Alder Expands Partnership with Schering-Plough, Adds “Significant” Upfront Cash

Xconomy Seattle — 

Alder Biopharmaceuticals, the Bothell, WA-based developer of antibody drugs, is announcing today it has broadened its four-year-old partnership with Kenilworth, NJ-based drug giant Schering-Plough. The new deal calls for Alder to develop new targeted therapies against an undisclosed target on cells associated with a common neurological disease.

Financial terms of the deal aren’t being disclosed, but it provides upfront cash, milestone payments for success in development, and royalties on sales if Alder’s technology ever leads to an approved product for Schering-Plough. The money will provide a “significant” cash stream to Alder, and will pay the salaries of five workers at the company, says CEO Randy Schatzman. He wasn’t allowed to say which disease the drug is supposed to treat, although it represents “a very large market,” Schatzman says.

Alder struck its original partnership with Schering-Plough (NYSE: SGP) back in December 2005, with a primary goal of making 10 different antibody drug candidates, to prove its novel technique of making them in fast-dividing yeast cells was really as good as it was cracked up to be. Alder has said it can craft new antibody drugs in a matter of a few weeks, instead of a year with standard methods; its drugs ought to be effective at lower doses, require fewer injections, and could possibly be engineered to have fewer side effects.

Once Alder cleared a battery of scientific tests, Schering-Plough sent over one of its hardest problems—finding a way to make a drug against a novel marker on cells that no other drug could hit. If Alder can make a drug that truly blocks this target, it could tap into one of the more lucrative markets in the pharmaceutical industry. Antibody products are expected to generate $30 billion in worldwide sales in 2009, an annual growth expected of about 14 percent annual through 2012, according to Datamonitor.

“When they came to us for help, they had already thrown everything at it,” Schatzman says. “For better or worse, we’ve been getting their hardest targets.” Alder has been able to solve the problem in the lab, although he couldn’t get into specifics about how.

Alder now will be charged with whipping up a new batch of a variety of candidate antibody drugs against the target, that Schering-Plough can pick to run with in clinical trials.

Schering-Plough is best known for its consumer brands like the allergy pill Claritin, or Coppertone sunscreen, but it has had increasing interest in targeted antibody drugs over the years. The company owns European marketing rights to the blockbuster arthritis drug infliximab (Remicade) and another … Next Page »

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