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Less than two months after Genomica announced a change in strategic direction, resulting from disappointing market penetration of its third-party enterprise bioinformatics software, the company agreed to be acquired by Exelixis for $110 million in stock--precisely the amount of cash it was sitting on, making the deal in essence a back-door follow-on offering for Exelixis. The acquirer is therefore getting Genomica's software and technology base for a song, a fact that speaks volumes about the sustainability of a software-based bioinformatics business.
Quintiles is investing heavily in building a platform of web-enabled technology tools for clinical development that it hopes will nudge Big Pharma towards wider adoption of that technology and foster the kind of strategic partnerships that many see as crucial to the future health of the CRO industry.However, despite a consensus that the Internet will eventually revolutionize the way that clinical trials are done, there's also agreement that wide-spread adoption of web-based studies is a ways off.One likely reason that drug companies have moved slowly in this area is that they've been bombarded with pitches from start-up technology companies, promising to transform the clinical study process, but seemingly lacking the infrastructure and financial strength to assure that they can follow through on those promises.Quintiles is looking to use the critical mass of its own resources, and those of its partner, WebMD, to develop the scaleable, supportable, and enterprise-wide solution that it believes Pharma is waiting for. But even for Quintiles, pouring money into web-enabled processes that are unlikely to yield any near-term rewards won't rekindle interest among investors already disappointed by the continuing industry slump.Nonetheless, Quintiles will need to bear the short-term stock hit if it is to reap the possible long-term benefit of moving away from the increasingly low-margin fee-for-service model to one based on more lucrative partnering agreements in which it works with Pharma to re-tool clinical development.
Thanks to high throughput screening, more than 10,000 compounds with biological activity against specific targets are entering the drug discovery process each week. But unless those compounds can pass the hurdles of bioavailability and safety, comprising a series of tests known as ADMET (for absorption, metabolism, distribution, elimination and toxicity), they will never be successful drugs. Today, the tests that make up ADMET evaluation are low throughput, and are apparently not informative or accurate enough to predict a drug's probability of success, given the high failure rate of compounds at all stages of development. Drug discovery companies are therefore looking to re-engineer the ADMET process, moving it up the early discovery chain. The goal is to predict, very early in the process, perhaps even before compounds are synthesized, which compounds pass the test for a good drug. Doing so will require new assays, new computer models, and large volumes of consistent, high quality data on drugs in man, across diverse sets of chemistries. No one company has it all; partnerships and consortiums aim to bring together the necessary resources to integrate absorption, metabolism, and toxicity into a single platform.
The big three CROs--Quintiles, Parexel, & Covance have suffered contract cancellations, less-than-glowing earnings reports, and diving stock prices over the last 12 months. But, while the near-term continues to look fairly bleak, there's cause for hope on the horizon. CROs are increasingly seen as strategic partners, rather than as a means of handling overflow. And there's likely to be major opportunities for companies offering specialized services. One particularly promising area involves using the Internet to streamline R&D--for example, web-enabled clinical trials.
- Research, Analytical Equipment & Supplies