• WisBusiness

Friday, September 10, 2010

Major pharmaceutical firms showing more interest in Wisconsin research


By Tom Still
The chances are pretty good you’ve never heard of Teva Pharmaceutical Industries Ltd., unless you read the fine-print labels on your prescription drug bottles a lot more closely than most people.

If you’re a biotech researcher at one of the state’s colleges or universities, however, or you’re building a fledgling drug development company in Wisconsin, the name Teva may mean something: a potential market for your discoveries.

An upcoming visit to Wisconsin by representatives of Teva, one of the world’s 20 largest pharmaceutical firms, is the latest example of a trend within “Big Pharma” to shop for promising drugs far outside its own laboratories – in the labs of innovative start-up companies.

It’s a trend that generally bodes well for Wisconsin, which is among 15 or so states with significant R&D around biotechnology drugs. That’s because offer opportunities for researchers and young companies here to license their discoveries to companies that have the size and experience to bring those ideas to market.

Big Pharma has a big problem. Its internal development pipelines for new drugs have dried up just as patents are expiring on some of their blockbuster drugs. The industry’s biggest companies need fresh ideas before some of their biggest money-makers can be produced by competitors as cheaper generics.

Those companies can replenish their pipelines in several ways. They can acquire small to medium-sized biotech companies that have innovative ideas in the lab but which lack the cash and the corporate expertise to bring them to market. That trend began a few years ago and continued through the recession. A second is to acquire other pharmaceutical companies with portfolios not due for patent expiration, or with drugs on the verge of hitting the consumer markets. That’s been largely limited to larger pharmaceutical firms.

A third is to license early stage compounds from small biotech companies and academic institutions, leaving those companies and researchers free to pursue other projects – or to work more directly with the licensing firm.

That’s why representatives of Teva will scout Wisconsin’s biotech industry in mid-October and to meet with selected companies that must submit executive summaries by Sept. 15. Teva, which operates in 50 countries and had $14 billion in sales in 2009, is known largely for its generics. But its “innovative ventures” division develops new compounds, particularly in areas such as oncology (cancer), neurology and autoimmune/inflammatory diseases.

This isn’t the first such visit by a major pharmaceutical company to Wisconsin – and likely not the last. Pfizer and Eli Lilly have kicked a few biotech tires of their own in Wisconsin, and other companies are planning scouting trips in the coming months.

These exercises have been organized through the Wisconsin Department of Commerce with the help of key industry groups in Wisconsin. They are often rooted in meetings that take place in international conferences, such as BIO International, between industry representatives and state officials – including the governor.

For Wisconsin’s biotech and drug development companies, Big Pharma’s hunt for compounds offers both opportunity and danger. The opportunity comes from being a young drug company with a biotech or chemical compound that can fill a market niche. The danger comes from being acquired as a fire-sale price or compelled to move outside the state. While some Wisconsin biotech firms have been purchased and moved, others have been acquired and stayed – including Roche Mirus, Roche NimbleGen and Hologic-Third Wave, all in Madison.

Although is still produces only a fraction of the world’s drug development start-ups, Wisconsin is becoming a bigger blip on Big Pharma’s radar screen. That’s important because those major companies can provide capital, expertise and sales channels that otherwise aren’t easily found in Wisconsin. The maturation of Wisconsin’s drug-development industry may mean the loss of some start-up companies, but it will keep many more of the state’s most promising firms at home and producing jobs.

-- Still is president of the Wisconsin Technology Council. Companies interested in making a presentation to Teva Pharmaceutical Industries should visit http://www.commerce.wi.gov and click on the “Teva matchmaking” icon on the right-hand side of the page. Executive summaries are due by Sept. 15.

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