REDWOOD CITY, Calif.—Codexis Inc. announced recently the signing of a research agreement with Schering-Plough that will see the privately held company develop novel synthetic processes for the pharma giant. Under the terms of the agreement, Schering-Plough will fund the program, provide guidance on the product and process criteria that will need to be satisfied, and share relevant experience it has had with the chemical development of the target compound. Further financial details were not released.
Key to the deal will be the application of Codexis's MolecularBreeding platform for developing biocatalysts, typically enzymes that allow scientists to achieve chemistries that are unavailable or too costly by more traditional medicinal or organic chemistry methods. According to Tassos Gianakakos, senior vice president of business development at Codexis, the cost-savings in particular can be rather significant.
"We typically reduce the cost of manufacture by 40 to 60 percent over the alternative chemical process; typically capital expenses are reduced by over 35 percent," he says. "In addition, the speed at which one arrives at the 'optimal' process in increased by two- to five-fold."
Officials at Schering-Plough declined an invitation to provide comment, but the current collaboration correlates closely with the company's efforts to enhance its research and product portfolio through partnerships, as well as in-house efforts.
"We are working to build breadth and depth in our product and research portfolio both by capturing the full value of our internal innovations and actively seeking external licensing and partnering opportunities," said Fred Hassan, Schering-Plough chairman and CEO, in November-2005 comments on efforts to maximize value of the company's R&D investments.
"These actions support our goal of achieving a more diverse product mix to support long-term growth. We are also beginning the actions that will drive the next period of development of Schering-Plough—the period when we aspire to begin to deliver on our long-term goal of sustainable high performance."
The collaboration also provides Codexis with significant financial and technical leverage to enhance its position in the $3.7-billion global market for industrial enzymes, which is expected to grow by approximately 6.5 percent per year to 2009, according to July 2005 report by Freedonia Group.
And in establishing a collaborative agreement with Codexis, Schering-Plough joins the ranks of other pharma giants like Pfizer and Bristol-Myers Squibb, as well as niche players like Matrix Laboratories and Shasun Chemicals and Drugs Ltd., which each signed similar deals with Codexis in 2005.
Collaborative programs like these allow Codexis not only the ability to generate short-term revenue and provide the company the opportunity to earn milestone and royalty payments, Gianakakos says, but also help Codexis expand its biocatalytic reaction platforms. The company can then leverage these platforms on the development of other pharmaceutical compounds, either on its own behalf or for its partners.
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