Tech Megatransfer: Merck Pays Harvard $20M For “Accelerated” Cancer Drugs

Xconomy Boston — 

Some universities are more aggressive than others in looking for ways to move life science projects out of the academic lab and into companies, what’s often known as “tech transfer.” For Harvard University, the Blavatnik Biomedical Accelerator is one such tool, and today it’s brought in a rather large chunk of change.

Merck (NYSE: MRK) is paying $20 million to Harvard to license a group of small molecule drug compounds created in the labs of Harvard chemical biologist Matthew Shair (pictured).

These drugs are meant for blood cancers like acute myeloid leukemia, and block a pair of enzymes—CDK8 and CDK19—that are implicated in AML. Shair and colleagues published a paper in Nature last September about the work.

While $20 million is a drop in the bucket for Merck, which is now responsible for developing the drugs, it’s an unusually large amount for a licensing deal with a university. Harvard senior associate provost Isaac Kohlberg says the university has done “nothing close to this” with other licensing deals.

Recent figures from the nonprofit Association of University Technology Managers back that up. According to a report from the AUTM, Harvard received about $17.3 million from 81 licenses in all of 2014, which comes out to about $200,000 apiece. (Those data are from upfront fees, not downstream payments.)

The reason Merck paid so much is that the compounds from Shair’s lab were developed much further than the norm before a deal was cut, which is where the Blavatnik money plays a role. The Blavatnik accelerator’s chief scientific officer Curtis Keith says his team has been working with Shair’s lab for almost four years, and has put “significantly more” money into this project than is typical. He wouldn’t specify how much, but normally the BBA will make small grants in the $100,000 range to conduct some basic experiments, or $300,000 or more “development” grants for “multi-year” projects, Keith says.

The BBA helps Harvard faculty members with funding, mentorship, and business advice, and helps push their work forward through relationships with contract research organizations, consultants, and industry partners. That type of assistance helped Shair get his compounds to the point that Merck was willing to write a $20 million check. In a statement, for instance, Merck and Harvard call Shair’s compounds “poised for advancement towards clinical trials” and in “relatively late-stage preclinical development.”

Kolhberg and Keith wouldn’t elaborate, however, and a Merck spokesperson declined to give a timeline, only saying that the company “is committed to advancing the compounds toward the clinic as fast as possible.” Merck will work with Shair’s lab via a research collaboration to move the compounds forward.

The deal is the most lucrative to date for the BBA, which actually began in 2007 as the $10 million Biomedical Accelerator Fund.  Its namesake, Access Industries founder and Harvard alum Len Blavatnik, gave Harvard a $50 million gift in 2013 to expand its scope and create the BBA and the Blavatnik Fellowship in Life Sciences Program.

The BBA is meant to address what’s known as the “valley of death,” in which promising projects stall because they are too early to get the financial backing of an investor or pharma company. Universities have come up with a number of different ideas to deal with the problem. For instance, NYU Langone Medical Center, as I wrote last week, has an “office of therapeutics alliances” that leans on partnerships with contract research organizations and input from seasoned advisors to push projects forward. (Nature took an in-depth look at a number of initiatives by universities to reshape tech transfer and engage industry here.)

The BBA is a similar type of effort, aiming to help license  research to entities that can develop and ultimately commercialize it. Keith says the accelerator has spent about $10 million on roughly 25 projects since it was formed three years ago. Most are still ongoing.

A few startups have popped up as well. Harvard chemist Andrew Myers used accelerator funding to advance antibiotics research that turned into a startup called Macrolide Pharmaceuticals, which raised a $22 million Series A round a year ago.

The accelerator has also helped turn work from chemical biology professor Tobias Ritter into SciFluor Life Sciences, and research from cell biologists Daniel Finley, Alfred Goldberg, and Randall King into drug candidates now in preclinical development at Proteostasis Therapeutics (NASDAQ: PTI).

Shair’s work led to a licensing deal with a big company, rather than the formation of a startup, because the compounds are likely to reach patients faster that way, according to Kohlberg.

Kohlberg says 20 percent of the revenue the BBA generates flows back to it. In time, the idea is to make the accelerator self-sustaining. The big haul from Merck makes that reality more likely, but Kohlberg says the accelerator has a larger mission.

“What drives [our] strategy is not the revenues but to ensure that these opportunities get in the right hands,” he says.