Companies join forces in war on disease

As complex diseases grow more expensive to treat, and treatments increasingly expensive to develop, more companies may be looking at an innovative model set up last year by two of the biggest of Big Pharma.

Last November, GlaxoSmithKline (GSK) and Pfizer created ViiV Healthcare, a joint venture focusing on the research, development and commercialisation of HIV medicines. Pfizer's chief executive, Jeff Kindler, said ViiV had the capability to “reach more patients and accomplish much more for the treatment of HIV globally than either company on its own”. The new joint venture will use revenue from its existing HIV treatments, which totalled some £1.6 billion (US$2.38 billion) in 2008, to support investment in its pipeline and programmes.



“As the policy, regulatory, and business environment has changed over time, collaborations are one of a number of different approaches taken by industry to maximize R&D,” says a spokesman for the Pharmaceutical Research and Manufacturers of America, the industry’s US trade group. “In large part, these types of efforts have been driven by the reality of R&D increasing in cost, time and complexity, and the reality that venture capital and other sources of private capital are increasingly focusing on later-stage R&D projects, making it difficult for companies to fund earlier-stage R&D and increasing the need for such collaborations.”

Ultimately, the new company could offer lessons in how to deal with other costly illnesses, whose cures and treatments are likely to demand more resources than even the largest companies can currently provide.

As a venture devoted to a single illness, ViiV is a unique business model. But other companies in the sector are collaborating with academic researchers and smaller biotechnology companies in an effort to stretch research and development budgets further.

In February, Sanofi-Aventis, a French pharma producer, said it would invest up to €50m over five years in a research partnership with AVIESAN, a life sciences and healthcare alliance, to develop projects in areas such as immuno-inflammatory diseases and regenerative medicine. In 2008, UK-based AstraZeneca established its Aptium Oncology GI Cancer Consortium, which joins eight leading US academic institutions to speed up the testing of new compounds for patients with gastrointestinal cancers. And in the US, Eli Lilly’s Fully Integrated Pharmaceutical Network (FIPNet) collaborates with biotechnology firms and academic research centres in San Diego.

Meanwhile, ViiV Healthcare’s founders are finding other ways to work together in fulfilling needs outside the remit of the joint venture. Last month, the two companies agreed to provide long-term affordable supplies of pneumococcal vaccines to millions of infants and poor children in the developing world in an agreement with the GAVI Alliance, a global health partnership working to strengthen access to vaccines and boost health and immunization programmes worldwide.

©2010 The Economist Intelligence Unit Ltd. Created for GE's healthymagination