SAN DIEGO – In a session at the third annual Global Life Science Partnering Conference put on by Southern California life sciences industry organization BIOCOM, representatives from large pharmaceutical companies offered insights for biotechs looking to partner.

The message was clear: Ignore size and scope and find a partner that's focused on the disease area of the molecule to be licensed.

In some cases that might be a focused joint venture created when pharmas merge their franchises. New York-based Pfizer Inc. and GlaxoSmithKline plc, of London, combined their HIV franchises into ViiV Healthcare Co., eventually adding Shionogi and Co. Ltd., of Osaka, Japan, to the mix.

Bristol-Myers Squibb Co., of New York and London-based AstraZeneca plc teamed up to buy Amylin Pharmaceuticals Inc., expanding their diabetes franchises. Indianapolis-based Eli Lilly and Co. and Boehringer Ingelheim GmbH, of Ingelheim, Germany, have a similar diabetes franchise. (See BioWorld Today, July 3, 2012.)

"What you get coming out the other end is a company – it's a Celgene – it's focused so they can become the best at this area, and they're all motivated about driving that forward," Brian McVeigh, vice president of worldwide business development transactions and investment management at GSK, told the audience.

Merck & Co. Inc., of Whitehouse Station, N.J, has focused its franchises internally, integrating business development, research and development and the commercial sides.

"I think it's the fantasy of all of the heads of the franchises that they're going to be spun out and have their own company," Barbara Yanni, vice president and chief licensing officer at Merck, told the audience. But don't expect Merck to break up anytime soon, she warned, commenting that she tries to stress to the franchise heads that it's easier to get funding for individual franchises as a large company.

In theory, having a focused franchise or joint venture should make it easier to get a deal done. "If you do a deal with ViiV, you're going to be one of a small number of portfolio considerations, vs. if you did a deal with GSK, your asset is going to be part of a much bigger portfolio consideration," Glaxo's McVeigh said.

But he pointed out that it's still a joint venture owned by two large companies, so larger deals will still have to work their way through the approval process at the individual companies, which could prolong the transaction.

Beyond combining whole disease franchises, many pharmaceutical companies have set up partnerships to test their experimental drugs in combination, splitting costs but retaining the rights to their individual drugs. In 2009, for instance, Merck and AstraZeneca teamed up to test their Phase I compounds in combination. Merck's MK-2206 targets the Akt pathway while AstraZeneca's AZD6244 disrupts the MEK pathway.

"That kind of deal could be done with a biotech company if there was a similar situation. It's not based on the companies in those deals. It's just based on what's the right combination to go with," Merck's Yanni told the audience.

A focused large biotech company can offer the same benefits as a pharma joint venture without as much bureaucracy. "There is the flexibility that I've been given by our CEO and board that's culturally different than most pharmas," George Golumbeski, senior vice president of business development at Celgene Corp., told the audience.

"I remember one deal that we partially won because the large pharma couldn't get its board of directors together for two weeks," Golumbeski said. Celgene got everyone on the phone and approved the deal within 24 hours.

Golumbeski cited multiple interactions he had where senior management suggested that the partner be given more money. "I think that's good. I don't think we give away money, but I think we're very willing to pay and to share in success."

In most cases, that isn't going to be a standard licensing deal. "You've got to be a little out of the box to adjust for the risk in bringing on the molecule," Golumbeski said, highlighting Celgene's "build to buy" collaboration with San Francisco-based Quanticel Pharmaceuticals Inc. (See BioWorld Today, Nov. 7, 2011.)

While some pharmas worry about being able to recoup their investment after the drug is approved, Golumbeski said Celgene doesn't even do formal pricing and reimbursement studies before signing deals because of the changing times.

"Whatever happens to pricing and reimbursement, any company will be better off with an innovative medication that delivers value," Golumbeski said. "If you come to us and say, 'This is low risk,' that's probably one of the worst things you can say because, if it's low risk, it probably isn't very innovative."