Argos Therapeutics Chief Scientific Officer Charles Nicolette spends much of his time seeking the millions needed to pay for clinical studies for what his company expects will become a breakthrough cancer immunotherapy treatment.

When you’re looking for money, you go where the drug development money is: The big pharmaceutical companies.

Durham-based Argos’ lead drug candidate is an experimental kidney cancer treatment that would be paired with an existing Pfizer (NYSE: PFE) cancer drug. Argos pitched Pfizer on its experimental treatment, AGS-003, hoping for a development partnership with the pharma to finance trials.

Pfizer loved the science, Nicolette said. But rather than pay a smaller amount of money up front in a partnership, Pfizer told Argos it would rather shell out millions for the technology after the treatment succeeded in clinical trials.

Partnership outreach efforts of other small pharma companies are encountering similar responses from risk-averse Big Pharma.

“There’s no appetite for them to put their neck on the line unless (a technology is) completely de-risked,” Nicolette said.

Nicolette was the keynote speaker for the NU Tech Roundtable, a technology transfer event on Oct. 4 hosted by the North Carolina technology transfer office of Nagoya University, Japan’s leading university for technology transfer. Nicolette discussed his observations on partnerships with Big Pharma and the different ways that licensors and licensees view such deals.

Pharmas are increasingly looking to reduce the risk of taking on assets that could fail in early or mid-stage clinical trials, Nicolette said. By waiting until a compound is ready for phase III or has even completed phase III, pharmas significantly reduce their licensing risk.

Nicolette’s observations are consistent with the annual dealmaker’s intentions survey conducted by Raleigh consultancy Campbell Alliance. The firm surveyed 160 licensing professionals at companies in North America and around the world asking about dealflow expectations for the 2012.

Last year was a “terrible, terrible year for deals,” Jeff Stewart, associate practice executive for Campbell Alliance, said during a recent presentation of the survey at the North Carolina Biotechnology Center. He added that so far, 2012 is not shaping up to be much better.

At phase I and phase II, companies who are trying to out-license technology and pharmas who want to in-license technology both had modest dealflow expectations, according to the Campbell Alliance survey. But when asked about phase III, differences became apparent. According to the survey, 39 percent of in-licensors expected an increase in deals for phase III compounds. Just 19 percent of out-licensors had such expectations.

Big pharma in-licensors, who have made deep cuts to their own R&D to save money, have become heavily reliant on licensing deals to fill depleted drug pipelines, Stewart said. They need phase III deals and their expectations for more of these deals was reflected in the responses. But out-licensors know their assets aren’t yet ready, or at least they are not yet de-risked. The market has a dearth of what pharma perceives as de-risked drug candidates.

Universities and small pharmas used to be able to reach deals where a pharmaceutical company would buy an early stage asset lock, stock and barrel. But the de-risking trend means that Big Pharma aims to structure deals in a way that pushes more risk onto the licensor. The payoff comes at the back-end of a deal — if and when a technology reaches development and commercialization milestones.

“The end (of a deal) is not the end,” Stewart said. “The end is just the beginning of waiting for your data to come out.”

Stewart said that oncology and cardiovascular continue to be among the top therapeutic areas where big pharmas are seeking licensing deals. That hunger means it’s a good time to be on the sell side of an asset, particularly for companies that have a technology in an area of interest to large pharmas, Nicolette said.

But even with a phase III-ready asset, Argos was unable to land a partnership deal. The company has pressed forward with AGS-003, the company’s experimental treatment for renal cell carcinoma. Argos company reported positive data coming out of phase II trials and last year filed plans for an initial public stock offering. But Argos earlier this year withdrew its $65 million IPO, citing market conditions.

Instead, Argos raised $25 million in April from its venture capital investors in a series D round. Proceeds will partially fund the phase 3 trials of AGS-003. A deal with Pfizer or another pharma will depend on the compound’s progress in the studies.

Nicolette said he does not think the R&D that has been cut from big pharma will ever return. Smaller biotechs are more nimble and better suited to discovering and developing new therapies. And now that big pharma has pushed both the work and the risk on to their smaller counterparts, they’re probably not going to take it back.

“I think we’re moving to a situation where large companies are nothing more than managers of licenses and contracts,” Nicolette said.