Pfizer to Buy Rinat, a Biotechnology Drug Maker

Apr 07 2006

NEW YORK CITY, New York and SOUTH SAN FRANCISCO, California—Pfizer said yesterday that it would acquire Rinat Neuroscience, a privately held company developing drugs for pain, Alzheimer’s disease and other neurological disorders, to move further into biotechnology.

Terms of the deal were not announced, though Pfizer is believed to be paying several hundred million dollars.

Pfizer and other big drug companies have been racing to acquire biotechnology companies or their products to bolster internal drug development efforts as older products lose patent protection and restrict growth. Pfizer said in February that its sales for this year would be about even with last year’s.

Last year Pfizer paid $1.9 billion for Vicuron Pharmaceuticals, a developer of anti-infective drugs. It also acquired Idun Pharmaceuticals and Angiosyn.

Ronald W. Eastman, chief executive of Rinat, said the company began to seek a big pharmaceutical partner about a year ago to develop its Alzheimer’s drug. It got nine offers but discussions turned to the possibility of an acquisition instead.

Rinat, which is based in South San Francisco, Calif., is developing protein-based therapeutics, such as monoclonal antibodies, which must be injected. That is a bit of a departure from Pfizer’s traditional focus on pills, which are made of chemicals.

Rinat’s lead product, RN624, has just started the second of three phases of clinical trials as a treatment for osteoarthritis pain.

Pfizer, however, appears to be more interested in Rinat’s Alzheimer’s drug, RN1219. It is a monoclonal antibody that blocks the amyloid beta peptide, which is believed to contribute to the buildup of plaque in the brain and the death of nerve cells. The drug is about to enter the first stage of clinical trials.

Other companies, like Myriad Genetics and Elan, are ahead of Rinat in testing drugs that interfere with amyloid beta in some fashion, though they work somewhat differently.

Rinat was founded in 2001 when Genentech granted it a license to its neuroscience assets. Genentech was collaborating with Rinat on the pain drug but dropped out in December after the drug did not show much promise for treating pain after surgery.