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Pfizer, Buying 12-Percent Stake in Perlegen and Penning Research Alliance, Bolsters PGx Play


Add Pfizer to the short list of Perlegen owners. The world's largest drug maker by revenue last week disclosed that it bought a 12-percent stake in the Mountain View, Calif.-based pharmacogenomics company, and has promised to invest more if Perlegen goes public.

The deal, worth at least $50 million to Perlegen, was disclosed one day before the companies said they penned a four-year alliance to study whole genomes in an attempt to identity genes linked to undisclosed diseases and drug response. It is the third publicly disclosed collaboration between the firms. The research alliance and investment are unrelated, according to a Perlegen official.

Perlegen, which is privately held, "has not made any decisions as to whether or when to pursue a public offering," Rob Middlebrook, Perlegen's chief corporate development officer, told Pharmacogenomics Reporter this week.

Asked whether Pfizer's investment may signal its intent to acquire Perlegen, Middlebrook last week that "we have no idea what Pfizer's expectations might be at this point — we're close collaborators, and it's our hope and expectation that we'll continue to collaborate with them on a range of disease- and pharmacogenomic-types of studies."

The investment calls for Pfizer to buy $50 million worth of Perlegen preferred stock and includes an agreement by Pfizer to purchase an additional $25 million in stock if Perlegen files an IPO in 2006.

"The equity rounds [Perlegen has] announced have been all the stock we've sold. The only amount on top of that would be a nominal amount of additional capital from employees exercising stock options."

Perlegen, an Affymetrix spin-off, is owned by several private investors whose exact stake in the company is not public information. "Affymetrix owns a little bit — less than 25 percent of us at this point — [and] Pfizer now owns about 12 percent. Beyond that, we don't give out the percentages of the others," said Middlebrook.

In its announcement of Pfizer's investment, Perlegen listed Affymetrix, Maverick Capital, CSK Ventures, and Eli Lilly as significant stakeholders. In an interview with Pharmacogenomics Reporter, Middlebrook said investors also include board member Alejandro Zaffaroni, private Swiss bank Lombard Odier Darier Hentsch, and Vulcan Ventures.

Eli Lilly is the only other big pharma known to be a Perlegen stakeholder.

Pfizer spokesperson Kate Robin told Pharmacogenomics Reporter that the investment is "not [of] material value" to a company of its size. "We've done an awful lot in the area of genomics," and she was not able to provide information related to Pfizer's investment in companies similar to Perlegen. Robin declined to speculate whether Pfizer might eventually acquire Perlegen.

Last February, Perlegen sold $74 million of preferred stock to several new and then-current investors. Previous private-investment rounds include a $32-million preferred-stock placement inJanuary 2003 and a $100-million preferred-stock placement in April 2001, which occurred while Perlegen was an Affymetrix subsidiary. These placements totaled around $257 million, according to Middlebrook.

As a private company, Perlegen's market capitalization cannot be readily calculated, but Middlebrook said that "the equity rounds we've announced have been all the stock we've sold. The only amount on top of that would be a nominal amount of additional capital from employees exercising stock options."

The pharmacogenomics collaboration between Pfizer and Perlegen, meantime, is aimed at hunting for genomic markers related to "major disease areas," as well as patients' response to undisclosed drugs, said Middlebrook. The collaboration is not tied in any way to Pfizer's stock purchase, he said.

"During the course of the discussions on the research collaboration, the discussions about an equity investment became more serious in the last couple of months," he said. "So the two sort of ran parallel for the last little bit there, but now they're basically separate."

Because Pfizer makes drugs for a wide array of indications, it's difficult to gauge the direction in which the new research alliance will go. Earlier projects between the companies include a genotyping effort to look for genomic markers of drug response to undisclosed compounds made for major depression, and a project to look for SNPs associated with a patient's risk of developing metabolic syndrome, which is linked to cardiovascular disorders.

The companies announced both projects in January 2004. The collaborations involved proprietary work, and did not result in any scholarly publications or other public evidence of progress, Middlebrook said.

— Chris Womack ([email protected])

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