Alder and New Partner, Bristol, to Give Amgen and Abbott a Run for Their Money

11/11/09Follow @xconomy

Alder Biopharmaceuticals keeps such a low profile that even after five years in business, few people in Seattle biotech know who they are. That changed yesterday as the private Bothell, WA-based company burst onto the local, and national, biotech scene by striking a deal with Bristol-Myers Squibb that could be worth more than $1 billion over time to create a new drug for rheumatoid arthritis.

Alder obviously was playing with a strong hand of cards in negotiations with multiple pharmaceutical companies, even though it hasn’t yet disclosed the results of a 120-patient clinical trial of its ALD518 drug candidate that ended this summer. But Alder has been working behind the scenes for months on this deal, and there were several serious bidders, says CEO Randy Schatzman.

Alder ultimately chose Bristol-Myers (NYSE: BMY) because it has experience in the rheumatoid arthritis field through its FDA-approved abatacept (Orencia) therapy, deep pockets, and a “very aggressive” plan to develop and market Alder’s drug not just for rheumatoid arthritis, but for a variety of disorders in which the immune system attacks healthy tissue, Schatzman says. This means that Alder’s drug, which is made to block an inflammatory protein known as IL-6, is thought to have the same kind of far-reaching potential that other biotech drugs that interfere with a different inflammatory protein called TNF. This approach could offer doctors an alternative to the $10 billion-a-year class of biotech drugs, like Amgen’s etanercept (Enbrel) and Abbott Laboratories’ adalimumab (Humira).

When asked directly whether Alder’s clinical trial shows it is competitive with the Amgen (NASDAQ: AMGN) and Abbott (NYSE: ABT) drugs, Schatzman said this:

“We think we’re going to give them a run for their money.”

Seattle Genetics co-founder and CEO Clay Siegall, an Alder board member, added, “This is a superb deal. It gets Alder on a trajectory for becoming one of the important biotech companies in Seattle. They are turning from a startup into a real emerging company.”

To really emerge, Alder sought a partner that had more than just money, but also a bold view of the opportunities with ALD518 and how to capitalize on them. “Their vision is for the same development plan we’d have if we had deep pockets,” Schatzman says. “This is not just for rheumatoid arthritis, but for other autoimmune diseases in which IL-6 is an important player. It’s a very aggressive approach.”

Everyone outside the company will have to wait to see just how good the Alder drug really is. That’s because the company applied for a late-breaking presentation slot at last month’s … Next Page »

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