Lilly is committing up to $1.8 B to partner with Pfizer on the development of tanezumab for pain-relief. The deal was announced months ago but the particulars just emerged in Lilly's Q3 filing. This is another instance where Lilly is going after a really big therapeutic application (e.g. Alzheimers) that is fraught with risk but also offer a potential big reward. Of course it is in a potentially very large market with a big medical need.
This sharing of development and clinical trial costs is likely to emerge as another model whereby big pharma can layoff risk with one another. Yeah, they have to share the reward but the rewards are very BIG and help outweigh the sharing, and the risk is also high and the sharing cuts ameliorates the big costs of potential failure -- which aren't trivial or even unlikely. In for a penny, in for a pound. No guts. No glory really apply here. But failure doesn't help ones stock price at all -- and both Lilly and Pfizer have had their share of late stage blow ups in recent years. See Fierce Biotech.
Posted by Bruce Lehr Nov 6th 2013.