Why Universities Are Key to the Future of Biotech, and How UCSF’s Chief is Showing the Way

10/3/11Follow @xconomy

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a part of the future of advancing health, Desmond-Hellmann says. Financially, these deals are small potatoes, and aren’t going to close any budget gap. Even if UCSF researchers made a breakthrough cancer drug that generates billions of sales per year, it would likely only throw off a royalty stream to the university worth a few million a year—nice, but not exactly a big deal for a multi-billion-dollar institution.

Instead, the collaborations are about improving the flow of basic research through development. Pharma companies need new products to preserve and grow their bottom lines, and they aren’t doing so hot at inventing them on their own. When budget cutters ask questions about how taxpayer dollars are spent on campus, academic centers need to be able to say something like, “We discovered a breakthrough drug that helps people live longer, better lives,” instead of just “We got a cool paper published in Nature.”

Unlike most university leaders, Desmond-Hellmann knows first-hand how much time, money, and risk is involved in creating something new to improve health. And she knows about the tensions between academia and industry. Academics rightly want to protect their academic freedom/right to publish research even when it has nothing to do with maximizing the sponsor’s revenue, or when it reflects negatively on a certain product. And businesspeople aren’t doing this for philanthropic reasons. They naturally want to see a return on their investment in the form of new product candidates.

It’s been easy in the past for both sides to go their separate ways. But the economy has taken a toll on both. Big Pharma R&D operations, rich as they may be, are feeling the same pressure to make cuts as universities. What’s needed now are the creative partnerships, where someone knowledgeable about the whole process (like maybe a Desmond-Hellmann) steps in and finds a way to more seamlessly bring together these two factions around what they have in common.

The old way of doing things doesn’t really work anymore. Often, some of the best research ideas would get handed off from academia to a company at a very raw stage of development. But few venture capitalists are funding startups at this early stage of development these days, and Big Pharma R&D has always tilted more heavily toward D than R. The economy has put more pressure on companies to tilt that balance even further away from research, and more toward late-stage development that has a chance to bear fruit in the near-term.

Universities need to recognize this is how things are. If they want to truly translate their innovations into products that help patients, they will have to carry the research a little further downfield themselves. Some Big Pharma companies have already shown they are willing to sponsor this kind of on campus work at UCSF and elsewhere.

Some academics sneer at this late-stage research/early-stage development work. It’s a cultural attitude Desmond-Hellmann wants to change. “There’s a technical competence in taking a discovery from a lab and turning it into a medicine. It’s embarrassing that people don’t honor that technical competence. You sometimes hear it called “applied” or “obvious” or some other pejoratives. But it’s my expertise. I do take that personally. There is a technical competence. It needs to be understood, put into curriculum, and valued.”

If Desmond-Hellmann can persuade her colleagues on campus to rally around this idea—that it’s about science that can impact health, not just science for the sake of more science and grants—then this initiative will be a huge success. Academia, after all, gave birth to the biotech industry in the first place during another decade of recession and malaise—the 1970s. Something equally big can be created now, despite all the economic challenges, if people in academia and industry can set aside some of their small differences and truly work together.

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