Biotech Values

[AlpineBV_Miller]

re: partner

See also Aventis and Genta on Genasense and almost any CNS drug.

I see partnering as a reflection of management capability and temperament more than validation of a drug's chances to see FDA approval. If management does not partner their company's first drug, it often reveals a lack of appreciation about the difficulties in getting a drug through pivotal trials and approved. This lack of experience (some call it arrogance) often shows up at exactly the wrong time later. There are many caveats to this and every situation is different, of course. The most obvious caveat is for orphan drugs in small (non-cancer) indications. Most biotechs are perfectly capable, with the right personnel and consultants, to push an orphan indication through to approval.

Because management is too often given shares or allowed cashless exercise of options, they forget the rest of us have to pay good money for them and dilution is a real concern for us. Partnering the first drug with a good partner, even on an imperfect deal, allows the entire biotech team to get low-cost on-the-job training on the what-to-do and what-not-to-do in taking a drug through to approval. If the partner foots the bill (or a good portion of it), then shareholders get to enjoy less dilution along the way.