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Making Deals

Creating new, centralized research institutes close to hotbeds of academic and biotechnology prowess is one way pharmaceutical companies are strengthening their hold on the new biology. Another way is making deals.

Merck, for one, is making deals more aggressively than it ever has before, establishing beachheads in genomics, proteomics (the science and technology of cataloguing and describing the behavior of all the proteins encoded in a particular organism’s genome), and other forms of advanced bioscience. “From a pure numbers point of view,” explains Ben Shapiro, “our research budget is around $3 billion a year, so we do about 1 percent of the world’s biomedical research. That means, at the most simplistic level, that one hundred times as much [innovation] is going on outside of Merck as inside of Merck. Given that as a fact, what do you need to do? The answer is, we’ve got to look outside of Merck, voraciously, for other opportunities.”

Merck has stepped up its dealmaking in the past few years; the company executed 48 agreements in 2002, compared to only 10 in 1999. Perhaps the most prominent deal has been the half-billion-dollar acquisition of Rosetta Inpharmatics. Rosetta’s groundbreaking technology allows researchers to systematically analyze changes in “gene expression”-which genes are turned on or off-in the cells of both healthy and diseased tissue. The gene expression technology helps Merck researchers sharpen the focus of every step in the development of a new drug, from identifying potential toxicological problems to shaping the selection of patients for late-stage clinical trials.

A particular pattern of gene expression in cells exposed to a potential new drug molecule, for example, might give an indication that the molecule would ultimately be toxic in humans. “We realized that we didn’t need to do three-month animal safety studies to start sorting the sheep from the goats here,” Shapiro remarks. “We could in fact do cellular studies that would tell us quickly, by gene expressions, using Rosetta’s approach, to help sort through what might be toxic later.” If a gene expression pattern is associated with the progression of a disease, and researchers find that manipulating a particular drug target alters that pattern in a favorable way, it gives the researchers a strong indication that the target is a good one to aim for.

This past February, Merck also reached an agreement with Sunesis Pharmaceuticals, based in San Francisco, to develop a series of promising compounds for the treatment of Alzheimer’s disease. Using a proprietary technology called “tethering” that allows researchers to identify molecules that bind to a given drug target, Sunesis has found a number of small molecules that block the activity of an enzyme linked to one of the hallmarks of the disease-a buildup of biological gunk, known as amyloid plaques, in the brain. And Merck is getting not just the small molecules but broader rights to use the tethering technology, which it hopes will make drug discovery more efficient in other areas of research.

Shapiro says Merck is particularly interested in any technology that allows researchers to validate drug targets-that is, make clear that the targets they are aiming for play critical roles in diseases and their treatment. “If we could increase throughput here,” says Shapiro, “we’re going to be able to take more shots on goal and increase our probability of success.”

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Tagged: Biomedicine

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