Bayer Nuzzles Up Even Closer to UCSF, Strikes 10-Year Master R&D Agreement

Xconomy San Francisco — 

Bayer said last year it was moving into San Francisco’s Mission Bay district to be close to the big biology brains at UCSF, and now the German pharmaceutical giant is taking another step to weave itself into the local life sciences cluster by striking a 10-year master R&D agreement with the university.

The agreement establishes basic terms for the company and the university to collaborate on research projects, outlining principles of who owns the intellectual property, and how discoveries can get published in scientific journals. Financial terms of the new master agreement aren’t being disclosed. The company is announcing the new UCSF master agreement today at a grand opening ceremony at its new U.S. Innovation Center at 455 Mission Bay Boulevard South.

Bayer’s new relationship is the latest in a series of moves the university has made to forge closer ties with the pharmaceutical industry. The university, led by former Genentech president Susan Desmond-Hellmann, formed a five-year deal in November potentially worth $85 million from Pfizer to help promising biotech drug candidates make the leap from research to early development. While terms of the Bayer agreement aren’t being reported, UCSF researchers will be able to submit proposals and tap into a fund that’s structured in a similar way to the Pfizer fund, according to Bayer spokewoman Cathy Keck Anderson. Financial support from big drugmakers has become increasingly important on campus, as about four out of every five applications for federal research grants get turned down in the era of fierce competition and tight budgets.

The master agreement is the sort of thing that’s designed to speed up the legal process around setting up academic-industry collaborations around specific projects. Both sides say they hope to speed up the process of translating basic science into novel medicines that are supposed to make money and help patients.

“This agreement will help researchers at Bayer and UCSF collaborate on a broad range of projects to that end,” Desmond-Hellmann, UCSF’s chancellor, said in a statement.

Under the master agreement, Bayer will automatically get a license to use certain intellectual property from UCSF for research and development purposes, Anderson says. The company also has first right of refusal to negotiate for a license to commercialize UCSF intellectual property resulting from a collaboration, she says.

The company has its strategic reasons for wanting to get closer to what’s happening at UCSF Mission Bay. Like everyone else in Big Pharma, it needs to create innovative new medicines with long-lasting patent protection if it wants to continue to grow in an era when many hit drugs of the past are facing competition from cheap generics. “Bayer chose San Francisco as the site for its U.S. Innovation Center because of the leading role this area’s research community plays in life science discovery,” said Andreas Fibig, chairman of the board of management for Bayer’s pharmaceutical division, in a statement.

Back in May, Bayer said it planned to move its 65-member research team from Richmond, CA, to the Mission Bay area of San Francisco, a move that was touted by San Francisco mayor Gavin Newsom as a milestone for the city and region. Newsom, who’s now moving on to become Lieutenant Governor, described the master agreement between Bayer and UCSF in even broader terms. “As California works on its recovery, life science partnerships that begin at the research bench will lead to long-term economic stability for our region,” Newsom said in a Bayer statement.

Of course, research collaborations between academia and industry have been known to cause tensions on both sides through the years. One such tussle spilled out into public view last fall when the Dana-Farber Cancer Institute contended in a federal lawsuit that it wrongly licensed a potential cancer drug to a Bay Area biotech startup, Gatekeeper Pharmaceuticals. The institute said the intellectual property in question should have been awarded to Novartis, a longtime backer of Dana-Farber.

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