Corange Signs Back-to-Back, Big Money Biotech Deals...Again

Corange shocked the industry in 1993 with its two blockbuster $200+ million late stage alliances with CellPro and Protein Design Labs. Corange was then run by Max Link--let go after both employee revolutions and board disagreement with his high-risk biotech vision. Now Corange has signed two early stage collaborations that could bring over $150 million in total to biotechs GeneMedicine and Sequana Therapeutics. But the structures are far more conservative than those done under Link.

Corange shocked the industry in 1993 with its two blockbuster $200+ million late stage alliances with CellPro and Protein Design Labs; before those deals, Corange was largely regarded as simply the holding company behind DePuy and Boehringer Mannheim, and by no means a force in biotech dealmaking. But at the helm of Corange’s strategic initiative was former Sandoz Pharma CEO Max Link, an ardent believer in the value of biotech, and, in keeping, an agressive licensing innovator.

But Link’s high risk vision for Corange’s technological future, his severe cost-cutting and layoff policies, and his idea of a US-based drug business soon led to open conflict with the company’s directors, ultimately leading to his dismissal. Soon thereafter, Corange announced its scaling-back of the mega-deals over the next year (balking on a potential $188 million in total potential payments to the biotechs over the lengths of the deals). The company dropped funding of PDL’s preclinical monoclonal antibodies and scrapped its ex vivocell therapy program with CellPro altogether, retaining non-exclusive gene therapy rights to the technology (an open rejection of one of Link’s favorite technologies—he had orchestrated Sandoz’ cell therapy joint venture with Systemix).

But Corange is hardly out of biotech. It laid all doubts about its biotech partnering intentions to rest last month with the signing of two early stage collaborations that could bring over $150 million in total to biotechs GeneMedicine and Sequana Therapeutics. Among the differences between these deals and the Max Link deals: the shift to very early stage collaborations, as well as the fact that Corange gets exclusive worldwide rights to to all of GeneMedicine’s non-viral gene therapies for certain cancers, plus all diagnostic and therapeutic rights to Sequana’s discoveries in the genetic causes of osteoporosis (the company had traded away considerable North American rights in the CellPro and PDL deals).

Also, Corange has grown more cautious about guaranteed payments: while over 50% of the total ’93 deals’ potential values were virtually guaranteed, with $10 million signing fees and non-milestone equity payments of $75 million to PDL and $110 million to CellPro (later lowered to $80 million), the new deals, while still high priced, are predominantly milestone-based, only guaranteeing $20 million in equity payments in GeneMedicine and a $1 million signing fee plus $7.25 million in equity payments to Sequana. As Corange’s bold new gene therapy initiative takes shape, one thing seems clear: unlike most other mid-sized European-based companies, Corange is one of the most aggressive biotech collaborators in the industry, with or without Max Link.