The necessary relationship between biotechnology companies and big pharma drives both industries - pharma has the money but often has science needs; biotechnology has the science but often lacks financial resources.

In the depressed markets that at times has made survivability a question, partnerships take on even more significance. And there's a rising trend of biotechnology companies filling their partnering needs from other biotechs. As Stan Yakatan, chairman and managing partner at Katan Associates said, partnerships are becoming "less between biotech and pharma and more between biotech and biotech, and I think that will continue as big pharma gets more selective."

Katan made that comment at the first BioPartnering North America conference, held in Vancouver, British Columbia, last week. With 52 biotechnology companies presenting and another 16 presenting in the Emerging Companies forum, and plenty of pharma reps on hand, the conference was designed to open the lanes of communication, giving both sides a chance to meet, talk shop, show what they have and say what they need. Its sister conference, BioPartnering Europe, is entering its 11th year.

The final tally of attendees in Vancouver swelled to more than 650. The key to success, said Robert Kilpatrick, partner at Technology Vision Group LLC, which organizes the conferences, is "the ability to attract the right people from the right companies." In other words, people that have decision-making power or have access to those who do - people Kilpatrick called "gatekeepers."

"We see this as a very cost effective and efficient tool for meeting a broad spectrum of potential partners to help grow a company or meet its needs," Kilpatrick told BioWorld Financial Watch. BioPartnering Online, an interactive web-based site that helps companies contact each other, set up meetings and even allocate rooms before the conference started, prevents wasting time once at the conference, Kilpatrick said. It means attendees can do what they came to do - meet and evaluate potential partners.

Deals are secured in weeks and months, not days, so while the ultimate end of many meetings over the duration of the conference won't be known immediately, success can be claimed, Kilpatrick said, "if a company increases the number of gatekeepers it knows."

In Search Of A Partner

Enter Phenomix Corp. The La Jolla, Calif.-based company last March secured its first round of funding - a commitment of up to $32 million, of which it drew down $12 million. In June it landed Laura Shawver as CEO and president. Previously president of Sugen Inc., a division of Pharmacia Corp., and having spent 10 years there, Shawver moved to take the helm of Phenomix because of its "scientific underpinnings," she said.

The company uses a "forward genetics" approach. It combines target discovery, target validation and the generation of relevant models for disease. Phenomix introduces random mutations into mouse models using chemical mutagenesis, then conducts physiological and biochemical assays and screens populations for symptoms of disease traits. Once an interesting mutant is identified, Phenomix maps and clones the relevant gene.

Phenomix uses its technology to provide validated drug targets, but also to provide pharmacological models for discovery efforts, as well as to suggest patient selection strategies and clinical trial design.

The company is focused on four disease areas: immune system, metabolic, central nervous system and respiratory. With the sizable first round under its belt, Phenomix is in the rare position of not needing money, but what it does want is "a few select partners for our technology," Shawver said.

"We came to the conference with the expectation that we will meet extensively with [potential partners]," she told BioWorld Financial Watch. And because the conference is of a "reasonable size," she said, "you can bump into people and set up a meeting."

At about 40 employees now, Phenomix is seeking partners "to uncover the causes of central nervous system and metabolic disorders, and respiratory diseases such as asthma," Shawver said. The company plans to pursue its own immune modulation program, but will be seeking a development partner.

The conference also provides panel discussions on partnering and open house presentations in which companies are handed the podium and 15 minutes to detail themselves. Phenomix's time slot was sandwiched between TGN Biotech Inc., of Ste-Foy, Quebec, and ProSkelia Pharmaceuticals, of Paris. When asked if 15 minutes is long enough, Shawver laughed.

"It's very difficult to do in 15 minutes, because we can only do a snapshot of what we offer," she said. When she took the podium, she explained Phenomix's technology and mapped out the company's goals, which include moving one gene identification program into discovery and building its intellectual property portfolio. And of course, Phenomix would like to attract a corporate partner, she said.

The Other Side - What Pharma Wants

But what is pharma looking for these days, when even the "elephants," as one panel member called pharmaceutical companies, are feeling the economic pinch? Although a lot of factors play a part, it seems nothing trumps good science.

Barbara Yanni, chief licensing officer at Merck & Co. Inc., of Whitehouse Station, N.J., said her company examines a potential partner's way of thinking and decides if the companies can work together. There also is this question: "Do we admire their science?" she said.

Michael Levy, vice president, alliance management at Bristol-Myers Squibb Co., of New York, said that although his company tries to license products within its core areas, it is always looking for brilliant science that addresses an unmet medical need. Jonathan Turner, head of the business development department at Boehringer Ingelheim GmbH, said his company had a similar creed.

If the science is strong, he said, "we are willing to adopt areas that are outside our franchise."

With pharma and biotechnology both well represented at the conference and often sitting alongside each other on panels, at times the conflicts that exist in the push and pull of negotiations surfaced.

In a panel investigating how deals are done, Caprion Pharmaceuticals Inc. President and CEO Lloyd Segal interrupted Jitendra Patel's comments on risk sharing to state that when big pharma talks about sharing risk, it means it wants its share to be zero.

"I see nothing wrong with that," Patel replied. Patel is director, discovery alliances, at AstraZeneca plc, of London, and while he joked the moment away, it defined the nature of business negotiations - each side wants a deal that serves it best.

But Patel said his company would be "doing far more specialized technology deals," saying, "We know there are technologies we need and we go out and get them."

For companies like Phenomix, that's good news. Although the big product deals are sexier, for most young companies, technology deals are a pressing need - without compounds to yet attract pharmaceutical companies, it's up to the technology to shoulder the load.

By the end of the conference, Shawver said she had had 10 meetings in which she and another company representative sat down and talked, and another half-dozen or so unofficial meetings where she bumped into someone and the occasion grew into an informal discussion.

Kilpatrick said conferences of this nature have a "fighting weight" - anything above that is obese and anything below is underweight. He figures the upper limit to be 2,000 people. The last BioPartnering Europe conference had 1,350 attendees. With more than 650 at the virgin North American version, Shawver said it is an excellent size, but worried "that [success and growth] will make it less personable and more difficult to have these one-on-one meetings."

What happens after the attendees check out and the planes depart is anyone's guess, but Shawver is hopeful. For one, she also feels a change in the industry and said more potential partners are willing to put money into a technology, instead of just chasing compounds. The success of her trip north will be gauged later.

"We'll judge that by how many folks we get on the scientific side," she said, the next step after meeting with mostly licensing people during the conference. "But I do think we will be successful in getting those meetings."