Novartis Plugs Gaps in Pharma Pipeline

Novartis hopes that Vertex Pharmaceuticals' structure-based drug design will deliver at least eight product candidates that target protein kinases into its development pipeline in the next six years. That's the goal for their new alliance, under which Novartis is providing Vertex $200 million in research funding, another $200 million as an interest-free loan (which will be forgiven to the extent that the monies drawn cover development of products Novartis accepts for development), milestones, and royalties. In fact, Vertex could receive as much as $600 million prior to commercialization--more than the industry benchmark for target discovery deals, the $425 million Bayer/Millennium collaboration. But unlike that deal, in which technology exchange was a vital component, this is an outsourcing by Novartis of its R&D in the area--accounting for about a third of its current R&D spending on external collaborations.