Collaborative compromise

Drug companies are famously competitive, but they’re willing to collaborate when it suits their interests. As with any business, the profit and loss ledger is the first place to look for the motivation behind these deals. Most of the time, they involve splitting the marketing rights for a late-stage drug. One company will come to the conclusion that its sales force can’t do everything that’s needed in some area of the world, so they team up with a company that has better coverage. Japanese companies have traditionally looked for such help in North America (and vice versa). 

In other cases, companies come to an agreement about two drugs that would work well together. When Schering-Plough discovered its cholesterol absorption inhibitor (Zetia, ezetimibe), it was clear that combining this with a cholesterol synthesis inhibitor (a statin) could be a potential winner. But the company had no statin of its own. Merck, however, had one (Zocor, simvastatin) that was about to run out of patent protection, and the opportunity to develop the combination (Vytorin) was born. (Of course, that arrangement has taken a number of odd turnings since, as the efficacy of the drug has unexpectedly been called into question, and Merck is now buying Schering-Plough!)

Collaborations that reach back into the earlier stages of development are less common between the larger companies. The big players all believe, or at least try to act as if they feel, that their internal research operations are sufficient for most of their own needs, so they’ll mainly do research-level deals for technology that they don’t have in-house. It’s somehow less dishonorable to have these things come from small companies. After all, these startups are in business to try unusual things and take risks, so buying from them (or just plain buying them) is no disgrace. But it looks strange for a large company to turn to another large company for research expertise that it’s supposed to have already.

There are exceptions. To pick one case, for many years, the huge chemical maker DuPont wanted to have a pharmaceutical division. They never could quite make a success of it on their own, and eventually formed a joint venture with Merck. In the end, that didn’t quite work either, which caused some people to comment that the real technology DuPont had been seeking was the ability to run a drug company. To be fair to DuPont, the record of industrial companies in the pharmaceutical space is very mixed indeed. 

A winning combination? 

Another deal-making exception is the recent decision by GlaxoSmithKline and Pfizer to form a new entity handling their HIV research. On the face of it, this is perhaps the most amicable agreement possible between the research divisions of two companies of that size. Part of that is due to the research area. It may sound strange to say this, but HIV therapy is a pretty mature field. There are a number of drugs out there, acting through several different mechanisms, some of which have gone through several generations of refinement. It’s by far the best-served antiviral field in all of medicine. And while there’s certainly a continuing medical need, it’s unlikely that the area will produce a blockbuster drug that one company would want to have all to itself. On the contrary: since combination therapies are the rule, the two companies probably hope to have multidrug regimens with every component under their own label. 

So will we see more of these Big Pharma collaborations? The best chances for them will probably be in fields that are already served by existing drugs, such as cardiovascular conditions and diabetes. Research efforts aimed at unserved markets, though, will probably be developed alone as much as possible - with any deal coming late in the process for the marketing reasons outlined earlier. But the costs of finding drugs continues to go up, and if the payoffs for finding them start to go down, companies could start banding together out of self-preservation. We’re already seeing this, but it’s in the form of outright mergers and takeovers rather than mere collaborations. 

There’s room to wonder about the world that we might be heading into. Drug research is hard enough, and surprises in it are numerous enough, that we may be best served by having as many avenues of research explored as possible. A long-term worry is that too much consolidation will affect the R&D diversity of the industry. Five separate companies are much more likely to be exploring different approaches as compared to one company that’s five times as large! 

Derek Lowe is a medicinal chemist working on preclinical drug discovery in the US