FLAGSHIP PIONEERING PARTNERS WITH PFIZER ON 10 DRUG PROGRAMS

Flagship Pioneering, a Cambridge firm that creates and funds biotech startups, said Tuesday that it struck a partnership with pharma giant Pfizer to jointly launch drug programs and bankroll new experimental medicines. Under the deal, the two firms will each invest $50 million in 10 drug programs, drawing on technology in the portfolios of the 40-plus startups backed by Flagship. Pfizer, the world’s largest drug company by 2022 revenue, will have the option to acquire each of the jointly funded programs. Flagship and its startups, meanwhile, will be eligible for up to $700 million in royalties and milestone payments from Pfizer for jointly developed medicines that make it to the commercial market. The experimental treatments will be separate from those now in development at the Flagship companies. The arrangement is similar to other business development partnerships between big drug companies and smaller biotechs.

But unlike many of those deals, which use pharma cash to fuel drug development at startups, the two companies in this deal are pooling investments. A three-year-old Flagship affiliate called Pioneering Medicines will work with Pfizer’s research leaders to identify and advance drug candidates, launching drug programs with a separate legal structure but piggybacking on the research capabilities of Flagship’s startups. The focus will be on drugs that fit within Pfizer’s strategic areas of interest, including oncology, immunology, and treatments for broad patient populations. — ROBERT WEISMAN