S.D. Biotech Firm, Norwegian Company Enter Accord

Telios Pharmaceuticals, which earlier forged a strategic research and marketing alliance with a major Japanese pharmaceutical company, on Monday announced a similar arrangement with a Norwegian petrochemical company.

Biotech industry analysts on Monday said the agreement was designed to help Telios, a fledgling biotech company, bolster its immediate cash supply and establish a long-term presence in the European market.

Telios is forming Telios Pharma GmbH, a joint venture that will be partly owned by Oslo, Norway-based Norsk Hydro AS, a major petrochemical company. The joint venture, which will be located in Dusseldorf, Germany, will focus on the clinical development of Telios’ products.

Norsk Hydro will provide the joint venture with an unspecified amount of capital and make an equity investment in Telios. The La Jolla-based firm will provide proprietary technology but retain the rights to products that eventually are marketed in Europe.

The agreement is one of a growing number to link small, U.S.-based biotechnology companies with large, international partners.

“There have been a number of joint ventures (and acquisitions) over the last year,” said Pamela Bridgen, executive director of the Washington-based Assn. of Biotechnology Companies. Most deals involve small, capital-hungry U.S. biotechnology companies and cash-rich European companies, Bridgen said.

“The trend is there,” said Leo Kim, executive vice president of Mycogen, a San Diego-based company that is developing and marketing agricultural biopesticides. Mycogen has completed research, development and marketing agreements with companies in Japan and Europe in recent years.

“There’s a globalization of the industry under way,” Kim said. Small companies “can’t just think local” and ignore markets elsewhere in the world, Kim said. “You might as well get the patents worldwide if you have something that’s really high-tech and unique,” Kim said.

Analysts said the number of agreements crafted by U.S. biotechnology companies probably will increase before Jan. 1, 1992, as European companies position themselves for the advent of the planned European Common Market.

But agreements along the lines of Telios’ deal with Norsk Hyrdo generally are driven by a need for cash.

“There’s a lot of companies in the U.S. that are getting low on money, but there are European companies with money to invest,” Bridgen said. “The downturn in the economy is here (in the U.S.), but not yet in Europe, which is still going quite strong.”

Telios earlier had aligned itself with Ono Pharmaceutical Co. Ltd., a Japanese company that is helping to commercialize several Telios products.

Founded in 1987, La Jolla-based Telios Pharmaceuticals is developing therapeutic products designed to help the human body heal itself and combat disease.

Norsk Hydro, founded in 1905, is one of Norway’s largest companies. It has more than 33,000 employees and reported $11 billion in 1989 revenue.