In an interview, Peter Corr, the new head of the industry's largest R&D organization, argues that scale, properly managed, can solve the key problem for innovative R&D organizations: the ability to feed both early- and late-stage development. Smaller firms create unbridgeable pipeline gaps by having to focus on the late-stage and starving the early work. Moreover, Pfizer is making a huge investment in attrition-reducing early-clinical technologies, especially imaging, to find biomarkers which will tell researchers whether a drug is working in humans before it begins more expensive trials. Again scale is crucial: Pfizer's investment can be amortized over a large number of projects, making it financially more affordable and productive for Pfizer than a similar investment would be for smaller companies. To increase the utilization and productivity of this investment, Corr wants to increase Pfizer's in-licensing of preclinical and Phase I compounds--a dramatic change in Pfizer's licensing habits, which have focused on late-stage opportunities and the acquisition of discovery platforms.

At a time when high-cash discovery deals, and particularly platform deals, are increasingly difficult to find, a number of companies have pursued alternative strategies for creating important transactions. In the first place, many biotechs have changed their attitude to technology transfer, willingly selling technology, and sacrificing any product-related upside from their clients' programs, in return for more significant upfront funding to pay for creating a more integrated in-house discovery effort. Several companies have also, by focusing efforts on just a few partners, expanded the relationships into a series of deeper and more valuable collaborations. Other biotechs have recognized the value of barter, trading off cash compensation for assets, like combinatorial chemistry expertise, assays, cell lines or even product candidates, which allows them to build internal value faster.

Formed by Kalamazoo-based Pharmacia alumni, AureoGen Biosciences Inc. is genetically engineering cyclic peptides to create second-generation, resistance-proof anti-infective and anti-fungal therapeutics.