, ($400 million); Merck acquired this innovative company founded by my colleague Tillman Gerngross (very smart guy) that developed a novel and unique humanized yeast platform to manufacture biopharmaceuticals.

Addex Pharmaceuticals-Switzerland ($109 million plus a possible $61 million in royalty payments); develops new novel drugs to treat Parkinson’s disease.

GTx-Tennessee, ($40 million up front, plus a $30 million equity investment, possibly up to $15 million in supplemental research funding and up to $422 million in royalty payments). Merck was interested in the company’s lead candidate, a treatment for muscle loss in cancer patients. Also, Merck is investing in the company’s selective androgen receptor modulator program which it hopes can be used to treat a range of musculoskeletal disorders.

Ariad Pharmaceuticals-Massachusetts, ($75 million upfront, with a potential for a much as $925 million more). Merck is interested in one of Ariad’s lead kinase inhibitor candidates that may be used to treat a variety of cancers.

Avalon Pharmaceuticals-Maryland, ($200 million up front plus milestone and potential royalty payments). Both companies will participate in a research collaboration to develop new drugs against undisclosed cancer targets.

Idera Pharmaceuticals-Massachusetts, ($30 million upfront with a potential for up to another $425 million contingent upon research results from of two-year long research collaboration. Idera is working on toll-like receptor agonists which may be useful to develop vaccines against bacterial and fungal disease as well as Alzheimer’s disease. If anything comes out of the collaboration, the deal gives Merck exclusive rights to the discoveries.

Although Merck’s strategy is not a unique one (everyone seems to be doing it), they once again have outstanding scientists and executives running the company who can recognize good science when they find it!

Until next time….

Good Luck and Good Job Hunting (give Merck a call)!!!!!!!

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