Pharma-Academic Alliances: What the Numbers Don’t Tell You


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new drug targets while continuing to search small biotechs for hot potential medicines. This course makes sense given that a recent study revealed that 13 percent of newly approved drugs originated in academia, where numerous labs are already focused on the drug discovery process. Why have so many deals been established in just the past few years? There are two reasons. First, many Big Pharma companies are facing patent expirations on their best selling drugs within the next few years. This will cut significantly into the cash flow that they could use to fund more research. Secondly, these companies remain locked in mortal combat with each other, resulting in a heated rivalry to sign up entire departments worth of Key Opinion Leaders before their competitors can. Again, it’s just like sports: make sure you sign the crucial free agents before the other teams do.

One other likely advantage for pharma in setting up these alliances is a streamlining of legal paperwork. A single drafted agreement should eliminate the need for a large number of individual Material Transfer Agreements, each of which may require lengthy negotiations with a university technology transfer group. Overworked lawyers on both sides struggle to negotiate and complete these deals, which I have seen drag on for years before they are either finished or abandoned. Scientific advances often obviate them before they are concluded. I routinely advise biotech companies that they should find an alternate investigator to collaborate with if they can’t complete these agreements in a timely manner (e.g. ideally less than three months, but certainly less than six).

It’s also not surprising that these alliances are being established at a time when academic departments at many universities are suffering from deep budget cuts. The success rate for obtaining basic (e.g. NIH) research grants is currently very low, putting additional financial pressures on academic researchers. These deals are injecting some serious money into academic departments sorely in need of financial resuscitation. The initial going rate for these agreements appears to be in the $5 to $15 million per year range, but one can readily imagine all sorts of success clauses that would pump these numbers higher. I’m not surprised that the exact terms of these pharma-academic department agreements are seldom publicized; Big Pharma likes to hold its cards close to the chest. I wonder, though, exactly what academic departments have promised their Big Pharma partners in order to obtain their industry funding?

Many people would argue that a large shift from basic to more applied research in academia is, almost by definition, a good thing. I’m not convinced. Much of today’s applied research is built on … Next Page »

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Stewart Lyman is Owner and Manager of Lyman BioPharma Consulting LLC in Seattle. He provides strategic advice to clients on their research programs, collaboration management issues, as well as preclinical data reviews. Follow @

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11 responses to “Pharma-Academic Alliances: What the Numbers Don’t Tell You”

  1. K Brasel says:

    For myself, the main question is how do these arrangements with public, non-profit institutions (Universities) remain private? Isn’t there a mechanism for those documents to be released to the public (who paid for them)?

  2. Stewart Lyman makes a profession out of consulting with academia and industries about alliance formation. Nonetheless he seems to be deeply concerned that “Big Pharma has gone alliance crazy”.
    It is hard to know why he is so incensed. Everyone, including Lyman, knows that Big Pharma is looking around for new models and knows why. His main concern seems to be the classic one for angry letter writers – “If I do not know the details then I will assume that bad things are being done”
    I have been involved in several of the UCSF deals mentioned by Lyman. As an academic researcher completely committed to improving human health, I can assure Lyman that these deals were made because we believed that we could advance human health better by making them than by staying in our ivory towers. Academics like myself are great at discovery but are frequently embarrassingly ignorant of the useful applications of our discoveries. Alliances with Pharma can bring the knowledge of society needs that we lack. It may be hard for Lyman to believe but it was NOT about the money.
    While no doubt lacking Lyman’s years of experience in negotiating alliance deals, we are not fools and we get very good advice in making such deals from many local experts who provide pro bono help. In addition the University of California has very strong guidelines to make sure that any agreement made with a company does not damage our educational mission or imperil our reputation for objectivity.
    If he wanted his seven questions answered, why didn’t he just call? The answers are not secret.
    Finally the old concern about NIH funding being misused for commercial purposes should be allayed by reading bullet point three of NIH’s mission statement. Surprisingly few have.

  3. It is indeed a pleasure to have Regis Kelly, director of the California Institute for Quantitative Biological Research (QB3) respond to my article. I don’t personally know him, or I might have called him (had I known he was the person to ask) to have the questions I posed in my article answered. I appreciate his commitment to translational research and hope that the mission of his organization is successful. While he accuses me of being an “angry letter writer” for asking what I (and others) thought were some pertinent questions, his response failed to answer the questions raised. I invite him to post his answers to the seven questions that I put forth to educate both myself and Xconomy readers on how these agreements come together. That way, researchers throughout the country will understand how your deal was structured and have a basis for comparison to the one’s that their own institutions may have entered into or are considering. And if the deal was not about the money, as you indicate, I would be happy to provide you with some suggestions for organizations that could put in to good use. You can even keep the money local and focused on translational research. Perhaps the Institute for One World Health in SF would welcome some additional funding?

    While you take me to task for raising these questions, others I have heard from have offered different opinions and tell me that they have spent considerable time discussing the very issues that I brought up for discussion. And I’m not sure why you accuse me of being “incensed” just because I have the temerity to ask some questions about these deals. As we know, the devil is in the details, and UCSF, where Regis works, is associated with one of the saddest past chapters of pharma-academic dealings, the Boots Synthroid affair. This story has been well documented and I direct readers to the original story published in the Wall Street Journal in 1996 “How a drug firm paid for a university study, then undermined it”, or any of the review articles that covered this case (see Science 273, p 411, 1996 for an editorial reviewing the matter). Essentially, a UCSF researcher was hired to do a basic research project for the Boots Pharmaceutical company. When the company did not like the published results, it forced the authors to retract an article describing their work and, according to the Science article, “brought the university to its knees with threats of a protracted lawsuit”. One of the key points was that the researcher had ignored a clause in a 21-page research contract that required the company to review any papers before they were published. UCSF policy at the time would not have allowed the contract to be signed, but the researcher signed it anyway. Derek Bok, former President of Harvard, is quoted in the Science piece as saying “the price of corporate support is eternal vigilance.” No doubt that many universities and research institutions, including UCSF, revised and tightened their protocols for entering into these types of agreements after this affair became known. Pharma and biotech organizations used to make do with the signature of just the researcher that they wanted to work with, but a sign-off by university officials is now standard protocol in material transfer agreements.

    It certainly makes sense for pharma and biotech to work with academic researchers to improve the drug discovery and development process. When I worked in biotech, I personally set up well over one hundred collaborations with academics to facilitate our getting a clear understanding of the biology of the proteins encoded by the novel genes I had cloned. Amazingly enough, the vast majority (>99%) of these deals were done without providing the investigators with a single dime of support (they were simply supplied with the new protein or a cDNA for their experiments).

    Let’s see if we can get other academic researchers to weigh in with their thoughts about these agreements. Are there any concerns? Have their been any problems? Is this all really a non-issue?

  4. After I claimed that there were no secret dealings involved in the alliances I have knowledge of, I was challenged to provide the answers to the seven questions that were raised. To be as accurate as possible I will base my answers on the collaboration that QB3 has with Pfizer and which I know the best.
    1. Who decides? A steering committee of UCSF and Pfizer scientists choose from submitted non-confidential applications.
    2. Who authorizes? The steering committee decides.
    3. Choice of projects? The steering committee chooses from submitted applications and does not specify the science in the projects.
    4. Exclusivity? A pharma company would not be comfortable working with an academic partner who is exploring the same target for another pharma company.
    5. Tenure? A sponsored research agreement with Pfizer brings in indirect costs at the same level as NIH funding. To the extent that tenure is given on the basis of the ability to attract funding of any sort, an industry sponsored research agreement could contribute positively towards tenure. I do not know if we have any statistics on the influence of sponsored resaerch agreements on the tenure process, negative or positive.
    6. Review of papers? Sponsors do have the right to review manuscripts describing the research they have funded several weeks in advance of publication. Usually this is done while the manuscript is still in an early stage of composition in order not to slow down the publication process.
    7. Intellectual property based on research in university labs supported by industry still belongs to the University of California. Out technology transfer agents will encourage disclosure and patent filing on potentially commercializable research, which can slow down the publication process. Thus, filing of patents can indeed result in a slow down in publication of results, but this is true whther it is funded by industry or the NIH. I am not aware of any difference that depends on funding source.
    I hope this helps you and other readers of Xconomy understand the process a little more clearly.
    I wonder if some of the confusion may come from the assumption that an “$85 milion award”, for example, comes with a check for that amount of money? It is more a reasonable estimate of what both parties think will be spent on research projects of mutual interest over the time period of the agreement.

  5. Robert Jones says:

    None of our local scholars see a problem with what has been laid out here? Sponsors have the right to review manuscripts? Are they checking for spelling errors? There are numerous examples of corporate sponsors dictating the conclusions of a researchers work.

    Will Pfizer fund research into Viagra Blindness and commit to publishing whatever the science turns up?

    There is something very wrong here.

  6. Regis, thank you for providing this information, which is very helpful to those of us seeking to have a better understanding of the process. I have just a few follow-on questions:

    1) What percentage of the steering committee members are from UCSF, and what percentage from Pfizer?

    2) I understand that Pfizer would not want scientists to work on the same target with another company, which is perfectly sensible. Can a researcher working on target A with Pfizer work on a separate target B with Merck?

    3) I am sure that many of your researchers would want to tap into the financial resources being offered. If only a few researchers, however, wanted to participate, or alternatively, the steering committee only thought a few proposals were worthy of support, then I presume the total amount of money spent here would drop significantly?

    4) Finally, assuming that the highest amount of money available was actually spent, can you estimate what percentage of the total research budget of QB3 would be coming (a) from Pfizer, and (b) from all industry supported activities?