As the line between pharma and biotech gets blurrier, Bayer has agreed to outsource some of its preclinical testing to CuraGen. In the smaller part of a two-pronged, billion-dollar-plus deal, Bayer committed $39 million over five years for CuraGen’s pharmacogenomic and toxicogenomic technologies and invested $85 million in its stock.
The deal calls for Bayer to send drugs to CuraGen for genomic testing. CuraGen will use its functional genomic technology to analyze Bayer’s pipeline, says Bayer spokeswoman Laura Malis. Pharmacogenomic and toxicogenomic capabilities are not part of Bayer’s current deal with Millennium, she adds.
CuraGen will use its technologies to “discover genes, figure out how they work, identify their proteins, and associate them with particular individuals,” says CuraGen spokesman Mark Vincent. “No matter where they get their target from or what the product is, sooner or later that will go through CuraGen,” he says, adding that Glaxo Wellcome, Hoffman-La Roche, and Genentech have enlisted CuraGen for similar testing services.
In addition, CuraGen will use the information it generates to compile a database of toxic markers. According to Vincent, CuraGen will have the right to market the database to anyone but will pay Bayer a royalty for its use.
Later, Bayer will have an option for a technology transfer in which CuraGen could equip Bayer’s labs with its functional genomic products.
The bigger part of the deal guarantees Bayer 80 targets specifically linked to obesity and diabetes, 12 of which are expected to be brought to clinical development. CuraGen and Bayer will split the $1.34 billion price tag 44 percent and 56 percent respectively for research, development, and commercialization.
— Meredith Salisbury