Universities have long played key roles in biopharma, sharing the research of their professors and postdocs and, ever since the Bayh-Dole Act, more directly through technology transfer.
Now, a pair of new commercialization initiatives extends that biopharma involvement in more of a business-building direction, raising academia’s bet that new drugs can generate new money, and lots of it, as financial pressures continue to grow.
Emory University is investing $20 million into a new public-private drug development enterprise that it hopes will spin out startups based on treatments and technologies from its Emory Institute for Drug Development (EIDD) faster and more efficiently to market.
The Drug Innovation Ventures at Emory (DRIVE) is a nonprofit organization separate from but wholly owned by the university. Its goals include providing financial, business, project management, and regulatory expertise to move drugs through the cash-scarce “Valley of Death,” from lead optimization and preclinical testing and into proof-of-concept clinical trials.
DRIVE is working with two undisclosed companies and has brought a CMO and a comptroller on board, amounting to a total staff of about a half-dozen.
“A lot of the successful chemistry out of Emory has been in the area of anti-infectives and antivirals. So our initial thought was to focus on antiviral drugs in currently neglected areas, because we have street credibility there and a pretty good record of success,” George Painter, Ph.D., CEO of DRIVE, told GEN.
One of those successes is Gilead Sciences’ HIV drug Emtriva (emtricitabine), based on discoveries by Emory researchers Dennis C. Liotta, Ph.D., Raymond F. Schinazi, Ph.D., and Woo-Baeg Choi, Ph.D. Emory licensed the IP to Triangle Pharmaceuticals, acquired by Gilead in 2003, the year FDA first approved Emtriva for treating HIV infection in combination with other antiretroviral agents. Emtricitabine is also a component of Gilead’s Truvada®, a combination drug that includes tenofovir disoproxil fumarate.
To launch DRIVE, Emory committed $10 million of the $525 million it received from Gilead and Royalty Pharma for monetizing royalties associated with Emtriva, and another $10 million toward a new building within the Yerkes National Primate Research Center and new equipment. DRIVE is pursuing additional funds from governmental agencies, partner institutions, philanthropic and investment groups, money that the enterprise hopes will someday supplant the royalty portion.
"Somewhere between $3 million and $5 million will work very well in the first year," Dr. Painter said. "We're bringing our biotech efficiency to an academic environment. Every time we have a new project, we don't have to add infrastructure. We're able to very efficiently use smaller sums of money to drive projects to value."
DRIVE’s initial focus, Dr. Painter said, will be commercializing drugs against RNA viruses representing the majority of emerging and re-emerging infectious diseases, as well as RNA viruses of commercial interest, such as hepatitis C and respiratory syncytial virus. DRIVE will also work on Togaviridae viruses such as Eastern equine encephalitis virus, Western equine encephalitis virus, and Venezuelan equine encephalitis virus.
DRIVE will spin out compounds that show promise into for-profit firms and quickly seek biotech or pharma partners to work with—or be acquired by. The enterprise, Dr. Painter added, is already looking to capitalize quickly on one set of emerging assets: “We have very good hepatitis C leads. Our intention is to sell those quickly into the commercial market, and use the proceeds to augment grants to address diseases of other flaviviruses, such as Dengue fever, West Nile virus, and Japanese encephalitis.”
The focus on infectious diseases reflects in large part the Atlanta presence of the U.S. Centers for Disease Control and Prevention, and Emory’s Center for Positron Emission Tomography, where researchers can use short-lived isotopes to carry out tissue distribution profiles they can match to the tropism of a virus. DRIVE will also access the Atlanta Clinical & Translational Science Institute, which includes the Morehouse School of Medicine and Georgia Institute of Technology.
“We’re already making good progress. We have identified some compounds that are broadly acting against RNA viruses, and we’re starting to get to the point where I think we’re going to have lead molecules to elaborate to clinical candidate candidates within months,” Dr. Painter said. “We think within the next six months, we’ll be in a position whereby we’ll have assets that we can spin out of DRIVE into commercial companies that would be appealing to venture investors.”
Mid- to longer term, DRIVE envisions commercializing treatments for cancers with a viral etiology. Potential collaboration partners include the American Cancer Society and Emory’s Winship Cancer Institute, both in Atlanta; and the University of Alabama at Birmingham, where Richard Whitley, M.D. has long worked on clinical development of antivirals.
Bay Area’s Big Pharma Boost
Across the country, the California Institute for Quantitative Biosciences (QB3)—which consists of the University of California’s San Francisco (UCSF), Berkeley, and Santa Cruz campuses—is looking to partner with big pharma in evaluating startups for possible collaborations and investment.
In recent weeks, Bayer HealthCare and Roche have agreed to work with QB3 startups, joining two other pharma giants that partner with the institute on that and other initiatives. Bayer HealthCare and Roche will join QB3 and its venture capital firm Mission Bay Capital, in evaluating startups for possible funding and support.
In return, the companies will pay QB3. Neither the VC nor the companies involved are disclosing how much, though the institute has said it would receive a fee running to five digits for a yearly program with a pharma partner. Bayer has said it will assist QB3 for three years. Pfizer last year renewed for three years a translational research partnership with QB3 that sparked 22 projects between its launch in 2009 and last year, expanding the effort to another campus (UC Davis) and other programs, such as QB3 Collaborative Startups.
QB3 will, however, say that startups who pass muster with the institute and its pharma partners will receive seed-stage investments—expected to range from $200,000 to $500,000—from Mission Bay Capital, which has $11.3 million under management. Funding may extend into larger Series A rounds.
“The frequent question that we have from a lot of startups is that finding early capital, seed-stage capital, is really difficult. But more than that, it can be very tough for an early stage company to get information about what should they focus their technology on. How should they go about doing that? What are the key risk-reducing experiments they should focus on at the very early stage?” Neena Kadaba, Ph.D., QB3 director, industry alliances, told GEN.
QB3 is primarily state-funded; its research and education effort nets about $1 million of UC system cash, with additional funds from industry and other sources.
In the five years since the U.S. economy soured, the UC system has seen a $1 billion drop in state aid, and resulting cutbacks, aggravated by federal sequestration.
Financial pressures have also touched Emory, which last year eliminated its journalism program, division of educational studies, and departments of physical education and visual arts.
The universities behind DRIVE and QB3 hope that revenue from new drugs will help fill the gaps left by state and federal aid. But as their industry partners can tell them, it takes years to bring drugs to market, which makes any drug-commercialization effort a long-term investment at best. As GEN previously observed, such efforts will ultimately succeed based both on how quickly academia and industry develop drugs and save money. But the concern expressed in this space over conflicts seems to be ebbing, as academia increasingly shifts focus from knowledge-building to cost-cutting.