Industry-Academia Partnerships: Is Big Pharma Getting Riskier With Its R&D?
By Anna Rose Welch, Editorial & Community Director, Advancing RNA
There’s a new partnership under way in the quest for the long-sought-after cure for HIV. Last month, GSK teamed up with the University of North Carolina at Chapel Hill to form a research institute and a company dedicated to finding a cure for HIV and AIDS. GSK will shell out $4 million annually over the next five years to launch the research center on Chapel Hill’s campus.
In an industry that is no stranger to Big Pharma-academia research and licensing partnerships, this one in particular caught my attention. In this case, the two players will be launching a new company together called Qura Therapeutics. Ownership of that company will be split 50/50 between the two entities, and it will have future commercialization rights to any treatments that come out of the partnership.
In recent years, there has been a rising number of these partnerships, driven by cuts to academic research budgets, dwindling pipelines, and the pharma industry’s emphasis on open innovation. However, there are a number of challenges pharma and academia face when establishing their alliances, in particular aligning their different goals. For pharma, these partnerships are about gaining access to a molecule and academic investigators that can help establish “a clear path to the clinic.” Academia is driven by the goal of “publish or perish” (which can cause some IP concerns for pharma). Similarly, rather than focusing solely on the clinic as the end goal for a molecule, academia’s efforts are often directed toward determining how and why a drug did or didn’t work.
Perhaps this is why I’m so intrigued by GSK and UNC’s latest partnership; the decision to launch a jointly owned business suggests that the two parties were able to seamlessly combine research and business — in other words, that UNC is just as invested in the clear path to clinic as it is the science. From the outside at least, it appears that having separate goals has not been a stumbling block for these partners. I’m curious to see if other companies and schools will take the same partnership structure, and if this move puts to rest the argument that earlier academic research is not in line with pharma’s ultimate end goals.
I’m also encouraged by the fact that this business arrangement between GSK and UNC is not based around an already-existing candidate — a particularly brave choice for Big Pharma, especially in such a cautious R&D space. According to UNC Professor David Margolis, “We really feel like we are in the very beginning discovery phase. I can’t see something popping up that is going to be broadly successful in the next five to 10 years.” This isn’t exactly promising a quick (or any) return on investment for GSK.
Taking on a greater amount of risk in R&D by engaging in academic partnerships is certainly not a new phenomenon. According to a 2012 Burrill & Company report, the amount of money being earmarked for partnerships with biotechs had fallen from $22.7 billion in 2011 to $18.9 billion — a loss Burrill attributed to the increasing frequency of academic partnerships. This movement toward academia illuminates pharma’s increased tendency toward risk-taking, according to G. Steven Burrill, CEO of Burrill, who told The New York Times that, with this early-phase research, pharma is “going to own all of the development, both the risk and the cost.”
Could NIH Funding Also Become Pharma’s Problem?
NIH funding — often an important spigot for academic research — is a hot topic today, especially considering its budget is 20 percent smaller than it was 10 years ago, The NYT reported. (A bit of good news: The NIH could be facing a boost in funds, as the high-profile 21st Century Cures Initiative, which was recently passed by a House of Representatives committee, aims to funnel $10 billion more into NIH research by 2020.)
However, it’s also impossible to ignore some of the other voices in the industry and government that are concerned about the effects that fewer NIH resources could have on the industry. The NIH spends nearly $30.3 billion every year in medical research. Eighty percent of the NIH’s total funding is awarded as grants to researchers at 2,500 universities, medical schools, and research institutions globally. In looking at a breakdown of NIH spending, in 2014, the agency contributed $17.2 billion to higher education (these extramural awards include all grants and contracts).
What could fewer NIH funds mean for pharma as it continues to launch its academic partnerships? About a quarter of new drugs can be traced back to university research. It’s not a huge percentage, but still significant given the rising number of unmet health needs and pharma’s desire to fill its pipelines.
Earlier this year, the industry was less than pleased with Senator Elizabeth Warren’s proposal that law-breaking Big Pharma companies be partially responsible for boosting NIH funding for new research. There have also been arguments posed that increased philanthropy, dedicated funds for institutional investors, and a better system for the distribution of rewards following innovation could be answers to the NIH’s funding problem. In fact, the last option, proffered by University of Sussex Professor Mariana Mazzucato, argues (in brief) that the government should be entitled to a cut from the drugs that end up resulting from the government’s risky initial investment. Some of these funds could come from those companies that have benefitted from federally-funded discoveries — i.e. the drug companies that get a new drug on the market. (For a more comprehensive look at this argument, I suggest you read The NYT feature.)
While Mazzucato’s proposition might not carry the same weight as Senator Warren’s bill, it’s hard to ignore the fact that both of these proposals suggest pharma companies be partially responsible for boosting NIH funds. As pharma continues to gravitate toward university partners, it seems to me we could very well begin seeing more calls for industry responsibility to the NIH — whether it be some future version of Senator Warren’s bill or some variation of Mazzucato’s argument. If that should ever be the case, the greater reliance on university partnerships could turn out to be a riskier financial investment for pharma in an already costly R&D space.