AstraZeneca and Cambridge Antibody will launch at least 25 discovery programs to explore the utility of human monoclonal antibodies in treating inflammatory disorders. In connection with the deal, AstraZeneca agreed to pay $140 million to buy a 19.9% stake in Cambridge Antibody, providing the latter with some welcome capital. At the same time, the purchase will make AstraZeneca a major Cambridge Antibody shareholder along with Genzyme
Cambridge Antibody clearly has an established reputation when it comes to monoclonal antibodies. Besides alliances with AstraZeneca and Genzyme, the biotech outfit has licensing deals with several other companies. Cambridge Antibody's claim to fame, though, is that it helped develop Abbott Laboratories'
If it can avoid such messy conflicts, AstraZeneca seems likely to benefit from the new partnership. The research effort's $175 million price tag will be split between the two companies, meaning that $87.5 million of AstraZeneca's investment will go right back into the joint project. More importantly, the agreement allows the pharma outfit to leverage Cambridge Antibody's expertise in one of the most promising areas of biopharmaceuticals. The biotech company plans to commit 100 to 150 scientists per year to the program.
Still, Cambridge Antibody's spat with Abbott shows how alliances can go wrong. With Cambridge Antibody now answering to both AstraZeneca and Genzyme, problems may be hard to avoid.
Fool contributor Brian Gorman is a freelance writer living in Chicago. He does not own shares of any companies mentioned here.