Company Analysis - Genentech
Success in relationships
Currently, over half of Genentech's development pipeline has been in-licensed, with 23 drug candidates licensed-in, compared with 17 drugs for which Genentech originally commenced development [Graph 1]. Deals made by Genentech have defined its progress and success; recent examples are the ongoing purchase of the entire Amphora oncology pipeline, and an exclusive global collaboration with The Walter and Eliza Hall Institute of Medical Research in Australia to develop a new class of broad-spectrum apoptosis-inducing cancer therapeutics. Also, Genentech has licensed or purchased individual compounds; on the last day of the financial quarter in 2006, Genentech boldly purchased XL-518, a potent and specific MEK inhibitor under development by Exelixis as a targeted anticancer, a preclinical candidate presently awaiting IND approval. Genentech will be hoping to replicate the success of the 1995 deal with Biogen Idec for Rituxan (rituxumab), which went on to produce blockbuster annual sales in 2006 of US $2,071 million, demonstrating the huge success and fiscal reward that can be delivered through this strategy. In another example in 2000, Genentech established a deal with Immunogen, for the microtubule inhibitor maytansinoid DM1. It is hoped that a conjugate with Genentech's Herceptin (trastuzumab) will produce a more potent anticancer with specificity for HER2-expressing tumours.
In 2007, in a departure from its strategy of acquiring individual drugs and pipelines, Genentech is in the midst of a US $919 million acquisition of the small rival biotech company Tanox, with closure expected in the first quarter. This will streamline a three-way partnership between the two companies and Novartis for Xolair, an allergic asthma therapeutic, perhaps marking a potential new direction for Genentech.
