More diabetes drug alliances

Tue, 27 Jun 2006
Partnerships between two companies (usually one smaller biotechnological company with groundbreaking research and one larger manufacturing and marketing company with resources and distribution infrastructure) to develop and sell drugs for the treatment of diabetes and other metabolic diseases are becoming increasingly more common. As well as holding hope for an eventual cure and more user-friendly treatments, these deals are also extremely lucrative, sometimes commanding hundreds of millions of dollars .

News this week is that Metabolex Inc. (a biotechnology company that is privately owned) will collaborate with pharmaceutical giant Johnson and Johnson to develop diabetes drugs. The deal will apparently be worth over $500 million. J&J will buy a $40 million equity stake in Metabolex. The Chief Executive of the smaller firm was understandably elated, and reportedly said: "This gives us a really powerful development portfolio and a strong development partner ."

A second deal between Amylin Pharmaceuticals and Nastech Pharmaceutical Co. was announced this week. They aim to work in conjunction to develop an nasal spray to help treat diabetes. The news increased Nastech share value, as they will receive royalties and milestone payments . Amylin shares also edged up.
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