Monday, June 26, 2000
Toolkit companies have spent the past several years peddling their wares to potential customers in big pharma and big biotech. And the big companies have been biting - adding a functional genomics tool here, a high throughput screening capability there, a bit of array technology, a few model systems and so on. But virtually none of these tools are designed to be easily integrated with each other - a problem that is likely to become increasingly apparent as companies try to use all their toys in a coherent manner.
One solution is exemplified by last Friday's mega-deal between Millennium Pharmaceuticals Inc. and Aventis Pharma (Frankfurt, Germany), the pharmaceutical arm of Aventis S.A. (AVE). Faced with the lack of integration of its own toolkit pieces, Aventis decided it was willing to pay nearly a half-billion dollars to access MLNM's already-integrated platform. For MLNM (Cambridge, Mass.), the deal illustrates the value of its efforts to integrate discovery technologies, a resource it can sell multiple times in order to finance its plans to develop and sell drugs.
In a nutshell, the deal includes the non-exclusive transfer of MLNM's technology platform to AVE in exchange for payments of up to $200 million over five years; joint technology development; and joint development of an inflammation franchise. AVE also will buy $250 million of MLNM stock.
With myriad pieces of technology available, the key going forward will be integrating the pieces into a whole with actual utility in drug development. "The analogy is that you can have this or that instrument, but that doesn't give you an orchestra that knows how to play as an orchestra," said Steven Holtzman, chief business officer at MLNM. "This deal is a recognition of that. We're not a technology company, but we are an integrator of technology."