SAN DIEGO – Mere minutes into the recent Biocom Global Life Science Partnering Conference, a panel of big pharma and big biotech business development executives had already launched into a discussion about hepatitis C virus (HCV).

That HCV was a hot topic at a partnering conference was no surprise, given Gilead Sciences Inc.'s $11 billion acquisition of Pharmasset Inc., Bristol-Myers Squibb Co.'s $2.5 billion acquisition of Inhibitex Inc. and Roche AG's $230 million acquisition of Anadys Pharmaceuticals Inc., all of which occurred within the last few months.

HCV has gotten so hot that BioLineRx Ltd. saw its stock double when it licensed a protease inhibitor from Genoscience last month, and its stock jumped again yesterday on the news that it had licensed a second HCV compound. (See BioWorld Today, Oct. 18, 2011, Nov. 22, 2011, Jan. 10, 2012, and Jan. 25, 2012.)

"Let me remind you that $2.5 billion is $8.5 billion less than $11 billion," joked Martin Birkhofer, vice president of BMS' strategic transactions group, when asked if the HCV space had become overvalued. Yet he assured the audience that BMS had done "very thorough due diligence" before buying Inhibitex and that the big pharma sees HCV as "a real part of our growth story."

"I think hepatitis is undervalued in terms of global potential," argued Tony Rosenberg, head of global business development and licensing at Novartis AG. He added that the drug industry has tended to focus on the Western markets and undervalue the global potential over the long term.

But while many a cancer-focused small biotech has been overheard muttering recently that they wish they had a protease inhibitor, HCV isn't all the big pharma folks are interested in.

Rosenberg said Novartis is focused on vaccines, virology and infectious diseases. But he added that the Swiss big pharma's $10.2 billion acquisition of Alcon Inc. gave it a strong interest in ophthalmology research and it also has an active program in hearing loss, including a collaboration with GenVec Inc.

Epigenetics is another area Novartis is interested in, Rosenberg said.

For BMS, the focus is on immuno-oncology, as well as biomarkers and other patient selection tools, Birkhofer said. He said the firm is also very interested in a disease-modifying Alzheimer's drug, but he acknowledged that such a program would be "phenomenally high risk."

Rosenberg quickly added that Novartis, too, would be interested in a disease-modifying Alzheimer's drug, but he said he doesn't see how any one company – even a big pharma – would be able to fund the risk for such an endeavor. Hence he predicted that an Alzheimer's program might be best pursued by two big pharma firms in partnership with each other.

At GlaxoSmithKline plc, the partnering focus is on vaccines, rare diseases, diseases of the developing world and drug delivery/formulation. Meanwhile at Celgene Corp., it's not only oncology but chronic inflammatory disease, according to the firm's senior vice president of business development, George Golumbeski.

While the panel agreed that the majority of the innovation is still coming from biotechs in the U.S., Celgene's Golumbeski said he sees innovation starting to arise in China, and over the last six months he had his first meetings with three Chinese companies he considers "real" biotechs doing innovative research on legitimate targets.

Greg Wiederrecht, vice president and head of external scientific affairs at Merck & Co. Inc., said his company has 17 scouts globally and has often found good licensing opportunities outside of the U.S. Osteoporosis drug Fosamax (alendronate) came from a tiny Italian company, and gastrointestinal drug Pepcid (famotidine) came from Japan, he said.