Looking for the next big thing in biotechnology? Well, Wyeth (NYSE:WYE) may just have found it in a private Seattle firm.

Wyeth announced today that it has formed an alliance with Trubion Pharmaceuticals to discover, develop, and commercialize medicines for inflammatory disease and cancer based on the privately held company's small modular immuno-pharmaceutical (SMIP) technology. The alliance will concentrate on candidates targeting CD-20, a protein on the surface of B-lymphocytes. The focus of the SMIPs is nothing new -- CD-20 is an established target. Rituxan, a drug approved to treat non-Hodgkins lymphoma and marketed by Genentech (NYSE:DNA) and Motley Fool Stock Advisor pick Biogen-Idec (NASDAQ:BIIB), likewise aims at this receptor.

What is unique, though, is the structure of SMIPs. Rituxan is a monoclonal antibody, a bioengineered version of the antibodies that are a layer in the body's immune defense. By contrast, SMIPs, including TRU-015, the phase 2 candidate for rheumatoid arthritis and B-cell cancers on which Wyeth and Trubion will first collaborate, are individual molecules assembled from parts of proteins.

SMIPs are somewhat similar in structure to monoclonal antibodies, but half the size. As a result, SMIPs may get around some problems associated with monoclonal antibodies. For example, SMIPs are less likely to clump together, a property that leads to monoclonal antibodies' side effects and likely contributes to immunogenicity -- the provocation of an immune response against the antibody itself. In addition, SMIPs' small size could allow them to reach sites not available to larger molecules.

Of course, as with all things in the biotechnology realm, Wyeth's investment has to be approached with caution. It took years for companies to get monoclonal antibodies right, so SMIPs may also experience setbacks or, worse yet, never achieve success.

But the people at Trubion are no strangers to drug development. Several of them worked on Enbrel, the monoclonal antibody for rheumatoid arthritis now marketed by Wyeth and Amgen (NASDAQ:AMGN). And Wyeth appears to have a lot of confidence in the technology, as reflected in its initial $40 million investment in Trubion and the pharma giant's commitment of up to $800 million based on achievement of milestones. This collaboration is definitely worth monitoring.

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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.