Sandoz Pharmaceuticals Corp. announced Thursday that it hassigned a 10-year, $300 million research alliance with theScripps Research Institute of La Jolla, Calif.

Under the terms of the agreement, Sandoz will provide Scrippswith research funding of more than $300 million over 10 yearsbeginning in 1997. In return, Sandoz of East Hanover, N.J., willreceive first rights to Scripps' medical discoveries. SandozPharmaceuticals Corp. is the U.S. subsidiary of Sandoz PharmaLtd., of Basel, Switzerland.

According to William Beers, Scripps' senior vice president, theinstitute was looking for a partnership to succeed theirrelationship with Johnson & Johnson which expires at the endof 1996. A New York investment banker familiar with bothScripps and Sandoz brought the two together.

Scripps will continue its relationship with J&J in some way, saidBeers, and the decision not to continue the existing situationwas "an issue of scientific fit."

"Scripps and Sandoz have a remarkable overlap in scientificinterests," added Beers. The alliance represents the first formalcollaboration between the two. During the "phase-in" periodbetween 1993 and 1997, Sandoz and Scripps will pursueundisclosed joint research projects.

The institute's expertise in immunology, central nervoussystem disorders and cardiovascular diseases, and its largechemistry group will give Sandoz access to technology it doesn'thave, as well as help the company keep up with withtechnological discoveries, said Beers."Scripps is a worldwide leader in basic research," said TimothyRothwell, Sandoz's president and chief executive officer, "andthis level of involvement gives Sandoz critical mass at aneminent academic institution."Scripps has a research staff of more than 650 scientists andphysicians and is the largest independent, non-profitbiomedical research center in the U.S. With an annual budget ofmore than $100 million, it gets approximately 72 percent of itsfunding from the National Institutes of Health, 12 percent fromindustry relationships and the remainder from othergovernment agencies and private foundations.

"We would never want to be less than 50 percent NIH-funded,"said Beers, "as the NIH's peer review process means we'restaying with state-of-the-art research."

Beers told BioWorld that the funding Scripps receives fromindustry alliances are generally unrestricted, which gives theinstitute "a lot of flexibility" to establish new research groups,such as its chemistry group.

For Sandoz, the Scripps agreement is the latest in a series thatincludes a 1991 10-year, $100 million oncology research program with the Dana-Farber Cancer Institute in Boston; Sandoz's 60 percentacquisition of SyStemix Inc. of Palo Alto, Calif., in December1991 worth $392 million; and collaborations with GeneticTherapy Inc. of Gaithersburg, Md., and Bio-Transplant ofBoston.

"It is encouraging that the pharmaceutical industry is willing tosupport academic research," said Richard Lerner, president ofScripps. "Many new and important drugs owe their origins todiscoveries made in the academic community, which, withoutindustrial contributions, would not be able to find their way tothe patient."

Scripps chose to align itself with established industry partnersand license its technology to these partners as a result of a lawpassed by Congress in the mid-'80s. The law stipulated that no patents would be issuedwithout proof that a valid product would be developed basedon the patented technology. As a result, many researchorganizations created research and development spinoffs topatent their technology.

-- Michelle Slade Associate Editor

(c) 1997 American Health Consultants. All rights reserved.

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