In the market for a drug candidate? Got one that’s been collecting dust on a virtual lab shelf? Mark your calendars for March 31, 2011, because a small molecule auction is comin’ to New York!
I’ve seen pharma companies auction off physical assets—ten thousand test tubes anyone?—and know some chemical companies have occasionally auctioned off technology IP. But the idea of a bunch of biotech executives with auction paddles and scientists in lab coats anxiously watching the price run up on their molecule was too strange to ignore. I gave one of the organizers, Thomas Reilly of the IP brokerage ICAP Ocean Tomo, a call to get a better sense of how the sales go down. It turns out the firm has been auctioning off technology-based intellectual property for several years and has seen an increase in pharma-related assets. Indeed, an auction taking place in Napa Valley in November has everything from “Using GPS technology to control the speed of a vehicle” to “A New and Safer Formulation of Zoledronic Acid.” The pharma small molecule auction will be the first of its kind for the agency, which is hoping to have at least 50 “lots” of compounds.
So you’re in the market for a drug candidate? The agency claims it performs due diligence on the assets for sale, looking at things like the scientific soundness of the compound and whether the IP is solid. There are two ways to bid: first, fill out a form to participate and head to New York in March. An auctioneer will read off lots and, as you might suspect, the highest bidder wins. Alternatively, if a company decides they want an asset in advance, they can make a pact for it before the auction begins—sort of like hitting the “Buy it Now” button on EBay. If you want that zoledronic acid formulation, by the way, it’ll run you $800k.
I’ll be curious to see where the molecules come from. There are certainly many big pharma companies with excess compounds, but whether they would be willing to open their lab notebooks for the due diligence required for these potentially anonymous buyers remains to be seen. Most of the biopharma sales in the November auction seem to be from academia or small biotechs. Stay tuned!
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