Drug Company Makes Big Deal
Drug Company Makes Big Deal [The News and Observer, Raleigh, N.C.]
From News & Observer (Raleigh, NC) (December 8, 2009)
Dec. 8--A small Durham drug company has attracted a partnership with pharmaceutical giant Bristol-Myers Squibb that could be worth hundreds of millions of dollars.
Tranzyme Pharma will announce this morning an agreement to work with New York-based Bristol-Myers to find new medicines using its drug-discovery technology.
The deal calls for Tranzyme to receive $10 million now and $3 million to $6 million more in research funding during the next two years. The company will be eligible to receive more money as new drugs reach development and regulatory milestones.
The total payments for each successful drug could top $80 million, Tranzyme CEO Vipin Garg said.
"This is a very big deal for us, to have found the right partner," Garg said. "We can leverage our expertise with their resources and infrastructure."
The Triangle is home to dozens of small drug-discovery companies that rely on venture capital or partnerships with bigger pharmaceutical firms to pay for the expensive research and marketing required to bring new medicines to market.
"These types of deals are another validation of the growing maturity of North Carolina-based biotech companies," said John Richert, a vice president with the N.C. Biotechnology Center. "They’re producing products that big pharma wants."
Bristol-Myers has been cutting costs and selling assets to raise money to buy biotech companies or invest in promising drugs. Last month, Bristol-Myers said it would spin off its stake in Mead Johnson Nutrition, the maker of Enfamil infant formula.
CEO James Cornelius told Wall Street analysts at the time that his aim is to make Bristol-Myers more "flexible and nimble" by focusing on drug development.
Other drug makers, including GlaxoSmithKline, also are seeking new treatments as generic rivals threaten sales of existing products.
Tranzyme, which employs about 25 people, will hire an additional 10 to 12 employees as it expands research under the Bristol-Myers deal, Garg said. Tranzyme will use its chemistry technology to search for new compounds that could be turned into drugs to treat diabetes, cancer and other diseases.
Tranzyme’s focus is on drugs built from midsize molecules. Traditional drugs such as aspirin use small molecules, which can be taken by pill, while more complex drugs use large molecules, which typically have to be taken intravenously.
"The beauty of our technology is that it allows us to explore the benefits of both," Garg said.
Tranzyme also is testing its own drugs, including a treatment for a type of stomach ailment that afflicts people with diabetes. The company was founded in 2000 and moved its headquarters from Alabama to Durham in 2002.
Tranzyme has raised $60million in venture capital.
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Posted: December 2009