Saegis Pharmaceuticals BIOTECH
By John Simons

(FORTUNE Magazine) – Half Moon Bay, Calif. Founded 1999

Saegis is out to find the "Viagra of the brain"--drugs that will treat everything from Alzheimer's disease to the natural forgetfulness that comes with old age--and has found an innovative way to conduct the quest. Instead of researching from the ground up, it buys compounds from increasingly risk-shy Big Pharma firms that have discontinued their research for either financial or tactical reasons. CEO Rodney Pearlman--the 52-year-old former head of R&D at Genentech--and his lean staff of eight acquired two of Saegis's most promising memory-enhancing treatments from Novartis and Lilly at yard-sale prices. (Both enter the final stage of clinical tests this spring.)

Once Saegis has the compounds, it sends them to labs around the country for heavy R&D lifting. The plan is to then sell or license them back to a marketing-savvy Big Pharma player. This smart middleman strategy helped to win the company a $30 million infusion of venture funding last winter from the likes of Technology Partners and Paris-based Sofinnova Partners. --John Simons