Open Innovation: Is an Old Concept Ready for Prime Time?
By Lynn Yoffee
CHICAGO – Big pharmas and biotechs have been flirting with the concept of open innovation – collaborative sharing of data to speed up the drug development process – for years. In fact, it has been more hype than substance. Despite numerous hurdles, momentum seems to be building, especially in light of pharma's somewhat depleted pipeline and the trend toward more virtual and lean-model biotech start-ups, according to an international panel gathered here Monday morning in one of the many extracurricular meetings occurring in tandem with BIO 2013 International Convention.
For example, in February the Innovative Medicines Initiative (IMI) officially launched the European Lead Factory, a €196 million (US$266 million) project in which seven pharmas will make 300,000 compounds available for screening via an open platform. Academic and small company partners will have access to industry-quality high-throughput screening and speed the translation of new target biology through to drug leads. The project was funded by the European Union's R&D fund, Framework Programme 7, which will contribute €80 million in grant money with the balance coming from pharma company contributions and other sources. (See BioWorld Today, Feb. 8, 2013.)
But deals like these have been few and slow to gel.
"Trust, collaboration and a positive attitude from both universities and industry are increasing,' said Erik Forsberg, managing director of Uppsala BIO, a nonprofit focused on growing the life sciences sector in Sweden. "We see a large shift in industry. They are more interested in collaborations now."
Forsberg was part of a panel co-sponsored by business catalyst association One Nucleus, of Cambridge, UK, and Uppsala BIO, titled "The Role of Open Innovation in Successful Global Partnerships."
The CEO of London-based Virttu Biologics Ltd., Steven Powell, provided a more granular look at how his small biotech is approaching open innovation.
"Virttu came to open innovation out of necessity," Powell said, explaining that the firm's clinical strategy is to use its biologic combined with standard of care. In preclinical workup, they looked at out how a compound would behave with various other compounds. Virttu's oncolytic virus Seprehvir is a broad-spectrum product, which hasn't yet reached advanced stages of clinical development.
"We started to identify some findings and see synergy in potential to kill tumor cells," he said. "For a small company, it launched us into a big effort. We got to a point where the research team said we can't keep up. A complex matrix was built looking at combos of drugs. So we needed multiple collaborations."
So Virttu launched its own open innovation forum, dubbed Virttu REPLICATE, and now has 12 partners. All come with some expertise with small molecules. Other companies in the "club" can evaluate their therapies in combination with the oncolytic virus-based cancer therapy. Academics and clinical researchers get access to a growing database of research in oncolytic virus therapy. Virttu has the option of sharing data with other members – or not.
Twelve instant partners sounds good, but there have been challenges, including internal staff resistance to the concept, data management hurdles and legal issues related to intellectual property (IP).
"It's interesting; the guys [at Virttu] with strong academic roots were used to collaborations," Powell said. "Small company investors are worried about it despite the fact that new data could lead to significant finds." Even with the skepticism, Powell said "it's working."
Still a Foggy Concept
Gail Maderis, president and CEO of BayBio, northern California's life sciences association, said, "The way we think about this whole field is as being nebulous and not clearly defined, like the weather in the Bay area."
South San Francisco's cluster of biotechs has high-tech neighbors in Silicon Valley, which are more advanced in open innovation efforts. "We're trying to draw some lessons from that. But we do have some different challenges. It's been thrown around by pharma for years. Sometimes it's a way for companies just to have glorified material transfer agreements [MTA] to bring in more compounds for screening in the guise of open innovation, but it's really nothing more than screening."
She cited one big pharma effort that's truly in sync with open innovation: Bayer AG last year opened a Bay Area CoLaborator facility to house three or four start-ups. In return for low-cost lab space, the pharma will seek preferred access with the start-ups it supports.
"It's still in early days, but an interesting model," Maderis said, pointing out that the goal is to bridge entrepreneurial strength with the experience base of large pharma.
She said disease foundations are getting into the game, too. Organizations such as the Multiple Sclerosis Society or Mylan Repair Foundation are rethinking how they can leverage their dollars to get new therapies to patients. Rather than putting their money toward development of a single compound, they are providing the tools (new animal models, biomarkers, arrays, etc.) for biopharmas to develop drugs. The hope is that providing better tools will connect the dots between strong science and end products.
"Given the long history surrounding IP protection efforts, the first step of the process is to put an MTA in place that puts very specific parameters around who owns what IP and the protection of that. I haven't seen anything novel coming out of pharma yet around that. On the disease foundation side, they are more willing to provide access for things like the ability to use biomarkers and animal models."
As various organizations around the world cheerlead for the value of open innovation, they are working against a backdrop of an industry that's very asset-focused and at a low point in terms of risk aversion. "I'm not sure there's the fortitude within the pharmas alone," Maderis said. "There's a role for disease foundations to be the catalysts to bring academia and industry together."
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