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 / Winter 2003 / Issue 33(originally published by Booz & Company)


The New Architecture of Biomedical Research

The skills gap between academic institutions and large pharmaceutical companies means the two would be natural partners in the increasingly collaborative biomedical world. But this partnership, too, is evolving. The larger companies are often reluctant to look at very early stage discoveries, so they sometimes wait until a biotech company has at least partially validated a potential drug before getting involved. Typically a biotech company charges a substantially higher licensing fee than an institute would, but some of the risk has been removed.

“It’s often very difficult to get a pharma company interested at such an early stage,” says Thomas Ittelson, director of intellectual property at the Whitehead Institute for Biomedical Research in Cambridge, Mass. “Often they want a biotech company to vet it first. I’ve done deals with Lilly, Pfizer, Merck, but it’s easier with smaller companies. Ultimately, though, it’s the Pfizers and Mercks that will take these things forward.”

There is “a symbiotic relationship between early pharma development and what we can do at Whitehead,” Dr. Ittelson says. “I can license some discovery to a pharma company, and on top of that get a couple of million in sponsored research at Whitehead. We may discover a new fatty acid that potentially controls whether the body uses fat, but unless some company takes that raw scientific discovery and spends a lot of time, money, and expertise developing it, it will never become a therapeutic or something that will help mankind’s health and happiness. We may make a discovery, but it’s not going to turn into a drug unless somebody puts $200 million and a lot of time into development work. That’s not what academia can do.”

The Whitehead, founded in 1984, is an independent research institute whose 13 senior faculty members all have professorial appointments in the biology department of the Massachusetts Institute of Technology.

“One of the things we are pushing at Whitehead, even more so than at MIT, is to combine basic discovery work here appropriately with pharmaceutical development,” Dr. Ittelson says. “Some of our big successes have actually been licensing discoveries to companies, and doing joint development, where they move forward on drug development and we move forward on trying to understand the biology. We get an interest in the drug, and I can also get some nice funding. The professor might do some consulting, and he’s got some new money in his lab that he doesn’t have to beg from the NIH.”

The Art of Technology Transfer
One challenge to forming collaborations is that the typical invention at a research institute is pretty intangible. Technology transfer officers struggle to assign a value to an insight, and sometimes to persuade the owner of that insight to share it.

“Our technologies tend to be very early stage, and it’s very difficult to separate the technology from the individual early on,” says Kathleen A. Denis, director of technology transfer at Rockefeller University in New York. “If the individual doesn’t want to participate, it’s not going to go well. I don’t have a widget to sell.”

So part of the technology transfer director’s job is missionary work, talking to scientists one on one. “There’s nothing I can do, or want to do, to force them to show me something. But I can say, ‘We have a nice place in society, a nice piece of ground, no taxes, bags of money from NIH and donors; and they’re all sort of expecting something in return,’” Dr. Denis says. “‘If we had something of benefit to humanity, why wouldn’t we want to give something back?’ and a lot of people fall for that. It’s not for the money, although if we do it well, there will be some financial gain. We really do have a very privileged place in society.”

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  1. Lawrence M. Fisher, “How Strategic Alliances Work in Biotech,” s+b, First Quarter 1996; Click here.
  2. Lawrence M. Fisher, “Post-Merger Integration: How Novartis Became No. 1,” s+b, Second Quarter 1998; Click here.
  3. Lawrence M. Fisher, “The Rocky Road from Startup to Big-Time Player: Biogen’s Triumph Against the Odds,” s+b, Third Quarter 1997; Click here.
  4. Cold Spring Harbor Laboratory:
  5. The Salk Institute for Biological Studies:
  6. Whitehead Institute for Biomedical Research:
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