In December, Celgene, of Summit, New Jersey, signed a deal potentially worth a whopping $3.3 billion for options on up to six anti-cancer stem cell products from OncoMed Pharmaceuticals, of Redwood City, California. Celgene initially became interested in one of OncoMed's lead products, demcizumab—a monoclonal antibody that targets Delta-like ligand 4, an activator of Notch signaling, known to be important in stem cells and cancer—because of its potential to work in combination with Celgene's chemotherapy Abraxane (nab-paclitaxel). But George Golumbeski, senior vice president of business development at Celgene, says they soon realized OncoMed has “a wonderfully effective drug discovery group.” Wells Fargo analyst Brian Abrahams characterizes the up-front payment of $177.25 million, including a $22.25-million equity investment in OncoMed, as “substantial,” but notes that Celgene is getting multiple shots on goal for the initial payment. Although most of the deal is for preclinical compounds and only demcizumab is in phase 2b trials, Golumbeski defends the up-front payment, noting it's “in line with what's been paid for similar assets at similar stages.” The investment in OncoMed's promising-but-unproven cancer stem cell targets highlights Celgene's broader strategy of investing in innovation. In November, Celgene established a collaboration with Versant Ventures, of Menlo Park, California, to license or acquire products developed by Versant's biotech incubator Blueline Bioscience, which will license technology in Celgene's core focuses of oncology and inflammatory diseases out of research centers in Toronto. “We were really struck by how much good work is going on there,” Golumbeski says. In New York, Celgene seeded a fund to invest in startups with Eli Lilly, of Indianapolis, and GE Ventures, of Fairfield, Connecticut. The collaboration pools a total of $50 million from the three companies and the public-private New York Economic Development Corporation with another $50 million from venture capital partners. The funding doesn't give Celgene rights to products developed by the startups, but comes with increased access to innovation at the New York medical centers where the startups will be spun out from. “With or without rights, that kind of closeness has always been to our advantage,” Golumbeski said. Celgene hasn't acquired a marketed product since its 2010 acquisition of Los Angeles-based Abraxis BioSciences, but Golumbeski said the biotech has looked at late-stage compounds because, “The deals that get done tend to be more a function of what gets through our diligence process.”