By Christopher Leo, Ph.D., senior VP, and Jonathan Gertler, M.D., managing partner, founder, and CEO, Back Bay Life Science Advisors
For the past decade, academia and industry have become increasingly collaborative, finding ways to shed cautious attitudes and successfully advance programs together. Now, academia is taking a proactive, strategic approach that promises to further catalyze industry relationships and increase opportunities for commercialization and monetization of the most promising technologies.
Academia has responded in kind with enthusiasm and measured pursuit to engage industry. Many institutions, including Stanford, Harvard, Johns Hopkins, and the University of California, San Francisco, have found creative ways to fund high-priority technologies toward development and commercialization, monetize potential royalty streams, and collaborate with industry beyond the traditional structures.
For the first time, academia is creating dedicated business development teams to court pharma. These teams often are composed of seasoned industry professionals and investors who can creatively identify opportunities and enable this courtship.
- At the University of Massachusetts, Brendan O’Leary, Ph.D., executive vice chancellor for innovation and business development, has nearly tripled sponsored research dollars coming into the medical school via multiple mechanisms. In addition to courting pharma partnerships, O’Leary has implemented a range of new initiatives focused on funding of the university’s technology. For example, he has assembled teams of entrepreneurs to review UMass technologies in exchange for an option to raise funding and negotiate a license around the program’s IP. Another initiative involves identifying potential partnerships with CROs for access to their screening and preclinical platforms in exchange for UMass biologics or assay development expertise.
- David Greenwald, Ph.D., director, business development and corporate partnerships at Johns Hopkins Technology Ventures, sees several key benefits for universities being more aggressive in approaching pharma with these potential deals. Such agreements diversify the university’s funding stream (particularly important given flat/ declining NIH funding levels) and enable the pharma partner to guide the university’s investigators throughout the development process, thereby increasing the value of the program and opportunities for commercialization down the road. Finally, many of these agreements include options to license the resultant IP for the pharma partner, thus incentivizing the investigator and institution to adhere to a research plan and timeline conducive to an early-stage pharma program.
Across academia, institutions are finding new ways to advance their technologies and catch the eye of industry: The University of California’s (UC) QB3 program; Harvard University’s Blavatnik Biomedical Accelerator; and The Engine, MIT’s new venture to support startup companies working on scientific and technological innovation, all provide resources, mentorship, lab space, and sometimes seed funding to support scientific and technology advancement.
These groups work closely with faculty to advance technologies and make them appealing and attractive to VC funding or industry partnership, with impressive results to date. For example, at the QB3 program, several large collaborations with industry have been established to advance UC science, provide funding, and link UC faculty to pharma expertise, including Pfizer, Roche, GE Healthcare, J&J, and Takeda.
This new approach is not without its challenges, however. As academia discovers creative ways to approach industry, it also must navigate through some difficulties:
- Funding gaps are still an issue for translational research to advance a program to a real inflection point, such as proof-of-concept in a second animal model.
- Need for close management is amplified. This new strategy requires a strong alliance-management function to serve as a liaison between the investigator and pharma partner and ensure ongoing dialog around research objectives, progress, and timelines. Johns Hopkins University hires a full-time employee as an alliance manager for each industry collaboration established.
- Institutional culture adjustment can be seemingly insurmountable. Adhering to a “pharmalike” research plan represents a real culture change for many investigators, particularly those with limited entrepreneurial experience. Therefore, a significant educational effort is required.
- Industry stigma can slow new thinking. Technology transfer is still too often viewed as a bazaar or open exchange of the university’s assets, frequently driven by a principal investigator’s preference. It’s important to be transparent with goals and eventual outcomes to demonstrate mutual benefit.
As academia wends through these challenges, traditional options remain for advancing beyond the laboratory toward commercialization, including funding through angel investment, venture backing through licensing, and structured collaborations and licensing mechanisms that ultimately lead to acquisition of the technology/asset by the pharma partner. These options should be approached by academic investigators first with a thorough review of each asset.
Advancing a startup may be onerous to some and highly appealing to others. With industry-academic interactions, true commercial and transactional discipline should be applied. Technology development offices must triage priorities among faculty projects for intellectual property pursuit and strongly consider the various parameters that will ultimately predict commercialization success and optimal returns to the university.
Many offices of technology development claim success based on overall economic ranking. However, this can be an inaccurate measure of health. Close scrutiny may reveal that only one or two successes drive the lion’s share of royalties and do not measure potential of future success. While many love the idea of a “home run” in academic-industry partnerships, a better indication of overall team health is a carefully strung together history of singles, doubles, and triples to advance a more sustainable program. Ultimately, these smaller, steady wins are a truer indicator of a university’s ability to monetize assets.
The path from academia to monetization combines several new disciplines for technology development, but during that journey it’s important to remain close to the overall academic mission. Initiatives and investigators must stay dedicated to research and teaching.
The office of technology development should approach promising assets with the same level of scrutiny as would occur if the assets were embedded inside a biopharma company. This involves understanding the competitive intensity in the space, the groundbreaking nature (or lack thereof) of the asset in question, translational research requirements (e.g., animal models, preclinical tox studies), as well as the development and commercial hurdles that will render an asset appealing.
As academia learns to approach industry with key objectives in mind, assessment should broaden beyond the projected scientific innovation to matching the asset to the right structure for development (i.e., formation of a spin-out company, sponsored research collaboration, combinations of licensing deals, and continued sponsored research relationships). This leads to the greatest chance of success and requires scrutiny across the outlined parameters. With a wider swath of suitors from which to choose and unprecedented combined capital resources, academia has never been in a better position.