Pfizer inks $7bn strategic level R&D deal with Flagship

Pfizer has just made venture capital firm Flagship Pioneering a key component of its R&D engine, signing a deal worth up to $7 billion that will allow it to harvest new drug candidates from the VC’s portfolio of biopharma companies.

The partnership will see Pfizer and Flagship put $50 million apiece into the development of up to 10 drug candidates, with Pfizer providing funding and getting opt-in rights. If it chooses to do so, Flagship and its companies will be eligible to receive up to $700 million in milestones plus royalties if the drugs reach the market.

The thrust of the alliance is to provide new drug candidates in Pfizer’s core therapeutic areas, which span oncology, inflammation and immunology, rare diseases, internal medicine, vaccines, and anti-infectives.

Flagship – which was behind the founding of mRNA specialist Moderna and is run by the biotech’s co-founder, Noubar Afeyan – has been making waves in the biotech sector in the last few years with its strategy of creating companies based on biopharma technology platforms, often putting its faith in high-risk ventures.

Its current portfolio consists of 45 companies, including Denali Therapeutics, Foghorn Therapeutics, Omega Therapeutics, Sana Biotechnology, and Seres Therapeutics.

Last year, Danish drugmaker Novo Nordisk formed a smaller alliance with Flagship to seek new medicines for cardiometabolic and rare diseases that was also focused on the VC’s portfolio companies. Both deals give the pharma groups the ability to assess technologies emerging from biotechs early on, while the biotechs get opportunities to partner with the multinationals.

Pfizer’s approach is slightly different, as it is tapping into Flagship’s Pioneering Medicines unit, which was set up in 2021 to harness the drug discovery platforms of the VC’s portfolio companies in therapeutic categories beyond their individual focus.

Taking a top-down view allows multiple platforms to be used in parallel as the companies build out their platforms to speed up drug development and patient access to new therapies.

Pioneering Medicines – which is led by former Bristol-Myers Squibb head of business development, Paul Biondi – will lead the hunt for new drug candidates across multiple therapeutic categories, including “broad patient populations and diseases with high potential to benefit from a diverse range of technology platforms and modalities,” said the two companies in a statement.

Biondi remarked that the partnership “brings together the best of our organisations to maximise discovery and development potential from inception to impact, through a unique innovation supply chain.”