FINANCE & TRANSACTIONAL FEATURED CONTENT
port more research with more money from these major companies. There are additional ways we can partner with big businesses in the industry. Through our internal or government funding, we have developed our IP and then a company comes along and is interested in the work we have done. The research we have done encourages them to come in and license our patents. Another way business is directly involved with the university is through a sponsored research agreement. This is when we are doing research on behalf of the company who would be our partners in such a deal. A downside to this kind of deal is that there won’t be a huge upside of royalty streams from a blockbuster drug that would hit the market from our research facility. Bigger companies have what they call “drug finder” programs and the structures of deals with companies and universities vary and are still being worked on in the industry. Even without these deals ironed out, there is still a lot of talk in the pharmaceutical space of using the basic research provided by universities.
You mentioned the difficulties that face pharmaceutical companies partnering with universities. What additional advantages do research facilities like WARF offer to these industry heavyweights? What other issues are pharma companies facing when creating new drugs?
It may have been easier 20 years ago for pharma companies to team up with universities because of all of the money that was flowing into the industry. With the increase of pressure on companies to come up with new drugs and revenue streams, they want to nail down the patent rights as soon as possible. We have some of the best and brightest individuals here at WARF so companies come to us to assist them with the research to get the patent rights for what could be the next big thing, even if there is limited upside in certain financial aspects. Unlike the pharmaceutical companies, we are not too affected by the FDA. Because we do the first stages of research, we don’t have to worry about any guidelines on our research process like a pharma company. With all of the extra knowledge that the industry has gained in the last 20 years, you would think there would be a new and more rational way of discovering drugs. Part of it may be the FDA approval scarcity, part of it the easier discoveries have already occurred. Many of the drugs going up for approval at the FDA, they don’t cure a certain kind of cancer but help outcomes and help with certain issues, but they are expensive. These aren’t fundamentally important medicines being brought to the FDA. People are more aware of how difficult it is to get a drug approved, but at the same time there is the public perception of va lue for these drugs, so it is important that drugs are well studied before they are put on the market, and the issue companies face with the FDA do not boil over into our research and proceedings.
The success of WARF has led to more research labs at the university doing life sciences work specifically and we still see some growth in this area. The grants have allowed universities like Wisconsin to create new types of research labs for the industry. There are select efforts at universities to do drug screening processes or other innovative trials that weren’t being done until recently.
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What advantages does WARF have as a non-profit organization?
A large amount of our funding comes from federal grants. We have individuals fighting for these grants and it creates a healthy, autonomous atmosphere and great competition between those vying for
the grants. The success of WARF has led to more research labs at the university doing life sciences work specifically and we still see some growth in this area. The grants have allowed universities like Wisconsin to create new types of research labs for the industry. There are select efforts at universities to do drug screening processes or other innovative trials that weren’t being done until recently. There is a breakdown of the system of drug development and we can leverage those and get a really big hit with a great compound that we can license out that can really provide a royalty stream and universities can do that more strategically because of our nonprofit status. There are a number of research labs at universities doing work in life sciences now, compared to 1960. It just happens to be because there has been funding, so there will be some constriction in labs working, some universities won’t get funding, and there won’t be the growth that we have seen in the 1990’s. I think there may be a little bit less research there, and a 2nd option for funding would be to lure in funding with private companies; less upside, won’t have IP to start with, and will need money to fund with. More like a partnership with a research university, and some schools will look into other foundations, like the Gates Foundation, depending on the area they are working in. Also, I think universities that have means will look at opportunities to self-fund some of that research. There are select efforts to do that, developing medicinal or drug screening process. Harvard has one, Emory has one, and a lot of people are playing in that area. You might see some schools who say, there is a breakdown of the system of drug development and we can leverage that and get a really big hit with a great compound that we can license out that can provide a solid royalty stream. Universities can do that more strategically. We also talk to venture capital companies and other private investors. As we know they invest with startup companies that are spawned with university research, it is not impossible that you can imagine a VC with significant resources to sponsor research to spinout licenses, but it would certainly take a lot of discussion that would come up with a plan that worked. While this isn’t very frequent within the industry, I do think it is another creative way to spark innovation and bridge that gap between research and commercialization.
LMG LIFE SCIENCES 2013