In the biotechnology industry, deals take many shapes. Traditionally, many have been structured in a way that can be thought of as a yes or no kind of scenario. A company is acquired—
or it isn’t. A partnership is established to yield a singular outcome on a singular program: nothing more, nothing less. There is no mistaking that these types of deals can have a multitude of benefits. And yet, only considering these types of deals can be limiting. It can close off lines of communication, create barriers that limit innovative progress, and ultimately lead to missed opportunities for companies looking to deliver for shareholders, earn a return, and bring forward important medicines for patients.
One way Amgen addresses this limiting factor is through working towards establishing more “open” arrangements with early startups and venture groups in the life sciences field. At Amgen, this often takes place through Amgen Ventures, Amgen’s venture capital arm. “This type of agreement is one of the new ways we are thinking about partnerships today at Amgen and within Amgen Ventures—more collaborative, but also with a close eye on financial return,” said Janis Naeve, Managing Director, Amgen Ventures.
For example, a young biotechnology company may be onto a very promising innovation, but have a need for strategic counsel, technical expertise, or broader knowledge they don’t have in-house. Amgen may enter into an agreement to provide this kind of support in exchange for visibility into the early innovative work being done at the company, and with a future opportunity to partner on that innovation. There are no guarantees at this early stage, but this could ultimately result in an acquisition or licensing agreement and an incredibly promising investigational medicine entering Amgen’s pipeline.
One example of this type of relationship can be found through an agreement Amgen Ventures has established with Atlas Venture, a leading early-stage venture capital firm that invests in new life sciences companies.
In May of 2013, Amgen was one of two companies to establish a Corporate Strategic Partnership (CSP) with Atlas. One aspect of the relationship involved providing “strategic proximity…to Atlas Venture’s startup formation activities around innovative, potentially high impact medicines, and catalyze future collaborations around translational research across Atlas Venture’s early stage portfolio.”
“By partnering with Amgen, we’re able to tap into their world-class R&D knowledge and combine it with our focus on creating and building new, entrepreneurial startups,” said Bruce Booth, Partner at Atlas Venture. “By working collaboratively in an ‘open market’ environment with Amgen, we’re able to create the dynamic and innovative culture required to nurture the next generation of high impact biotech companies.”
Naturally, great care is taken to protect Amgen’s proprietary assets, and the company is very selective about what companies it chooses to partner with in this manner. “We have a tremendous amount of respect for Atlas, and the companies they have investments in, which is why we felt it was the right organization for this type of arrangement,” said Naeve. “Many of the companies they have in their life science fund are also focused on serious illness such as neurodegeneration, diseases of the aging, and autoimmune deficiencies, which makes us even more excited to be involved.”
These types of deals do not replace traditional M&A or licensing arrangements at Amgen. However, they do have the potential to create greater access to emerging innovation that might otherwise be opaque to Amgen, while allowing startup companies to advance what could end up being an important medical breakthrough.