Merck is actively looking to enhance its portofolio of new technology and molecules by increasng activity with biotech firms in UK, Europe and presumably throughout the world. As reported in Pharma Times,
Merck's Margaret Beer, head of licensing and external research in Europe said the Company is "still very much in the market for partnerships". Merck is not just interested in post-phase II molecules either - "We will partner very, very early" said Beer. Merck is a bigger company post-acquisition of Schering-Plough and as such is looking for means to be "faster, better and cheaper."
Dr. Beer urged biotech companies to approach Merck with licensing ideas - although those that have the potential to be first-in class and have solid IP potential are preferred. No kidding!
Dr Beer stressed partnerships are vital to the firm's ongoing success. Merck looks at over 7000 deals per year and last year 63% of Merck's revenue derived from alliance products and patents.
The deal making portion of Merck's strategy is consistent with what other big companies have announced they plan to do as well - e.g. AstraZeneca and Sanofi-Aventis have shifted their attention to the outside. Morgan Stanley issued a report earlier this year that stated over 1/3 of Pharma R&D spending was in pre-phase II where the probability of reaching the market was less than 10%. Their analysis concluded that any project before phase II that had less than a 30% chance of making it to the market - would likley be bested by a following an external research model when considering risk.
Merck seems to be raising the ante a bit by announcing its intention to pursue many small and mid-sized deals, and in particular in expressing a willingness to cut deals for early phase - maybe even pre-clinical (?) projects - as long as the promise of faster, better, cheaper is a realistic possibility. Since the supply of the number of good projects available for licensing is likely to be outstripped by demand - this willingness to take more early stage risks could be an advantage that will tip the scales. Assuming, Merck can both pick the right projects and close them more quickly than its rivals.
Posted by Bruce Lehr March 29th 2010.