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Q&A: UCSF’s Jeff Bluestone on the Tricky Balancing Act Between Academia and Industry

Xconomy San Francisco — 

Jeff Bluestone has one of those jobs in academia where you almost expect the guy to wear a flak jacket to work.

As executive vice chancellor and provost, part of the gig is to make sure UCSF’s 2,400 very smart, very strong-willed faculty remain happy, and keep doing world-class work in research and teaching. He also has to make sure ethics rules are being followed. Then there’s the task of trying to prove the institution isn’t just full of ivory tower daydreamers, and delivers on the promise of biomedical research, so that folks in Washington D.C., and the corner offices of Big Pharma, will continue to help pay the bills, especially when budgets are tight.

Bluestone, 57, took on this responsibility about a year ago, joining the new leadership team around Chancellor Susan Desmond-Hellmann, the former president of product development at Genentech. Before taking the job, Bluestone was best known in academia as a world-class diabetes researcher, and as a leader of the well-known Immune Tolerance Network. But Bluestone is also well known in the business world, having served as a scientific advisor to numerous biotech companies over the years, like ViaCyte, MedImmune, Pfizer, Biogen, and XDx. Now through one of the top jobs at UCSF, he has applied his experience in both academia and industry to help craft new institutional partnerships with Pfizer, Sanofi-Aventis, and Bayer.

I have plenty of things I want to ask Bluestone, as he’s one of the featured speakers at Xconomy San Francisco’s big event on the 20-year outlook for Bay Area life sciences, coming up next Wednesday. But before that, I wanted to dive into some issues specific to UCSF that won’t exactly fit into the context of that program. Here are excerpts from our conversation earlier this week, edited for length and clarity as always.

Xconomy: How long have you been at UCSF?

Jeff Bluestone: I’ve been here 10 years. I came from the University of Chicago, which is a great institution with a great tradition of research and clinical care. What’s different here, obviously, is being in this environment. It’s the West Coast, the Bay Area, and it’s full of entrepreneurs. We’re starting companies every week. We’re thinking about how to take our discoveries into drug development. We’re working on novel technologies. It feels and functions very differently out here.

X: Have you noticed much of a cultural change at UCSF now that Sue Desmond-Hellmann has been in there for a little over a year and a half? The impression I get, right or wrong, is that for years UCSF had a reputation of not being friendly to industry, as a difficult place for industry to work with. Do you think something has changed?

JB: I’d say two things. The perception is a misperception. If you think about it, UCSF over the last several decades has been an incredible partner with industry in the Bay Area, from the early Boyer patents that helped start Genentech. We’ve started 50-60 companies over the past 30 years and that’s not counting the 40 or so companies we’ve started in the last couple of years in the incubator. Faculty have been involved with industry, they’ve started companies. But like all public institutions, there has always been a balance of the public good, and making sure to protect the interests of the state, while at the same time allowing investigators to be as entrepreneurial as possible. I think UCSF has struck a good balance.

Sue certainly came to the institution with an understanding that this is an important element. With my appointment, and with Sue coming in, and we now have started an office for industry partnerships. There is an increasing effort to build relationships on a broader basis. Our recent Pfizer deal, the addition of Sanofi-Aventis to our breakthrough biomedical research program, and the Bayer project—these are all about platform agreements that change the way we are working with industry, and hopefully in as industry-friendly of a way as possible, while making sure we protect the academic freedoms of our faculty and students.

X: Are those the major industry relationships—Pfizer, Sanofi, and Bayer—that have been struck in the past year? Do you still have a master agreement in place with Genentech?

JB: Yes, we have a master agreement with Genentech. There’s the recent one with Bayer. We have a large Pfizer deal, which actually involves having Pfizer put scientists on the Mission Bay campus to work daily with our scientists. It’s a new way to approach partnerships. The Sanofi deal is interesting because it has two major components. One is trying to bridge the valley of death in therapeutic areas like oncology and aging and diabetes, but also, there’s a separate investment in our very fundamental biomedical research program called Program for Breakthrough Biomedical Research (PBBR), which is really trying to support out-of-the-box ideas.

There have been other partnerships developed with Merck over the past year which have also been groundbreaking, in that they promote an institution-wide effort. There are a few more in the hopper we are working on as well.

X: It seems like a trend we are seeing, not just at UCSF, but at other institutions as well. Sanford-Burnham in San Diego has done a couple recently. Do you find these Big Pharma companies, who are struggling to fill up their pipelines, struggling to innovate, really turning to academia as the source for new innovations now, as opposed to small biotechs, like they once did?

JB: Frankly, it’s going in both directions. The pharmaceutical industry has realized that the human genome and its consequence—a bunch of new drugs—is probably a faulty model. The amount of investment made internally in pharmaceutical companies to take advantage of all the data we can now create has actually left a hole. There was not necessarily a fundamental understanding of the systems, of the biology, the biochemistry, to take advantage of it. On the other hand, academia appreciates how all of that investment has really created a set of tools that will help academics really realize some of the larger challenges to doing research. We never had capital for that before. We could do experiments on our own benches, each lab could run his own little experiments, and now we realize that you need access to big tools, big machines. Together, there’s a logical and appropriate partnership.

I still believe academia is the source for novel ideas, for early understanding of biological systems, being able to bring together diverse pieces of information in an adaptive way to really think about a problem in a different way than industry is used to. Industry sees its pipeline shrinking, the number of new drug entities shrinking, and really needs to get back to basics. You can’t just generate an unlimited amount of data and expect a drug to pop out the other end.

X: Have you encountered much resistance on campus, from faculty or student groups, saying things about this going in the wrong direction, or complaining about how they get to do less creative work, or they feel they are losing publication rights? Are people arguing that the institution is selling its soul?

JB: I’ve been very sensitive to that. I’ve not gotten a significant amount of pushback, and I think that’s for several reasons. No. 1, we enter into each of these partnerships with fundamental principles—like freedom to operate, publish, educate—that have to be included. We don’t give away rights that preclude us from ever being able to do research that a partner may not want to pursue. That’s a core principle. We have to make sure we can always pursue the science.

We also try to work as much as we can in the pre-competitive space, so no one’s feeling a lot of pressure to hide stuff. And most importantly, we realize that industry partnerships are not for every faculty member. We don’t try to force any kind of effort that a faculty member doesn’t feel comfortable doing. Our tech transfer office is very sensitive to the needs of the faculty. If they are looking for a company to partner with, that’s great, we’ll try to facilitate and help. But the way I look at it, maybe that’s 10 to 15 percent of the faculty, but there may be 30 to 40 percent of the faculty that want to continue to do their fundamental research in a discovery-based way, and make their impact by publishing. We certainly want to support that part of the UCSF mission without any constraints. Because we come to this with a core set of principles, we have been able to keep the concerns of our faculty to a minimum, but also, our partnerships with industry are stronger. Everybody knows what they are coming to the partnership with, and nobody is feeling they got hamstrung by the partnership.

X: Who worked out this format for partnerships? Is this a collaborative effort between you and Sue?

JB: When I first started this job last spring, I talked to Sue quite a bit about what we were trying to accomplish in the partnerships. I was very concerned that we make sure we do it right. We can’t afford to do these things glibly. They do have impact.

Sue has been very supportive, and understands our responsibilities as a public institution to serve underserved populations, to provide patient care, and to translate our biomedical discoveries into therapies that will help people. With that core understanding, she and I talked quite a bit, and I sat with my team and said ‘OK, what are the key principles in any agreement that we have to make sure we protect?’ And we’ve come up with these underlying statements that make sure we protect certain things, while at the same time, being as industry-friendly and cooperative and collaborative as possible.

X: UCSF has obviously had a lot of success securing federal research grants, and philanthropy, but I wonder how important these industry agreements are to the institution financially.

JB: It’s fair to say there are a lot of challenges we all have now, with how to support the efforts in academic medical centers. There is pressure on research dollars. There is pressure on philanthropy. There is pressure on clinical income. So we are constantly looking to diversify the portfolio. But I must say that I don’t personally see the driver for these partnerships as money. I think that’s been historically an academic failure. The failure has been to look at industry partners as the cash cow that will support undirected, unrestricted research, and in five years when it goes away, we’ll just find another foil to get money from.

I see industry partnerships now being driven by opportunities to do better research, different kinds of research, to allow investigators who want to drive their science to clinical intervention and through drug development. That’s really the major driver. Having said that, of course, there are financial elements. I certainly expect the in-kind contributions—of being able to have access to certain kinds of industry infrastructure—will be big. There will also be some financial benefits which I hope will allow us to invest in the institution and to be able to continue to grow and enhance our fundamental research effort. That’s a commitment we have to our faculty. We will not turn into a fee-for-service enterprise for pharmaceutical companies. We are going to retain our academic vision. Hopefully that will be sufficiently attractive to industry, and that they will want to continue to do these partnerships.

X: Do you personally still have time to conduct research and run your own lab?

JB: I do conduct research and run my own lab. The question of whether I have time or not is the challenging part of the question (laughs). I have a lab with about 15 people, I still have NIH grants, industry partnership grants. I’m doing clinical research as well as basic research in diabetes.

X: What are the most exciting efforts you see at the bench level that are going to have an impact on human health, 10 or 20 years down the road?

JB: There are a lot of areas. Let me start with the genome. When the genome was sequenced back in 2000, I got the sense that people were disappointed. Here we have 30,000 genes, and people said ‘Gee, fruit flies have almost the same number.’ People wondered, ‘What’s the big deal?’ The past 10 years have helped teach us how different the human genome is, with the epigenetic control of gene expression and the networks created through microRNA and the like. Some of the areas we are very excited about at UCSF are really about trying to understand this genome, which is so overlapping with other species, and how through evolution, the human organism has fundamentally changed how to use that fingerprint of the genome. I see major breakthroughs in how we take advantage of the epigenetics of the genome, the non-coding RNAs, the post-translational modifications that take place on a cell-by-cell basis. When you couple that with some of the strengths of the genome project, the SNP (single-nucleotide polymorphism) analysis, and the sequencing, you can get some pretty powerful genotype/phenotype analysis.

The other area I’m excited about is the device and nanotech field. When I look at the people in our bioengineering program, like Tejal Desai and Sarah Nelson and others, I see lots of opportunities for creating new ways of delivering drugs, new ways of monitoring drug activities. The biomarker field, I think, is going to explode. It’s going to be absolutely essential. One of the biggest mistakes we’ve made as a community—and the pharmaceutical industry is one of the worst offenders here—is that we’re not putting enough energy into biomarker work. Sue always talks about this. She developed Herceptin, and it never would have been a drug if there hadn’t been a biomarker.

Third, I’m upbeat about the field of stem cell biology. A couple weeks ago we opened up our new stem cell building, we had a bunch of people here talking about the future of stem cell research. Although everybody’s impatient and thinks it should have all been validated yesterday, some of the work we’re doing with ViaCyte on islet cell development, I’m absolutely convinced that over the next 10 to 20 years there will be lots of therapies that are developed out of stem cells. Whether it’s directly through the use of stem cells for creation of tissues, or use of stem cells to understand basic processes of a diseased individual or diseased cells, I’m convinced that a lot of breakthroughs will come from stem cell biology.