Double-digit royalties from the sales of an expected blockbuster allergy and asthma drug make Tanox a biotech player. But it still hasn't proven itself as a drug developer. Where does Tanox go from here?The company has a significant share of E25, a monoclonal antibody now under worldwide regulatory review as an asthma/allergy treatment. Tanox partnered its anti-IgE progam with Novartis (then Ciba-Geigy) in 1990. After Genentech disclosed its own anti-IgE program in 1993, triggering a lawsuit by Tanox and Novartis, the parties settled and Genentech also became a partner. The tripartite collaboration picked E25--Genentech's compound--for development a year later. Since then, Tanox's collaborators have shouldered the responsibility for commercialization of E25. It effectively lost the chance to build a commercial infrastructure around a major program and demonstrate its ability to manage late-stage product development. However, having large-company partners did enable Tanox to begin building a modest pipeline with early-stage in-licensed and homegrown products, including Hu 901, its own anti-IgE antibody now in human testing for severe peanut allergies. Tanox also significantly enhanced its power to partner when it went public in April, raising $226 million. It now sports a roughly $2 billion valuation. To drive growth and be more than a revenue stream for E25, however, management must now demonstrate a new range of deal-making and development capabilities.