The Broad Institute of MIT and Harvard will receive more than $50 million from the healthcare-focused investment management firm Deerfield Management, through a partnership designed to translate early-stage research into new therapeutics for serious unmet medical needs.
Deerfield, which manages approximately $8 billion in funds, has agreed to fund early-stage academic research at the Broad over an initial five-year period. Deerfield also agreed to provide “significant additional resources” to support creation of new entities that would be formed to develop therapies based on the most promising targets, the partners said.
The Broad said that knowledge and intellectual property developed through the partnership with Deerfield will be shared widely with other academic and nonprofit research institutions and may also be made available for commercial therapeutic development.
Deerfield is promising to dedicate any profits its Healthcare Innovations Fund makes from a successful therapeutic to its philanthropic arm, the Deerfield Foundation, created to support healthcare innovation and healthcare initiatives that benefit children and adults in underserved communities.
“Over the last few years, Broad Institute researchers have developed a number of unprecedented biological insights and therapeutic hypotheses that are early-stage but potentially transformative. Moving these hypotheses from the lab toward the clinic requires significant financial resources to build on work launched by philanthropy and grants, and are not yet far enough along to attract traditional venture funding or pharmaceutical collaborations,” James Flynn, managing partner of Deerfield, said in a statement.
“We are prepared to fund and develop these projects so Broad researchers can immediately pursue bold ideas, and have confidence that real breakthroughs will have additional support to move toward clinical success,” Flynn added.
He told The Wall Street Journal that Deerfield plans to fund five to 10 projects, and invest additional funds in any new companies formed to commercialize the research.
The Broad added that its partnership with Deerfield will follow its principles for disseminating scientific innovations, which aim to ensure that advances made by the Broad community can in turn be advanced by others, in order to maximize the benefit for human health.
Among those principles are making large foundational datasets publicly available to the entire scientific community, making work—defined to include discoveries, data, tools, technologies, knowledge, and intellectual property—readily available for use, at no cost, by other academic and nonprofit research institutions.
Commercial Licensing
Those principles, the Broad adds, also include commercial licensing consisting of nonexclusive licenses in most cases, but not for the potentially most lucrative IP: “In some cases, we recognize that an exclusive license to an innovation may be necessary to justify the level of private investment required to develop a product and bring it to market.”
Industry partners seeking to license discoveries from academic institutions face unique challenges and considerations than they would in transactions with traditional corporate licensors, Samuel A. Waxman, a partner in the M&A and technology practice of law firm Paul Hastings, and Michael Vargas, an associate in the firm’s corporate practice, wrote last November.
They observed that the academic institutions’ technology transfer offices (TTOs) must balance the desire of the parent institution to generate profits through licensing agreements with other, sometimes competing, interests—including those of individual principal investigators (PIs), their labs within the university, and specific departments. TTOs, as a result, are reluctant to deviate from established practices as spelled out in form documents.
“Although it may appear that both prospective licensees and TTOs have well-aligned interests in making sure that these early-stage candidates become profitable as quickly and efficiently as possible, academic licenses are much harder to negotiate than one might expect given occasionally competing interests between the parties,” Waxman and Vargas wrote.
The partnership with the Broad is not Deerfield’s first drug discovery effort. Last year, Deerfield joined Memorial Sloan Kettering Cancer Center, The Rockefeller University, and Weill Cornell Medicine, in partnership with Takeda Pharmaceutical and another healthcare-focused investment firm, Bay City Capital, to launch Bridge Medicines. The company was formed to advance promising early technologies in major academic institutions through human proof of concept.
Bridge Medicines builds upon the work of the Tri-Institutional Therapeutics Discovery Institute (Tri-I), an independent, nonprofit launched in 2013 by Memorial Sloan Kettering, the Rockefeller University, and Weill Cornell Medicine. Tri-I offers industrial-scale technical support for academic projects, with the goal of translating groundbreaking research into preclinical studies.
