Pharma-Academic Alliances: What the Numbers Don’t Tell You

5/10/11

If you’ve been following the drug industry at all for the past few years, you know that Big Pharma has gone alliance crazy.

It seems that every other week a new deal is announced in which a pharmaceutical company has partnered with an academic institution to help identify or develop new drugs for a variety of diseases. Pharma business news these days is often indistinguishable from the sports section. When you read that someone has inked a $36 million, six-year contract, it could be referring to a relief pitcher signing with the Yankees or a biology department’s deal with Pfizer. Let’s review some recent examples to see how these deals are coming together.

Gilead Sciences signed a cancer research deal with the Yale School of Medicine that could pay the School $100 million over 10 years. Sanofi-Aventis recently announced a three-year diabetes research deal with an investigator at Columbia University (funding not disclosed) as well as a translational research agreement with Harvard University (funding not disclosed). UCSF in particular has gone on a partnering tear, inking deals with Sanofi-Aventis (financing amount not disclosed), Pfizer (up to $85 million over five years), and Bayer Healthcare (financial terms not disclosed). GlaxoSmithKline signed Harvard’s Stem Cell Institute to a 5 year, $25 million deal. In addition, GlaxoSmithKline announced a plan to sign up 10 academic “superstars” for long-term partnerships to develop new medicines. Their first choice, Prof. Mark Pepys at the Royal Free and University College Medical School in London, colorfully acknowledged this new arrangement by commenting “we all agree that big pharma is useless at discovering new drugs and has to get its ideas from somewhere else.” I’m sure this remark was well received by the company’s leadership group. Over on the more tech side of biotech, Agilent Technologies signed the new Synthetic Biology Institute at UC-Berkeley to a “multiyear, multimillion-dollar commitment”.

In decades past, academic-industry collaborations generally comprised agreements with individual investigators at specific universities and research organizations. More recently, however, this process has metamorphosized into agreements where pharma has established alliances with entire departments or research institutions. What’s the difference between a collaboration and an alliance? While many people use these terms interchangeably, I see a clear distinction. In general, a collaboration is established when (usually two) partners decide to work together on a specific, well defined project to answer a specific question. Once the project is completed, the collaboration is essentially done (although publications and presentations may still be in the works). Alliances, in contrast, tend to be more open ended, larger in scope, involve many more people, and often lack fully defined, detailed goals at the outset. Key decisions may not get made until the work progresses to a certain decision point, which may be accompanied by a “right of first refusal” to any discovery. As such, alliances generally require a significantly greater level of management skill than collaborations if they are to be successful.

What’s driving this sudden surge of pharma-academia deals? The primary motivator appears to be the shortage of new drugs coming out of Big Pharma’s research labs. Despite increasing their investments in research and development over the past decade, Big Pharma’s hoped for steady stream of new medicines is down to a trickle. Part of this results from a past focus by Big Pharma on developing “me, too” drugs for targets that have already been validated by competitors. For example, it was reported in 2006 that 77 percent of the drugs approved by the FDA for neurological indications during the proceeding five years were copycat medicines. Accordingly, many Big Pharma executives have belatedly decided that it’s time to try a fresh approach. They understand now that their own research investigations, while significant, are but a small fraction of the total world effort.

The new tactic: engage academic labs as an alternative source of … Next Page »

Stewart Lyman is Owner and Manager of Lyman BioPharma Consulting LLC in Seattle. He provides strategic advice to clients on their research programs, collaboration management issues, as well as preclinical data reviews. Follow @

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  • K Brasel

    For myself, the main question is how do these arrangements with public, non-profit institutions (Universities) remain private? Isn’t there a mechanism for those documents to be released to the public (who paid for them)?

  • http://qb3.org regis kelly

    Stewart Lyman makes a profession out of consulting with academia and industries about alliance formation. Nonetheless he seems to be deeply concerned that “Big Pharma has gone alliance crazy”.
    It is hard to know why he is so incensed. Everyone, including Lyman, knows that Big Pharma is looking around for new models and knows why. His main concern seems to be the classic one for angry letter writers – “If I do not know the details then I will assume that bad things are being done”
    I have been involved in several of the UCSF deals mentioned by Lyman. As an academic researcher completely committed to improving human health, I can assure Lyman that these deals were made because we believed that we could advance human health better by making them than by staying in our ivory towers. Academics like myself are great at discovery but are frequently embarrassingly ignorant of the useful applications of our discoveries. Alliances with Pharma can bring the knowledge of society needs that we lack. It may be hard for Lyman to believe but it was NOT about the money.
    While no doubt lacking Lyman’s years of experience in negotiating alliance deals, we are not fools and we get very good advice in making such deals from many local experts who provide pro bono help. In addition the University of California has very strong guidelines to make sure that any agreement made with a company does not damage our educational mission or imperil our reputation for objectivity.
    If he wanted his seven questions answered, why didn’t he just call? The answers are not secret.
    Finally the old concern about NIH funding being misused for commercial purposes should be allayed by reading bullet point three of NIH’s mission statement. Surprisingly few have.

  • http://www.lymanbiopharma.com Stewart Lyman

    It is indeed a pleasure to have Regis Kelly, director of the California Institute for Quantitative Biological Research (QB3) respond to my article. I don’t personally know him, or I might have called him (had I known he was the person to ask) to have the questions I posed in my article answered. I appreciate his commitment to translational research and hope that the mission of his organization is successful. While he accuses me of being an “angry letter writer” for asking what I (and others) thought were some pertinent questions, his response failed to answer the questions raised. I invite him to post his answers to the seven questions that I put forth to educate both myself and Xconomy readers on how these agreements come together. That way, researchers throughout the country will understand how your deal was structured and have a basis for comparison to the one’s that their own institutions may have entered into or are considering. And if the deal was not about the money, as you indicate, I would be happy to provide you with some suggestions for organizations that could put in to good use. You can even keep the money local and focused on translational research. Perhaps the Institute for One World Health in SF would welcome some additional funding?

    While you take me to task for raising these questions, others I have heard from have offered different opinions and tell me that they have spent considerable time discussing the very issues that I brought up for discussion. And I’m not sure why you accuse me of being “incensed” just because I have the temerity to ask some questions about these deals. As we know, the devil is in the details, and UCSF, where Regis works, is associated with one of the saddest past chapters of pharma-academic dealings, the Boots Synthroid affair. This story has been well documented and I direct readers to the original story published in the Wall Street Journal in 1996 “How a drug firm paid for a university study, then undermined it”, or any of the review articles that covered this case (see Science 273, p 411, 1996 for an editorial reviewing the matter). Essentially, a UCSF researcher was hired to do a basic research project for the Boots Pharmaceutical company. When the company did not like the published results, it forced the authors to retract an article describing their work and, according to the Science article, “brought the university to its knees with threats of a protracted lawsuit”. One of the key points was that the researcher had ignored a clause in a 21-page research contract that required the company to review any papers before they were published. UCSF policy at the time would not have allowed the contract to be signed, but the researcher signed it anyway. Derek Bok, former President of Harvard, is quoted in the Science piece as saying “the price of corporate support is eternal vigilance.” No doubt that many universities and research institutions, including UCSF, revised and tightened their protocols for entering into these types of agreements after this affair became known. Pharma and biotech organizations used to make do with the signature of just the researcher that they wanted to work with, but a sign-off by university officials is now standard protocol in material transfer agreements.

    It certainly makes sense for pharma and biotech to work with academic researchers to improve the drug discovery and development process. When I worked in biotech, I personally set up well over one hundred collaborations with academics to facilitate our getting a clear understanding of the biology of the proteins encoded by the novel genes I had cloned. Amazingly enough, the vast majority (>99%) of these deals were done without providing the investigators with a single dime of support (they were simply supplied with the new protein or a cDNA for their experiments).

    Let’s see if we can get other academic researchers to weigh in with their thoughts about these agreements. Are there any concerns? Have their been any problems? Is this all really a non-issue?

  • http://qb3.org regis kelly

    After I claimed that there were no secret dealings involved in the alliances I have knowledge of, I was challenged to provide the answers to the seven questions that were raised. To be as accurate as possible I will base my answers on the collaboration that QB3 has with Pfizer and which I know the best.
    1. Who decides? A steering committee of UCSF and Pfizer scientists choose from submitted non-confidential applications.
    2. Who authorizes? The steering committee decides.
    3. Choice of projects? The steering committee chooses from submitted applications and does not specify the science in the projects.
    4. Exclusivity? A pharma company would not be comfortable working with an academic partner who is exploring the same target for another pharma company.
    5. Tenure? A sponsored research agreement with Pfizer brings in indirect costs at the same level as NIH funding. To the extent that tenure is given on the basis of the ability to attract funding of any sort, an industry sponsored research agreement could contribute positively towards tenure. I do not know if we have any statistics on the influence of sponsored resaerch agreements on the tenure process, negative or positive.
    6. Review of papers? Sponsors do have the right to review manuscripts describing the research they have funded several weeks in advance of publication. Usually this is done while the manuscript is still in an early stage of composition in order not to slow down the publication process.
    7. Intellectual property based on research in university labs supported by industry still belongs to the University of California. Out technology transfer agents will encourage disclosure and patent filing on potentially commercializable research, which can slow down the publication process. Thus, filing of patents can indeed result in a slow down in publication of results, but this is true whther it is funded by industry or the NIH. I am not aware of any difference that depends on funding source.
    I hope this helps you and other readers of Xconomy understand the process a little more clearly.
    I wonder if some of the confusion may come from the assumption that an “$85 milion award”, for example, comes with a check for that amount of money? It is more a reasonable estimate of what both parties think will be spent on research projects of mutual interest over the time period of the agreement.

  • Robert Jones

    None of our local scholars see a problem with what has been laid out here? Sponsors have the right to review manuscripts? Are they checking for spelling errors? There are numerous examples of corporate sponsors dictating the conclusions of a researchers work.

    Will Pfizer fund research into Viagra Blindness and commit to publishing whatever the science turns up? http://retractionwatch.wordpress.com/2011/05/03/retractile-dysfunction-author-says-journal-yanked-paper-linking-viagra-cialis-to-vision-problem-after-legal-threats/

    There is something very wrong here.

  • http://www.lymanbiopharma.com Stewart Lyman

    Regis, thank you for providing this information, which is very helpful to those of us seeking to have a better understanding of the process. I have just a few follow-on questions:

    1) What percentage of the steering committee members are from UCSF, and what percentage from Pfizer?

    2) I understand that Pfizer would not want scientists to work on the same target with another company, which is perfectly sensible. Can a researcher working on target A with Pfizer work on a separate target B with Merck?

    3) I am sure that many of your researchers would want to tap into the financial resources being offered. If only a few researchers, however, wanted to participate, or alternatively, the steering committee only thought a few proposals were worthy of support, then I presume the total amount of money spent here would drop significantly?

    4) Finally, assuming that the highest amount of money available was actually spent, can you estimate what percentage of the total research budget of QB3 would be coming (a) from Pfizer, and (b) from all industry supported activities?

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