This article was originally published in Start Up
In Iceland, public debate has broken out about deCode Genetics' commercial rights to a database of medical information about the country's population. Will Roche, which in 1998 signed a $200+ million agreement with deCode to pursue genetic leads into cardiovascular neurological and metabolic diseases, get all it bargained for?
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Roche Diagnostics has signed a new five-year-alliance with deCode Genetics, in a move that suggests the preliminary success of an earlier agreement between the companies. While the earlier deal, signed in 1998, revolves around finding pharmaceutical targets, the new agreement aims to identify and validate diagnostics targets based on genes associated with common diseases.
Given the ho-hum attitude investors have shown toward population genetics, Xenon Genetics' $45 million private placement is notable. Now that the dust has settled on two of the older companies in the field, deCode Genetics and Gemini Genomics, which went public in July 2000, it is clear that the market gives them little technology value. But Xenon believes it can differentiate itself by the breadth of its data, which come from 28 populations, and its product-oriented approach.
Outsourcing is not just for mundane pharma services anymore. Increasingly, drugmakers are contracting for specialized R&D assistance they expect to provide strategic as well as tactical advantages.