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12:00 AM
 | 
Mar 23, 2009
 |  BioCentury  |  Strategy

Opt-in with upside

Deal-makers have been known to look askance when a biotech company provides a pharma company with opt-in rights to an in-licensed compound. According to the skeptics, the biotech adds value to the compound while the big company gets to keep the R&D off its P&L before scooping up the project once substantial risk has been removed.

In these cases, the question is what the biotech has left over at the end of the day. Amendments to a pair of deals between Roche and Evotec AG and Synosia Therapeutics AG demonstrate how the opt-in structure can leave upside for the junior partners.

While Roche moved compounds forward that may not have been further developed internally, the biotechs were able to get rights to multiple compounds, potential non-dilutive cash to apply to other programs, or both.

Under the amended Evotec deal announced this month, Roche gained a buy-back option to EVT 101 for a new indication: treatment-resistant depression (TRD). Under the original 2004 deal, the biotech's Evotec Neurosciences GmbH subsidiary in-licensed the EVT 100 family of NMDA receptor NR2B subtype (GRIN2B) antagonists from Roche to treat Alzheimer's disease (AD), neuropathic pain and Parkinson's disease (PD). The pharma had a buy-back option for EVT 101 and its follow-ons, but only for those indications (see BioCentury, April 5, 2004).

The deal was orchestrated by John Kemp, now Evotec's chief R&D officer and then CEO of...

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