Early bird deal

Amid the clamor about pharmaceutical companies scouring under rocks to find late-stage products, it's also been increasingly clear that they haven't abandoned early stage deals as the Phase III cupboard gets bare.

Of the 52 deals done with pharma or big biotech from the beginning of 2003 through the end of last month, for which terms are available, only a quarter have involved products in Phase II and beyond, while 29 have been at the preclinical or discovery stage, with some of these early stage deals sporting terms rivaling the potential value of some later stage deals (see "Partnering Metrics," A6).

But simply benchmarking deal terms provides little guidance for young companies that want to know how to get good deals for their early stage products. According to some of the recent dealmakers, the keys have been to do the kind of R&D that gives the partner confidence in the scientific package, and, although it sounds obvious, looking for the best fit in terms of mutual needs and capabilities.

Looking at how these themes played out in seven recent early stage deals shows the variety of ways in which companies enhanced their prospects by providing data packages that highlighted the advantages of their compounds compared to others. Successful companies also did the homework that alleviated potential worries about negative data, and took advantage of external validation of related compounds or technologies. As a result, they were able to negotiate deals that met their own development or financial goals.

Sunesis: Validate first

The earlier stage the deal, the less data will be required by big pharma. But it would be wrong to think that discovery deals these days are made more on promises than on validated technical innovation. To whet the appetite of potential partners, Sunesis Pharmaceuticals Inc. validated its technology by creating

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