A good find, Stuart. And this part was interesting:
When one compares the genomics-based alliances that each big pharma pair has brought to the table, it's clear that both complementarity and synergy exist. In all three cases -- SmithKline with Glaxo, Pfizer with Warner-Lambert and Pharmacia & Upjohn with Monsanto -- the most obvious overlap is Incyte Pharmaceuticals Inc., which has deals with five of the six pharmas. The company's genomic technologies include databases, data-management software and microarray-based gene expression services.
But Incyte has already built in provisions for this situation. According to CEO Roy Whitfield, "We take into account the size of the R&D budget of the company we're negotiating with. Generally, larger companies pay more than smaller ones. " As well, Incyte's contracts contain a "ratchet provision," such that if a subscriber company merges with a non-subscriber, the resulting subscription fee will be based on the R&D budget of the new company, he continued. And, if a subscriber merges with another subscriber, then "the contracts in place just carry on." Nonetheless, Whitfield says that Incyte's real customer base is not just the big pharmas (whether they merge or not) or even other biotech companies, but it encompasses "all medical research...The market is independent of the number of players."
Chase H&Q's Zisson added, "The real upside for Incyte is not the annual subscription fee [for access to its databases], but the royalties on drugs" that will eventually be developed as a result. "Over the long run, an Incyte-generated drug at Glaxo SmithKline or [the new] Pfizer will get to market faster," he said.
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