Discovery Partners and Pfizer terminate collaboration discussions

The new collaboration would have involved the continued provision by Discovery of pharmaceutically relevant chemical compounds and hit follow-up libraries for Pfizer’s exclusive use.

At the conclusion of the existing agreement with Pfizer, Discovery will have received approximately $92 million in revenues over the 2002 to 2005 time period, including $2.9 million in revenues during the fourth quarter of 2005.

Discovery expects to have a reduced need for combinatorial chemistry and library synthesis capacity because of the impending expiration of the deal with Pfizer. As a result the company is set to close all its operations in its South San Francisco facility except for the compound management operations during the first quarter of 2006, resulting in the relocation or termination of all employees not associated with the compound management operations at that facility.

The news comes soon after the announcement of the resignation of Discovery’s CEO Riccardo Pigliucci prompted by a “mutual difference of opinion with the board over the company’s strategic plans”.

“We are thankful for our 10-year relationship with Pfizer and its predecessor companies, Pharmacia & Upjohn and Parke-Davis, relationships from which we believe both companies benefited greatly,” stated acting CEO Dr Michael Venuti. “With the end of this collaboration, we will consolidate our chemistry resources into our San Diego facility and focus on drug discovery collaborations designed to produce higher-value preclinical compounds,” he concluded.