To reduce such waste, the drug-making industry is turning increasingly to the Internet to trade intellectual property. Semiconductor and software makers have traded intellectual property on-line for years, but biotech has moved more slowly. Other intellectual property electronic exchanges are targeting the life sciences. Calif.-based BioStreet Inc. , operating since January, says it is already used by the top 20 pharmaceutical companies. A competitor, Newton-based ActiveCyte Inc. , has developed its own standard to display information about intellectual property, and was scheduled to begin a trial run this week with two pharmaceutical companies.
Some analysts are skeptical.
By its nature it's not tangible. There's just a lot of wasted energy in the matching process, just finding out who's got what, who's looking for what. For larger companies, exchanges are a way to reduce waste in their licensing businesses. About 10 of those could conceivably become something useful, like a drug, Mr. DuJardin says, and the costs of those Bayer decides not to develop show up in high drug prices. Experts say consolidation is inevitable.