Merck has set aside $400 million to buy a small biotechnology company, GlycoFi, that specialises in the use of fungi as biological factories for the production of protein drugs and vaccines, as well as $80 million for biologic drug discovery outfit Abmaxis.

The deals, which are due to close in the second quarter, mark a shift by Merck further into the biopharmaceutical arena, which at present is represented almost entirely by its vaccines portfolio, taking the drugmaker into the territory of monoclonal antibodies and other biotherapeutics. Chief executive Richard Clark recently said the company planned to make biotechnology acquisitions valued at ‘several billion dollars’ as part of an expansion in this area.

The deal with GlycoFi, a company with which Merck has been collaborating since December 2005, brings a new production technology for its vaccine portfolio and pipeline antibody drugs that should reduce the time and cost of reduces the time and cost of production and hike quality, according to Merck.

Currently, most therapeutic proteins require the use of mammalian cell lines in their production process, while vaccines are made either in cell culture or, more conventionally, in chicken eggs. Both these approaches are not only time-consuming, but also require a significant investment in manufacturing capacity.

One solution is to use non-mammalian cell lines, but an obstacle here is that these cells often are unable to replicate the complex pattern of sugar structures that line the outside of many therapeutic proteins (glycosylation).

GlycoFi – short for glycosylation fidelity - claims to have overcome this problem with its platform, which uses yeast and filamentous fungi cells as production vehicles.

If proteins such as monoclonal antibodies have the right glycosylation pattern, they will have a longer half-life in the body, bind more strongly to their targets and have greater bioavailability as a result of being targeted to specific tissues.

In 2003, scientists from GlycoFi and Dartmouth College, successfully re-engineered the glycosylation pathway in the yeast Pichia pastoris to allow the creation of a fully-human glycoprotein, extending work published earlier in the year which resulted in a hybrid protein. Earlier this year they scored another first achieving the first production of antibodies with human glycosylation in yeast (Nature Biotechnology, February issue).

Currently glycoproteins comprise about 70% of all approved therapeutic proteins and the therapeutic protein market is expected to grow at over 20% annually over the next decade.

The deal with Abmaxis adds to Merck research capabilities in biologics drugs, as the company has developed a technology for the engineering of monoclonal antibodies.

Merck also has a history of working with Abmaxis, and last October the latter company said it had successfully re-engineered one of Merck’s developmental antibody-based drugs, improving its binding affinity to its target more than 70-fold with no sacrifice in specificity.