The mouse that roared

Taconic Farms gets “complete offering” by purchasing a majority stake in company that genetically engineers mice

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GERMANTOWN, N.Y.—Taconic Farms Inc. recently reached an agreement to buy an 80.1 percent stake in Artemis Pharmaceuticals GmbH from Artemis' parent company, South San Francisco-based Exelixis Inc. With the deal, Artemis has now changed its name to TaconicArtemis GmbH.

Artemis has expertise in the research, development and commercialization of genetically engineered mouse models and engineered mouse embryonic stem cells for drug discovery and academic research. Taconic provides licensing, breeding and distribution of genetically modified models, primarily for drug discovery efforts. The deal is key in Taconic's strategic goals to fill gaps in its expertise and offerings.

"This event is really a tipping point or catalyst for Taconic to progress from being a provider of products and some core services to researchers, to being a provider of expertise and becoming a partner with researchers so that they can complete their studies much more efficiently," says Sam Phelan, CEO of Taconic.

He adds that Artemis represents a group of scientists who are familiar with, and can adeptly employ, virtually all of the techniques that are used to manipulate the genome.
"They are excellent at that and that is an expertise Taconic hadn't previously possessed," Phelan explains. "The expertise we have that they didn't is to take that organism they create—namely a genetically engineered mouse—and characterize that animal in terms of other genetic components, health, environment and other key characteristics, and then distribute that "ready-to-use" animal to researchers."

So why not just buy the company outright? Phelan says that some good relationships are firmly in place between existing managers at Exelixis and Artemis and thus there is know-how from that relationship that will be valuable in the future.

"Also, Exelixis still has need for the various technologies and other expertise that are resident at Artemis, and they didn't want to lose the very close association they have with those, so they wanted to maintain some level of ownership," he continues.

Changes will occur, but they will be reciprocal, Phelan stresses, with both Taconic and Artemis making adjustments. One of the first changes is that Peter Stadler, CEO of Artemis, will soon head up the R&D group at Taconic. Artemis has a scientific team in Cologne, Phelan says, and Taconic has a number of scientists who are expert in areas such as microbiology, mammalian genetics, protein chemistry and molecular biology.

"But they're all serving specific functions and we want to pull the entire scientific team together and use that core expertise to develop new processes, technologies and products," Phelan notes, discussing Stadler's new role. "The other change that will be happening soon is that customers will see the Taconic face more consistently when they're looking at the offerings and capabilities of Artemis."

The recent deal was perhaps a couple years in the making. In 2005, Artemis and Taconic established a strategic alliance which combined Artemis' technology platform in mouse genetics and genomics with Taconic's skills in breeding mice and rats, quality control and global marketing and distribution.

"Artemis has established a leading position in the generation of sophisticated mouse models. Taconic is one of the world's leading suppliers of mice," says Dr. George A. Scangos, president and CEO of Exelixis. "Artemis' capabilities will allow Taconic to provide a broader line of mice to its customers and to rapidly generate custom-made models for its customers as well."

As for future plans to flesh out Taconic's offerings, Phelan says there are many possibilities but no specifics in mind right now.

"Certainly, there are some gaps we have in our total vision to provide full service to the industry for performing in vivo studies," he notes. "We may look at companies soon that show promise in one or more of those areas, and we might acquire a company or a stake in one, or simply enter into partnership deals. We'll take that on a case-by-case basis though."

Some of those gaps that Taconic seeks to fill include phenotyping of mice, developing unique capabilities using mice as a model, identifying unique types of genetically engineered mice, and seeking novel manipulations of mice that could lead to new assays for use in compound profiling.


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