feature B2 and ableto ink creative deals with pharma companies. over thepast few years have helped platform biotechs remain independent A trend toward outsourcing early-stage markets R&D and thrivingcapital pharma’s creative side out bring Platform biotechs in recent years. to mergers andacquisitions for platform biotechs have emerged access andcoveted property, intellectual fundamental obstacles nies. Although some acquisitionscontinueto bedriven by platform gaps, will become more eager to buy biotech and products compa buyers, pharma withtheirgrowthto earth, imperatives andpipeline years ago. and even (RNAi)companiesasrecently RNA interference as5or6 antibody technologies, alternative scaffold antibody-like companies probably have to existed buyAdimab. tried for markets brisk Indeed, sive dealto accessitstechnology, companieswould somepharma antibody programs. Ten years ago, instead ofsigning anonexclu companies,biotech andpharma amountingto about130active withmajorat more than$1billion andhasdozens ofpartnerships million in2006.Adimab andindependent,isvalued isstillprivate ing yeast-based antibodies, whichwassoldto Merck &Co. for $400 Before launchingAdimab hebuiltGlycoFi, acompany manufactur inasimilarway.”is maturing to others.they’re goodatandleave AndIthinkourindustry otherparts there’s agoodreason for that. thing focusThey ontheparticular company Adimab.ery “Airlines don’t buildtheirown airplanes, and said Tillman Gerngross, cofounder andCEOoftheantibodydiscov muchmore efficient,”ing to own it.Andithasmadeourindustry where you canaccessthestuffyou needfrom otherswithouthav or outsourcingand much of that is through models dealmaking now is as tomuch of right R&D as possible, externalize tendency “The R&D Externalizing platform deals. lucrativeare andcreative amongavanguard ofbiotechs striking receptor (CAR)-modified T cells (CAR-Ts) and mRNA therapeutics pursuing groundbreaking technologies antigen such as chimeric platforms. Companiesnies accessto potentially game-changing tions—while finding innovative ways to grant compa pharma potentially muchhighervalua inthegame—at with more skin them inhouse. than crushingthemwithaninstitutionalembraceorreinventing betterthat they’re often offbuyingthefruitsofthosetechnologies same time, have large companies alike realized and small biopharma capital as independent entities, obviating the need to sell out. At the But inrecent years, platform biotechs have enjoyed easieraccessto Pharma companies were oncevoracious acquirers oftechnologies. Morrison Chris Conventional wisdom holds that as biotech back valuations drift aside, GerngrossArguments quality would aboutairline know. As aresult, platform have biotechs andtheirbackers wound up |September 2016| biopharmadealmakers.nature.com ------tions ofplatform biotechs didn’t outfor work buyers, thepharma company isoflimited use… internalized therest ofthe leading assets, andonce they’re receptor agonists for neurological diseases. 2016to accessthebiotech’sbillion) inApril ofmuscarinic portfolio paid $125 million up front (with potential milestones exceeding $3 notably, companiessinceitsacquisition.Most and pharma Allergan withahandfulofbiotech Heptares partnerships hassigned discovery fact, largelycompanies left to acquisition. In itsown after devices potential milestone payments. Heptares isoneoftherare platform coupled receptors in2015,for $180millionplus$220in drugdesign platformHeptares for anditsstructure-based G-protein- huge organizational bought structures. asmallbiopharma, Sosei, addingthat sion ofSosei, bigger,” agreed Malcolm Weir, CEOofHeptares Therapeutics, adivi products,” shesaid. theirnecksoutto championtechnologies or ofsticking get wary get boggeddown incommittees andprocesses, “and peoplejust andproducts, thatbeliefcan companies withcompetingpriorities CAR-T candidates aswell as candidates. larger T cell receptor In (TCR) T celltherapeuticscompany Pharma, whichhasapipelineof Kite ofbusinessdevelopment atthe EVP ful products, saidHelenKim, capital to drive [novel technologies] alltheway through” to success believers inthesetechnologies withenoughenergy andclout smothers its potential.often really people who are does take “It plus milestones in 2014. Pharma’s technology embrace of new too by sellingwhatremained to Alnylam ofSirna for just$175million thisyear andgotoutofRNAialtogether research earlier headquarters smaller thanhoped:thecompany closed down theoriginal GlycoFi GlycoFi. ofbothacquisitionsappearsto haveThe impact beenmuch Sirna Therapeutics for $1.1billionin2006,thesameyear itbought similar scenarios. For example, Merck boughttheRNAicompany and thosecompanies’ have institutionalmemories ledthemto avoid One bighurdle isthatprevious—and expensive—acquisi often “Big pharma companies are just that: they’re very big and getting bigandgetting companiesare“Big pharma justthat:they’re very “ Malcolm Weir,Heptares Therapeutics CEO acquired for oneortwo You tend to get

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peshkov/iStock/Thinkstock work inproductdevelopment.work nology platform while enabling their own inthepromise ofabroad to participate techefforts for cancerimmunotherapy technology platforms atarm’s length,dealsaround CAR-T platforms As companies have pharma grown promising keeping comfortable creative Getting theplatform’swithout interrupting development progress. to individualproducts ordiseaseareas ratherthantheplatform itself, geese’ through structures corporate thatallow valueto beascribed developers have successfullymonetizedasset-centric their ‘golden platform, and other drug candidates with a computational chemistry Apollo). which Nimbus, discovers (Nimbus wholly owned subsidiary the $400millionupfront asanacquisitionofa dealwasstructured candidate forincluding aphase-2-ready nonalcoholicsteatohepatitis, acquired Nimbus Therapeutics’ inhibitors, carboxylase acetyl-CoA candidates are nested asindividualcompanies. When GileadSciences have created LLC umbrella structures under which individual drug of its core technology. Several companies with platform technologies companies to pursue different portfolio multiple internal applications accordingly. hascreated The mRNAtherapeuticspioneerModerna a platform represents. whose potential overshadows themyriad unpursuedopportunities have matured drugcandidates to thepointofspawning late-stage platform buyouts to are occuronlywhentechnologies most likely ogy, seevalueonlyinproducts. As typically butpharmas aresult, Biotechs with ‘next bigthing’ valueto platforms thetechnol ascribe tricky. isnotoriously (especiallyon terms insuchvolatile markets) of adeal’s possiblevaluecanbetied upinearn-outs. product candidates aswell, butfor platforms, agreater percentage control ofanasset’s future development happenswithindividual sions that can effectively scupperyour program,” hesaid. Loss of better comesalong;itisalsoabout “failure, butfromdeci portfolio eitherbecausethetechnology failsorbecausesomething attrition, succeeds inside a large organization isn’t only about technological is always in question, said Weir. Whether a platform technology At alarge company, commitmentto thelong-term any decision Valuation dilemmas partner.” the rest of the company is of limited use in the eyes of the pharma acquired for leadingassets, oneortwo andoncethey’re internalized atthepharma,”egory said Weir, you getacquired“when you tend to get existing portfolio. “Unless you are from and don’t Mars fit into any cat platform companiesistechnological orassetoverlap withtheacquirer’s relatively didnothave. smallSosei Oneoftheproblems for acquired the engine—which being acquired specificallyasadrugdiscovery Platform purveyors havePlatform to structure theircompanies learned purveyors Valuing thanscience, platform andagreeing companiesismore art madeanidealfitforSosei Heptares, said Weir, because thelatter was

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kstock underscore bigcompanies’ - - - - of itsprograms, getsaccessto Amgen’s similarly andKite oncology the bigbiotech accessto Kite’s platform withoutownership over any it capsthepotential valueofyour company.” she said. you encumberyour“If leadprograms orthetech platforms, maximum value,” those deals’‘validation canbecounterproductive, positions. “Ultimately, if a company’s vision and strategy is to create boom haverecent biotech beenableto market bargain from strong competitor Juno Therapeutics, thathappenedto emerge the during happen, shesaid, butsomepromising companies, and suchasKite nondilutive financing,” ofthosedeals still Plenty said Helen Kim. stage development andcommercial capabilitiesbutalsoto access to accesslater- partly withapharma, creating astrategic partnership with apharma creating astrategic partnership validation oftheirplatforms by By the endofthedeal’sBy 10-year Celgene’s term, couldbeashigh stake ~100% premium to the company’s share at the time of the deal. price inJuno(10%ofthecompany), whichwasboughtata stake equity Celgene’s upfront payment of$1 billionincludedan$850million development options on each other’sand co-promotion pipelines. andbothsidesreceive America, otherco- candidates outsideNorth model, to asCelgene develop gainsrights Juno’s CARand TCR laboration appears to be based onthesuccessfulRoche/Genentech independence for theforeseeable future. The companies’ 10-year col panies closelytogether, butitalso, paradoxically, ensures Juno’s developing,” saidHelenKim. get accessto CAR-Ts, butthelicenseisonlyfor thetargets they’re reimbursed for R&Dcosts. early-stage getaccessto targets,“We they way, received and Kite a $60 million upfront payment and will be tohanding it off to $525 million—flow Amgen. Milestones—up each through willtake investigationalKite drug(IND)filingbefore new grants Amgenalicenseto Kite’s CAR-T technology platform, which developing asourown products,” saidKite’s Meanwhile, thedeal Kim. numberoftargets from Amgenthatwe hasacertain arethat Kite pathway andtarget expertise. so collaborationwasstructured “The Helen Kim, EVP of business development,Helen Kim, EVP Kite Pharma Kite’s 2015,gives strategic inJanuary alliancewithAmgen,inked usedto bethat biotechs neededvalidationoftheirplatforms by “It Juno’s flagship deal with Celgene in June 2015 may tie the com “ biotechs needed usedto bethatIt as 30%,butthecompany hasagreed to limits company. over to take the ortrying on sellingitsstake biopharmadealmakers.nature.com |September 2016 | - - B3 B3

feature feature B4 around andanticipate potentially whatnew thecorner disruptive are infront ofus.”what opportunities inquestionand “But we willalsotailorfuture dealsto thepartner with a collaborator that is incredibly deepinaspecific disease area. deal, saidModerna’s where apartnership thecompany Kim, strikes opportunities” doingsingle-product willkeep “We the like Vertex regulator fibrosis transmembraneconductance protein.the cystic apy, which coaxes cells in the lung to producecopies of functioning Pharmaceuticals, isalsoitsmostnarrow, covering onlyasinglether moot, hesaid. ship, need to own technology a discussion of whether partners is place.” bothsides are needoutofapartner gettingwhatthey If to commercialget the right our and partners economics rights in that we’re willingto dealfor structure theright ourselves andfor gies to enableproducts increative ways,” hesaid. “We’ve shown to tapinto withthisability ourtechnolo present ourpartners “We technologies new commitment to turning into drugsfor patients. negotiationsreflects asharedness to getcreative inpartnership Moderna Therapeutics, pointed outthatbothcompanies’ willing and AstraZenecaModerna, hasmade two. Lorence CFOat Kim, viral vaccinesandrare diseases. three Merck hasinked dealswith mRNA therapeuticsplatform inareas includingimmuno-oncology, have hundreds ofmillionsdollarsto staked accessthecompany’s therapeutic spaces *Deals includedupto *Deals theendofJuly2016. Table 1:Selected 2013 March 2014 January 2014 October 2015 January 2015 February 2016 January 2016 January June 2016 July 2016 Date Those opportunities are by driven pharmas’Those opportunities attempts to “look Moderna’s most recent fibrosis deal, specialist with the cystic Vertex Moderna has been an active partner across abroad swathof partner hasbeenanactive Moderna |September 2016| as MSDoutsidethe Merck &Co. (known AstraZeneca Canada) United States and as MSDoutsidethe Merck &Co. (known Pharmaceuticals Vertex company Partnering AstraZeneca Pharmaceuticals Alexion Hospital and Karolinksa Institutet Karolinska Canada) United States and as MSDoutsidethe Merck &Co. (known PasteurInstitut Canada) United States and biopharmadealmakers.nature.com (Table 1) Moderna Therapeutics deals2013–2016* . Large andbiotech players pharma

some oftheoncologytargets. $240millionupfront forModerna exclusive accessto any ofthecardiometabolic targets and therapeutics for cancerandfor cardiovascular, metabolicandrenal diseases. AstraZeneca willpay AstraZeneca to develop mRNA $420millionwithModerna signed adealpotentially worth forlicense rights ten products. development ofmRNAtherapeuticsto treat rar forAlexion Pharmaceuticals signed a$125milliondealwithModerna thediscover using Moderna’s mRNAplatform. to drugs develop new withModerna Hospitalpartnered andtheKarolinska Institutet The Karolinska agreement to develop five mRNA-basedtherapiesandvaccinesagainstundisclosedvirustargets. Moderna’s venture infectious-disease-focused Valera andMerck signed alicenseandcollaboration drugs andvaccinesfor infectious diseasesusingModerna’s mRNAplatform. PasteurInstitut to discover signed withModerna anddevelop aresearch collaborationpartnership 2015. virus targets establishedinJanuary inadditiontocandidates theongoingresearch to Merck, collaborationto develop vaccinesagainst vaccineprogram licensedanew Moderna againstanundisclosedtarget andasetofvaccine commercialize mRNAtherapeuticcandidates for cancers. various to develop thebiologics ofAstraZeneca, and arm withModerna MedImmune, partnered combination withMerck’s (pembrolizumab). inhibitor drugKeytruda checkpoint based personalized vaccinesbasedonModerna’s mRNAvaccinetechnology andevaluate themin signed a$200millioncollaborationandlicenseagreementModerna withMerck to develop mRNA- discover fibrosis. anddevelop mRNAtherapeuticsfor cystic $315millionto inadealpotentially worth withModerna Vertex Pharmaceuticals partnered Summary - - - - Chris Morrisonisafreelance writer forthepharmaceutical andbiotech industry. behavior” around accessingtechnology platforms, hesaid. come to us. That’s where we’ve seen the most dramatic change in agreement. companies wantssomething, oneofyour portfolio just “If and thatAdimab haseven offered someventure capitalistsatemplate are efforts, companiesto telling outsource theirportfolio discovery several full-timeemployees andalotofequipment,hesaid. group,” whichcanbeexpensive andtimeconsumingrequires past, that required small companies to build an antibody discovery targets, need and they molecules to modulate that biology. the “In built around diseasepathway anideaaboutanew orasetofnew ogy testing business,” saidAdimab’s Gerngross. Companies are often technologiesthe needto into drugdiscovery incorporate theirmodels. organizations.pharma are re-evaluating Even startups venture-backed access technologies through isn’t creative dealmaking limited to large cell therapy andgenetherapy. Andthewillingness ofcompaniesto such assmallmoleculesandbiologics to newer technologies suchas platform companieswithfocuses ranging from traditional modalities Catering to pharma’s appetite appearsto bethe template for ahostof justNot pharma advantageof.”taking their fingers on that pulse? That’s what we’ve been witnessing and technologies willbeoutthere,” saidLorence Kim. “How keep dothey Gerngross pointed out that several forward-thinking venture Gerngross pointed firms out that several forward-thinking “At theendof day, companiesare inthebiol venture-backed e diseases. Alexionwillhave exclusive optionsto y and

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