It’s commonly known that as pharma companies face declining productivity from in-house R&D operations, many have become more reliant on external alliances to produce the medicines and vaccines of tomorrow.
Notwithstanding all the original research that is conducted at Merck labs globally, Merck also realizes that the next great discovery in medicine may come from outside of Merck’s laboratories. This is why partnering has become an essential component in the company’s strategy.
Already one of the top R&D investors in Canada, the company has established its presence in the province of British Columbia and is interested in local, regional and global opportunities both in the private and public sectors to partner.
“We’ve had ongoing partnerships and research collaborations with different investigators at Simon Fraser University (SFU) and UBC for instance, as well as many companies in the province,” says Jennifer Chan, Merck’s Vice President, Policy and Communications, in Canada.
Among the more notable of these collaborations was a $1.4 million donation from Merck Canada to Simon Fraser University. The donation included an equipment donation and will support research and teaching in a number of areas that affect human health, including virology, immunology, toxicology, biochemistry and pathology.
“This donation was really to enable research, to make a difference for the students and professors at SFU, and encourage the advancement of knowledge on chronic and infectious diseases through Canadian-based research. By providing this equipment, we are thus contributing to the future of the B.C. biopharmaceutical industry,” says Chan.
Another way that Merck is active in the province is in the clinical space. “Certainly when looking at B.C., if you look at our clinical research activity, the province is a key contributor in terms of the patients that are recruited in our clinical trials conducted globally in a number of therapeutic areas, such as infectious diseases, cardiovascular, diabetes, oncology, respiratory and vaccines,” she said.
Even more impressive is Merck’s partnering efforts in the province’s private sector. Reflecting B.C.’s vibrant life sciences sector, Merck has partnered with innovative companies in the province that are developing new therapies, including: Cardiome for the development of a drug treatment for atrial fibrillation; Alectos in the therapeutic area of Alzheimer’s disease; Xenon for cardiovascular disease; EnWave to determine the feasibility of the Radiant Energy Vacuum (REV) technology for the rapid, controlled dehydration of biological materials; and Zymeworks for the development of bi-specific antibodies that can bind to two different drug targets.
To facilitate these partnerships and to find the best science, innovation and technology out there, Merck has scientific scouts, all of them senior scientists stationed around the globe. As the scientific representative for licensing and external research in Canada and Director, World Wide Licensing and External Research, Dr. Steven Xanthoudakis is the primary point of contact for the Canadian community. While he is based in Montréal, he has a pulse of what’s going on in the province and he has much to say on what drives Merck’s keen interest in these types of companies.
“When you look at Merck’s activity in terms of partnering record, I think we’ve been extremely active in Vancouver relative to other regions in the past six years. It wasn’t by design, but what’s happened here in B.C. is the technologies that are being developed amongst the various companies that we’ve partnered with are all strategically very good fits with our existing R&D interests. These companies have been able to define what the unmet medical need is that Merck is trying to address,” he explains.
As a scout, the most important part of Xanthoudakis’ role is building relationships. Moreover, what he looks for in prospective partners and opportunities is first and foremost a strategic fit.
“Obviously we want to expand our pipeline or to address a potential gap in the pipeline and we’re in need of a product or a technology at a particular stage of development, so the key driver is our pipeline. But beyond that a lot has to do with the company itself, the management, how viable we feel the company is, and whether or not we feel the company can actually deliver on the research collaboration if in fact we are going to collaborate with them on the research as opposed to doing all the R&D ourselves,” he says. “Whenever possible we strive to leverage the expertise and experience of our partners.”
Among the more notable of these research collaborations is the $800 million deal signed with Cardiome Pharma Corp. and its heart drug vernakalant in March 2009.
“In the case of Cardiome, we knew what the company was working on since 2006, but the technology wasn’t sufficiently developed for uptake and it didn’t align itself with our strategic interests in the cardiovascular space when they first approached us. Yet as they advanced their program along, our own focus changed and we made the decision that atrial fibrillation was an area we wanted to get into. So, our cardiovascular franchise went looking for an opportunity and Cardiome became the right fit as a partner,” he said.
While Cardiome is an example of a partnership that was facilitated because the company was further along in its development, Xanthoudakis says that Merck is not discriminatory to early stage companies.
“Most of these deals are very early stage deals with the exception of Cardiome, which is now a marketed product in the EU and some other regions. Everything is in the discovery to pre- IND (Investigational New Drug) stage, or it’s an enabling technology. We seek partners at all stages of research and development, and platform technologies as well. For example, SFU spin-out Alectos Therapeutic was a very young company when we partnered with them. They were working on a novel target that was of interest to Merck and they had started a program to develop compounds that modulate O-linked N-acetylglucosaminidase (O-GlcNAcase), an enzyme that is believed to be involved in the development of Alzheimer’s disease and potentially other disorders. They had a program that was at an early stage but one that was exciting to us. EnWave was a very recent deal. They have a microwave drying technology that our vaccine group sees potential value in for the development of vaccines. It is a truly enabling technology if it works for vaccines. In the case of Xenon, we’ve had multiple discussions with this company. The latest deal that we did with them around new cardiovascular targets and research was a logical follow-up to the numerous previous interactions that we had with the company. We both value the synergy that has been created as a result of the partnership.”
Sometimes changes at the global organizational level can lead to new priorities for partnering.
“That was certainly the case with Zymeworks. I’ve watched that company grow from just a couple of people to in excess of 30 people now but when they started off, they were really focused on enzyme engineering. It wasn’t until their antibody platform really started to take shape about a year and a half ago, that we saw the potential to partner. What ultimately drove the deal with Zymeworks was our own merger with Schering-Plough. It was pretty serendipitous timing because after that merger, Merck gained significant biologics capability and we realized that the technology they were developing around antibody engineering was something that could further enable our new in-house antibody efforts. So, between them shifting their focus and our need being basically created because of the merger, it all came together.”
On how the relationships are struck, Xanthoudakis says there are often wide combinations of factors at work.
“It’s really a combination of things that bring these opportunities to us, and allow us to engage in partnering discussions and sign deals. Sometimes it’s just word of mouth between people at the company who have either previously had an affiliation with Merck or know somebody at Merck. Sometimes it’s just through pure scouting, as was the case for the EnWave and Alectos deals. Sometimes it’s a case of we’ve already established a relationship with the company and want to pursue a collaboration with them, like with Cardiome, Xenon and Zymeworks.”
He adds that Merck certainly has every intention of expanding its footprint in B.C. through more partnerships if the fit makes strategic sense.
“What I say about B.C. I think applies to the rest of the country quite frankly. Certainly we’re committed to increasing our partnering efforts and that commitment comes from the most senior levels of our organization, starting with our CEO Ken Frazier right on down the chain. Our doors are open.”
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