Pharmas, Academia Seek to Bridge the Great Divide
By Marie Powers
CHICAGO – Small biotechs, already smarting from the stingy venture capital (VC) market and cutbacks in government funding, are looking nervously over their shoulder at the increasingly cozy relationship between big pharmas and academic institutions. And well they should.
In a Tuesday morning panel at the 2013 BIO International Convention, Roger Pomerantz, worldwide head of licensing and acquisitions at Merck & Co. Inc., of Whitehouse Station, N.J., and senior vice president of Merck Research Laboratories, said more than half of the 61 deals the company did last year – the most in its history – involved academic partners.
"We feel that when it comes to targets and target validation, academics have great aptitude," Pomerantz told a packed session. Beyond target validation, these partnerships can be a little "dodgy," he admitted, but the shortcomings haven't stopped the pharma from pursuing more integrated deals.
Jonathan MacQuitty, partner at the investment group Abingworth LLP, insisted the industry needs both big pharmas and VCs to bring early stage companies to fruition. Over the past 12 months, he said, two separate pharmas approached Abingworth to fund spinouts emerging from their academic collaborations. Although Abingworth typically invests at a later development stage, the involvement of big pharma with a discovery stage company changed the risk/reward dynamic, he said.
But is early stage discovery and drug development most efficiently handled by pharmas and academic institutions, which are positioned more for late-stage development and scientific exploration, respectively? And is their rush to the altar disrupting the traditional venture capital-backed biotech start-up model?
Ronald Lennox, partner at CHL Medical Partners, said nearly all of its biotech start-ups emerged from academia, and he suggested that pharma's involvement in driving early stage academic deals wasn't all positive.
"Sometimes we do collaborate in forming companies," Lennox acknowledged, but pharma companies also are competing with VCs for these deals. "There is some tension, and how that tension is resolved over time will be pretty important."
Chi Van Dang, director of the Abramson Cancer Center at the University of Pennsylvania, said the "driving force" for academic partnering is simply to find the best mechanism to move discoveries into the marketplace, where they can benefit patients.
"What you see at many places, including Penn, is exploring new ways to interact with the private sector on true collaborative ventures," Dang said. He cited Penn's $20 million deal with Novartis AG to develop and commercialize personalized immunotherapy in a variety of cancers using Penn's chimeric antigen receptor (CAR) technologies. The 2012 called for the partners to build the Center for Advanced Cellular Therapies on the Penn campus in Philadelphia to focus on the discovery, development and manufacturing of adoptive T-cell immunotherapies through a joint research and development program led by investigators from Penn, Novartis and the Novartis Institutes, with the pharma gaining an exclusive worldwide license to CAR-based therapies developed through the collaboration. (See BioWorld Today, Sept. 20, 2012.)
Intellectual property issues have thwarted past partnering efforts between pharmas and academia, but both sides have shown greater willingness to "take the knowledge base and core competencies on both sides and move the project down the field," Dang said, predicting that future partnering efforts will become "an iterative process, where both sides have a lot to say about progress of the programs."
Academic technology transfer offices also have ramped up their sophistication, sometimes talking term deals on a level that rivals or surpasses that of small biotechs. They see opportunities to fill the gaps in pharma pipelines, but they also recognize that pharmas are more proficient at monetizing ideas. Both sides need to come together to create value, Dang said.
Pomerantz agreed that academia offers many new ideas, but he insisted that big pharma is in the best position to develop tool compounds, study different medicinal chemistry approaches and scale up to multiple animal models." Moreover, all research universities are not created equal, according to Pomerantz, who said Merck funded the California Institute for Biomedical Research (Calibr) last year "to separate the wheat from the chaff and see what's ready for prime time." The accelerator is designed to fund translation of basic biomedical research into commercialized medicines. (See BioWorld Today, March 16, 2012.)
And issues of trust between pharmas and academia are not fully resolved. Dang said he's seen partnerships where an academic institution validated a target as a lead, only to see the pharma walk away to conduct its own experiments. Because drug discovery is a marathon, not a 100-yard dash, balancing short- and long-term return on investment remains problematic, he said.
Pomerantz agreed that "you can't build anything without trust." Moreover, even with an annual research budget that remains among the industry's highest, "we realize you can't spend your way into all the good molecules. You have to reach out."
Atul Saran, senior vice president of corporate development and ventures at MedImmune, part of London-based AstraZeneca plc, who spoke on a Monday panel on biotech partnering with academia, said the pharma/academia model doesn't threaten the role of biotechs in drug development. However, "we recognize that there's really good science outside our walls, as well," he told BioWorld Today. Pharmas, like biotechs, are committed to exploring new innovation in a variety of settings.
Although industry tends to focus on the "marquee" collaborations, "there are a number of little things that are happening on any given day," Saran added. MedImmune and AstraZeneca, combined, inked more than 500 collaborations with academia over the past two years, including sponsored research and material transfer agreements.
"If you're going to have scientific leadership, you can't isolate it within certain walls," he said. "You have to be able to branch out and have good dialogue with people across the industry."
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