GSK and Pfizer: Partnering Up?

The HIV-drug alliance between GlaxoSmithKline and Pfizer is getting a lot more play in the press than I thought it would. Deals between the big pharmaceutical outfits are not rare. Merck and Schering Plough teamed up for Vytorin, and Merck similarly joined Bristol-Myers Squibb on a (failed) diabetes drug a few years ago. J&J and Bayer are partnered on a Bayer anticoagulant drug, Schering-Plough and J&J split Remicade (an agreement which is complicating S-P's current merger plans), and Pfizer had teamed up with Warner-Lambert on Lipitor before they up and bought the whole company. There have also been several joint ventures over the years, such as Takeda-Abbott and Astra-Merck.
The unusual part of this deal is that it involves a whole therapeutic area. Most deals are either smaller or larger than that: a single drug, or the whole company. And that gets to the unusual part of the whole partnership - the way that it will involve early research. When companies partner on a single drug, it's mostly a marketing arrangement: you guys take Europe, we'll take North America. No research secrets are shared; the research has been done by then. And of course, when you buy another company or merge with them, there aren't any secrets left. But this middle ground, co-researching and developing drugs in one area, could be interesting.

You'd think that the process of drug discovery would be fairly standardized, but that's true only in a broad sense. Different companies have different assays that they've validated and are comfortable with, especially in the early phases of the process. (By the time you get to FDA-level clinical data, naturally, techniques do tend to converge). And there's the whole question of research cultures - companies do have different ones, with varying ideas about what's risky and what's not, how projects should be started and progressed, and how quickly it all should happen. Two large shops like Pfizer and GSK are likely, though, to be closer to each other's style than not. And HIV research is a pretty mature field, so the chances are smaller for a single company to have a big proprietary edge in drug development. (There's a one-sentence explanation for the whole deal, actually).

So I think this could work out, if both sides take it seriously. The structure looks like GSK has a lot more involved than Pfizer, though, so one of the things to watch will be how much effort Pfizer really puts into the new venture. Lip service is just as common a currency in the drug companies as it is anywhere else, and converts at the same exchange rates.

Derek Lowe blogs from inside the drug labs at In the Pipeline.

This article available online at:

http://www.theatlantic.com/business/archive/2009/04/gsk-and-pfizer-partnering-up/16299/