W W W . C E N - 0 N L I N E . O R G C&EN / JANUARY 9, 2006 7

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P H A R M A C E U T I C A L S

DRUG MAJORS PUSH INTO BIOTECHNOLOGY Wyeth, AstraZeneca carry their run on collaborations into the new year

B IG PHARMA'S PUSH INTO BIO-technology continued in the first week of 2006 with

Wyeth and AstraZeneca each an­nouncing a third deal with a bio-tech firm in as many weeks.

Wyeth, which recently signed deals with Progenies and Ex-elixis (C&EN, Jan. 2, page 12), announced a collaboration with Trubion Pharmaceuticals over inflammatory disease and cancer therapies. AstraZeneca, having just announced agreements to acquire KuDOS Pharmaceuti­cals and to develop a drug with AtheroGenics, agreed last week to work with Targacept on a com­pound in Phase II clinical trials for treating Alzheimer's disease and schizophrenia.

"The flurry of activity at com­panies such as Wyeth and Astra­Zeneca reinforces what we have seen all last year," says Peter Win­ter, director of communications at Burrill & Co., a venture-capital firm that specializes in biotechnol­ogy. He says drug companies are pursuing deals to advance their pipeline or strengthen programs for novel therapies. "What bio-tech has, pharma needs, and it is willing to pay a premium to access this innovation."

Under the terms of its new col­laboration, Wyeth will work with Trubion to develop and commer­cialize the latter's CD20-targeted compounds, including TRU-015, a candidate in Phase II trials for rheumatoid arthritis. Trubion will receive an initial $40 million pay­ment and milestones that could exceed $800 million, excluding royalties.

AstraZeneca's deal with Tar­gacept entails an exclusive global

licensing and research pact for the development and commercializa­tion of Targacept's Phase II com­pound, TC-1734. Targacept will receive an initial payment of $10 million and could receive mile­stone payments up to $300 million plus royalties.

Wyeth, which bills itself as the world's fourth-largest biotech company, last year opened a $2.1 billion research and manufactur­ing operation in Grange Castle, Ireland, and a process development facility in Andover, Mass. With a target of 25% of its revenue in 2006 coming from biopharma-based products, Wyeth will now focus on deals and partnerships to expand its business, according to Cavan Redmond, executive vice president of the firm's biopharma-ceuticals business.

"We are looking for the next generation of proteins or antibod­ies that would allow us to have unique discovery targets and en­able us to go after the market to meet unmet needs in a new way," Redmond says. "That's where Trubion fits in." He notes that the agreement with Trubion gives Wyeth access to the biotech firm's small modular immunopharma-ceutical technology, an alternative to monoclonal and recombinant antibodies.

AstraZeneca's newly appointed CEO, David Brennan, has stated that the company will actively pursue collaborations and acqui­sitions. The recent deals support existing businesses in the areas of neuroscience, cancer, and cardio­vascular therapies, according to a company spokeswoman.

Burrill's Winter expects the drug sector's run of biotechnol­ogy deals to continue this year. "The unfolding story is pharma's willingness to partner earlier with biotechs," he says. "The reason for this is that deal making has become much more competitive as companies jockey for best-of-breed technologies and compa-_ . ! - » - , " r t i / M / k jit ii i I K I

E N E R G Y I N E U R O P E

Natural Gas Dispute Is Settled, But Questions Remain

E nergy officials from Russia and Ukraine on Jan. 4- settled a dispute that had prompted Russia's largest natural gas supplier, Gaz­

prom, to shut off shipments of fuel to Ukraine. The dispute certainly disrupted the supply of

natural gas in Ukraine. It also caused serious shortages in countries in Central and Western Europe because pipelines carrying natural gas to those areas traverse Ukraine. Although the dis­ruption was short-lived, it has caused a spate of European rethinking about the security of the en­ergy supply.

Russia supplies a quarter of Western Eu­rope's natural gas, and 80% of that supply travels through the Ukrainian pipeline. Other pipelines serve the region as well; a new one, scheduled for 2010, will be built jointly by Gazprom, which is controlled by the Russian government, and

Wintershall, the oil and gas subsidiary of BASF. At the heart of the Ukrainian dispute was

Gazprom's decision to more than quadruple its price to the former Soviet Union member. The move was widely seen as a decision by Russian President Vladimir Putin to punish the West-leaning Ukrainian government, although Gaz­prom officials insisted the change was to bring the gas price to global levels. The price would have risen to $230 per 1,000 m3 from $50.

Other Russian allies, including Belarus, contin­ue to pay at the low level. Even the Baltic countries Latvia, Lithuania, and Estonia—former U.S.S.R. member countries but now members of the Eu­ropean Union—are charged $110 per 1,000 m3. In the new agreement, Ukraine will pay $95 per 1,000 m3. In addition, Gazprom will pay more to ship gas through Ukrainian pipelines.—PATRICIA SHORT