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Pharma giant Pfizer is turning to venture firm Flagship for new drug development, signing a deal worth up to $7 billion to mine new medicines from the latter’s portfolio companies.

Flagship and Pfizer announced Tuesday that they will each put $50 million into developing up to 10 drug candidates. Pfizer will have first rights to acquire each for up to $700 million, plus royalties. Flagship’s portfolio companies will also share in any payments that come out of the partnership. 

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Flagship has historically developed new medicines by forming and spinning out startup companies, some of which have signed their own collaboration deals with the likes of Amgen or Nestlé Health Science. But in recent years, the firm has been pursuing external partnerships through a new business division called Pioneering Medicines, led by former Bristol Myers Squibb executive Paul Biondi. Pioneering Medicines uses technologies and other scientific platforms being developed by Flagship’s portfolio companies to look for possible therapies in disease areas that the startup may not be working in. 

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