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MRC Technology launches new name, investment to bridge the funding gap

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By Nuala Moran
Staff Writer

LONDON – MRC Technology, the technology commercialization arm of the UK Medical Research Council (MRC) is to become a major funder of research in its own right, investing an expected £500 million (US$636 million) of sales royalties from Merck & Co. Inc.’s Keytruda (pembrolizumab) over the next five years.

At the same time, MRC Technology will be renamed Lifearc, to reflect its aim of bridging the gap between MRC grant-funded academic research and new therapies. In particular, it intends to invest in forming and funding academic/industrial collaborations in antimicrobials, neurodegenerative diseases, cancer and respiratory disorders.

That represents a significant fillip in terms of the public funding of translational research. While there are government grants available from the Biomedical Catalyst and some charitable funding, notably from the Wellcome Trust, that money is directed at specific projects, not at whole areas of research.

Lifearc is eligible for Keytruda royalties in return for the work that MRC Technology scientists did to humanize the antibody.

Keytruda is on course to surge through the $2 billion sales barrier this year, with Merck reporting first-quarter sales of $584 million. That was before the checkpoint inhibitor became the first cancer drug to be approved for use solely on the presence of a molecular marker, without regard to tumor location. (See BioWorld Today, May 25, 2017.)

The plans have been in gestation since last July, when Lifearc sold a portion of its royalty interest in Keytruda to a private equity fund managed by DRI Capital for $150 million.

“We decided to take a slice of the royalties to de-risk, because at that stage it wasn’t clear what would happen in terms of sales,” said Mike Johnson, business development director. “We’ve never had anything like this magnitude of funding before; as a charity our income comes only from our own internal success with [advancing] drugs,” he told BioWorld.

That the use of Keytruda is expanding to new indications “is good because it means more revenue, but more so because more patients are getting access,” Johnson said.

As part of the £500 million investment, Lifearc is putting £30 million into a seed fund for academic research and a philanthropic fund to assist medical charities in commercializing their research.

“The seed fund will support very early proof of concept in any area. Projects will be risky but have the potential to be financially quite interesting,” said Johnson.

In the case of the philanthropic fund, Lifearc wants to help research charities to advance treatments for their patient groups but “is not expecting a return,” Johnson said.

In its former guise of MRC Technology, Lifearc has been responsible for commercializing MRC-funded research since 1998. It became a charity in 2011, giving it independence from the MRC, though continuing to fulfill its commercialization role. In 2012, it moved into offering services to third parties, and, in particular, medical charities.

Challenge-driven strategy

As MRC Technology, Lifearc was behind the spinout of companies, including Heptares Therapeutics Ltd., Ardana Bioscience Ltd. and Domantis Ltd., and in addition to Keytruda played a part in the discovery of drugs such as Actemra (tocilizumab, Roche Holding AG), Tysabri (natalizumab, Biogen Inc.) and Entyvio (vedolizumab, Takeda Pharmaceutical Co. Ltd.).

“We will continue to support and have the same relationship with the MRC, but whereas five to seven years ago 100 percent of our work was for them, it is now 10 percent, and we are scouting globally to find research,” said Johnson.

In the same time, Lifearc has grown to become one of the most significant independent technology transfer specialists in Europe, with 140 staff. Of those, 80 are scientists at its Center for Therapeutics Discovery, shaping up academic small-molecule and antibody programs to the point of attracting private capital.

“We have 80 scientists doing drug discovery and we could have used the money to double that number, but we don’t want to be like a pharma company,” Johnson said. “We want to address unmet medical need by working with partners.”

The research collaborations – or as Lifearc has it, “communities for impact,” – will be more driven by need than by what science is on offer. The approach is exemplified by the Dementia Research Consortium, a group involving Lifearc, the charity Alzheimer’s Research UK, Abbvie Inc., Lilly and Co. Inc., Merck and other companies, which aims to expedite new drugs by supporting academic research to find novel targets for neurodegeneration.

Another example is in antibiotics, where the MRC has spearheaded the formation of the Antimicrobial Resistance Funders’ Forum as a “war cabinet” to coordinate all U.K. publicly funded research. Johnson said Lifearc is talking to an array of global partners to move those research outputs forward.

“We will be more challenge-driven than science-driven, so we won’t fund program by program. Lifearc will be a catalyst, pulling people together; we could be project leaders if necessary, or we could be getting things off the ground and then standing back,” said Johnson.

Nor will there be a single model for funding. “We will work case-by-case. We will fund things other people won’t, or it may be a case of offering our expertise or access to our drug discovery resources,” Johnson said.

The overall aim is to plug all the gaps in the early stage funding environment. “It is about a new strategy, a new direction, new funding and new collaborations,” said Johnson.