Sanford-Burnham Strikes Deal With J&J, Second Big Pharma Alliance in a Month

1/17/11Follow @xconomy

The Sanford-Burnham Medical Research Institute has struck its second big deal with a Big Pharma company in the past month.

The San Diego-based nonprofit is announcing today it has formed a new collaboration with Ortho-McNeil-Janssen Pharmaceuticals, a unit of Johnson & Johnson (NYSE: JNJ), to discover new drugs for Alzheimer’s disease and major psychiatric disorders. Financial terms aren’t being disclosed, but the collaboration is structured like a biotech alliance, in which Sanford-Burnham will get an upfront fee, support for its discovery research, milestone payments on success in drug development, and royalties on future product sales. Over time, this deal could be worth more than an $85 million alliance announced in November between UC San Francisco and Pfizer, says Pam Lord, a spokeswoman for the institute.

This new collaboration represents the latest sign of an ongoing trend in which Big Pharma companies are leaning on not just small biotech companies, but also academic centers, to be their fountains of innovation. UCSF, now led by the former president of Genentech, has struck recent deals with Pfizer and Bayer, while Sanford-Burnham has found new sources of support from Takeda Pharmaceuticals and J&J. The latest deal is a culmination of an effort that Sanford-Burnham president John Reed has pushed for the past couple years, to make sure that top-notch science eventually leads to new products to treat disease—not just more basic science.

“We’re really looking at how can we leverage what has been built at Sanford-Burnham over the past 10 years,” says Paul Laikind, the chief business officer of the institute. “It’s unique in my view, in terms of combining some of the best science out there with an entrepreneurial bent. We’re kind of between an academic institution and a biotech in terms of how we operate.”

Laikind knows more than most in academia about the nexus of science and entrepreneurship, given that he was previously a CEO at Metabasis. He was brought in to help bring some more business savvy and connections to the Sanford-Burnham back in October 2009, around the same time Reed tapped another key lieutenant from industry, Michael Jackson of Johnson & Johnson, to help make its discovery research more relevant to the folks in pharmaland.

Paul Laikind

Paul Laikind

Sanford-Burnham, Laikind says, has sought to apply its science a number of ways, partly through nurturing spinoff companies, but more through what he calls “thematic” partnerships with pharma companies that are focused on a therapeutic area. One example of this approach was revealed right after Christmas, when Sanford-Burnham announced it had formed a deal with Takeda to identify new molecular targets for the treatment of obesity. That is a two-year partnership which will involve Sanford-Burnham’s basic researchers in San Diego, some of its clinical researchers who see patients at a site in Florida, as well as a focused team from Takeda. It’s one of the largest and most ambitious discovery partnerships Takeda has ever done with an academic center, Laikind says.

The latest partnership with J&J builds on an institutional relationship that started about two years ago. The deal runs for three years, in which multi-disciplinary teams from the nonprofit and J&J will work together to find new compounds for Alzheimer’s and psychiatric disorders that could go into J&J’s pipeline for further development. One of the keys to the deal is Sanford-Burham’s expertise at the Conrad Prebys Center for Chemical Genomics, which has a lot of sophisticated tools for high speed drug discovery efforts.

It’s clear what both sides hope to get out of this kind of deal. Sanford-Burnham gets more financial support for its research at a time when federal grants are increasingly hard to come by. It also gets access to industry people with the know-how to carry its most promising programs forward to the marketplace. Ultimately, it’s about carrying forward projects beyond the research bench to the point where science can show it leads to tangible payoffs for human health. For its part, J&J hopes to find new targets and promising drug candidates for neurological disorders that represent big potential markets.

There are, of course, plenty of ways these deals can go off the rails. Academics often feel the need to publish their research findings widely to win further grant support and advance their careers, while industry scientists often want to keep their competitors in the dark about what they are really working on. There can be costly disputes over who owns the resulting intellectual property from drug discovery work, and how future revenue streams get divvied up, as the recent case between Novartis, the Dana-Farber Cancer Institute, and Gatekeeper Pharmaceuticals illustrates.

Laikind knows all about the potential potholes in the road, and has spent the past year trying to set up deals to avoid them.

“Having an industry team working side by side with our principal investigators gives us a real advantage in potential translating the science into actionable products,” Laikind says. “A lot of what I’ve focused on the past year has been on setting up interesting collaboration structures that allow us to move these projects forward in a concerted way, and get us through this Valley of Death we’re always facing where we can only take a project so far, and we need to take that next step where an investor, or companies, will take over.”

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  • arlene arky

    It all sounds great but how will this effect the hiring of scientist? Where will the jobs be created. Who will work on the development part to bring it into clinic.