The financial markets are having a tough time understanding the combination of biotech companies Enzon and NPS Pharmaceuticals, perhaps because it doesn't follow the typical rationale for intra-biotech mergers. That is, it doesn't join competitors working with similar technologies or disease states. Rather, the companies have little overlap, an attraction they argue will result in a balanced, somewhat synergistic product portfolio. Still, they face the challenge of convincing divergent investor groups--earnings-oriented shareholders of Enzon and growth-chasing investors in NPS--that the resulting new company wo'n't be a hodge-podge of diverse technologies.

Data mining start-up ReceptorBase Inc. has been validating its service model by prospecting GPCRs, a family of receptors known to hold more pharmaceutical riches than any other. Focusing on receptor protein function, the company applies empirical data from known small molecules to search out atomic binding sites. It then uses proprietary computational methods to predict compound designs that are mostly likely to hit the right target.

Summarizing the month in European dealmaking.

Start-ups bent on determining the 3D structures of proteins are trying to figure out the best ways to package their capabilities and data for sale to drugmakers. Growing numbers of commercial and academic researchers are seeking information about proteins--in particular structural information that influences how these important actors of the body function, and how drugs may fit them. X-ray crystallography is the gold-standard way of getting structural information, and a number of start-ups are gearing up to use the method on a larger scale than ever before. They want to sell the data to drugmakers to use in drug discovery, or better yet, form alliances to obtain and leverage the data-whose value in quantity is as yet unproven. Business models are still evolving: early plans to create databases are fading as firms acknowledge it will take time to accumulate quantities of structures and drugmakers already deluged with data demand actionable information. Service models may suffice temporarily, but won't provide much return in the long-term. Small start-ups are focusing on determining structures of known targets, or new but simple ones, while other better-capitalized companies lay bigger plans: encouraging drugmakers to look at unknown targets and learn more broadly, or to utilize multiple crystals. All the firms are getting involved in screening as a means of lead discovery. Companies starting up in the field of structure-based drug design are competing in the marketplace not only with each other, but against the availability of public data, and other crystal-free methods of gaining information about proteins.