Millennium Pharmaceuticals (NASDAQ:MLNM) caused a stir in Sept. 1998 when it signed one of the most ambitious collaborations in biotech history with German health-care giant, Bayer AG (NYSE:BAY). The five-year alliance aimed to identify 225 novel drug targets, when the pharmaceutical world at the time was developing all its drug candidates from the same 500 targets. Drug targets are proteins regulated by genes that can be used to develop small molecule drugs.

Under the collaboration, Bayer invested $96 million in Millennium stock, paid a substantial sum in research and development, and agreed to share many drug targets. The companies focused on cardiovascular diseases, cancer, pain and viruses, among others. At best, Millennium was eligible to receive up to $465 million from Bayer, depending on research success.

The partnership expires this month, but today the companies announced it was "extraordinarily successful" (Bayer's words) and will be extended. During those five years, they identified more than 460 drug targets. Bayer advanced greater than 180 of the novel targets into various stages of research, while other targets delivered by the partnership remain in waiting.

Under the new agreement shared today, Bayer will retain access to as many as 280 of the targets for up to seven years. Thereafter, remaining drug targets will return to Millennium. Financial terms were not disclosed. From the initial alliance, Bayer has thus far moved two of the 180 novel targets into preclinical drug trials.

Overall, the partnership is a large feather in Millennium's cap, because -- unlike many biotechs -- it delivered on ambitious promises.

Approaching $200 million in annual drug sales and $500 million in total yearly revenue, Millennium is one of the 10 largest biotechs in the world. The company's market value has more than doubled in the last 12 months, to $5 billion, largely on approval of its breakthrough cancer drug, Velcade. Millennium has more than a dozen drug candidates in trials and models breakeven financial results by 2006. As with most biotechs, it's only for the speculative portion of one's portfolio.

Jeff Fischer has a stake in Millennium.