The reason for the acquisition of Zymo was primarily for Zymos interferon alpha product to fight Hep C. The job cuts in Seattle are being made as BMS' moves out of the Hep C, neuroscience, and diabetes areas. One has to wonder what value is left in Zymogenetics? The individuals who are being cut apparently only had value in the Hep C space. They are not researchers. They are Hep C Zymogenetic workers.
I have long railed against the notion that a research professional is only valuable in the field in which they have been working. In a non-cargo-cult world a researcher is a cog in the machine that conducts research. Put ideas into the machine and out will come the results that are nothing-but-the-facts-ma'am. In this fantasy world, the researchers at Zymo would be given new research projects, not pink slips. Having the ability to move from Hep C to cancer to diabetes would create a research department that relies on the scientific method more than the cargo cult mentality. The researchers would be partners in ending things that need to end. When their careers end with their projects, they will act in their best interest, not the companies.
Right around the time BMS was sniffing around Zymo they had a team conducting due diligence on an anti-IL6 antibody from a small Bothell WA biotech called AlderBiopharmaceuticals. They paid Alder $85M with milestone payments up to $764M. In June of 2011 BMS paid Alder a $15M milestone payment for the launch of a phase II Rheumatoid Arthritis trial that they reported on last week (positively) with no mention of milestone payments. This could mean trouble for Alder. The workers at Alder are in a typical biotech quandary. Their jobs might be in jeopardy and there is nothing they can do. The lead candidate is the money maker. The rest of the pipeline is window dressing.
What would an Alder worker have to tell BMS if their job wasn't on the line? The diseases the IL-6 crowd fights are Rheumatoid Arthritis and cancer. Genentech already sells Actemra, which is an antibody against the IL-6 receptor. The BMS/Alder drug is different in two ways. It binds to IL-6, not the receptor of IL-6, and it is expressed in Pichia pastoris yeast. The norm in biopharma is expression in Chinese Hamster Ovarian (CHO) cells such as the CHO platform employed by Genentech for drugs like Actemra. If BMS and their anti-IL6 drug is going to compete, they will have to also compete with pricing. That means they will have to somehow compete with the CHO platform. Do the workers at a small biotech even understand what they are up against?
The claims at Alder: