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Research Institutes Are Now Searching For Cures and Profits

José Luis Millán

As public funding for medical research grows scarce, academics in San Diego are increasingly turning to Big Pharma to help them translate science into dollars.

One local research institute just made a huge stride in that department, launching a clinical trial with a pharmaceutical giant that could lead to millions in new revenue.

The clinical trial will assess how humans respond to an experimental drug that has its roots in the Sanford Burnham Prebys Medical Discovery Institute (SBP). Researchers hope the drug will help manage calcium buildup in soft tissues and blood vessels. That means the drug may be useful against heart disease, which was a $129 billion market in 2015.

Since SBP’s expertise is in academic research (not drug development), the organization is partnering with Japanese drugmaker Daiichi Sankyo to help carry out the trial.

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The foundational science for the medicine came from the labs of José Luis Millán, an SBP professor and a more than 40-year veteran of the institute.

If the medicine reaches the market, it could be a significant source of revenue for the institute, which has historically relied on government funding and philanthropic gifts to fuel its research. As academics increasingly turn to industry to help shore up their funding gap, some worry about a possible downside.

NIH’s Shrinking Role

Academic institutes such as SBP get most of their funding from grants issued by the National Institutes of Health (NIH). Last year, the NIH issued $925 million in grants to San Diego companies and institutions. But NIH dollars are increasingly in short supply, as the agency’s budget has remained flat for decades.

“When you factor in inflation, that means the NIH budget has actually gone down,” said Greg McKee, president of innovation-focused nonprofit Connect in an interview earlier this year.

McKee said years of low federal dollars has led the research community to find new ways to stay afloat. Last year, he saw a trend of many local institutes looking for ways to commercialize their research.

The concept was fairly new, as many academic research institutes focus on what scientists call “basic research,” which often generates new ideas or theories that don’t have immediate applications. Academic centers doing basic research normally have no intention of commercializing their discoveries. Instead, they push the envelope of fundamentals, often leading to discoveries that help us better understand biology and other scientific fields.

But academic institutes need money to continue their work, and money is in short supply. So they’re searching their labs for promising research that could be translated into products.

Diversifying Revenue

Michael Jackson, an executive at SBP, focuses on that goal in his role as senior vice president of drug discovery and development. He said SBP launched an initiative more than a decade ago to find brand new “druggable targets,” the industry’s term for proteins or other biological targets that could be developed into medicines.

“It was a deliberate strategy to diversify our revenue, with the recognition that NIH funding has been fairly flat and highly competitive to obtain,” Jackson said. “The cost of research is not getting cheaper, so we needed to diversify our funding resources.”

SBP has been working on this goal since 2005, Jackson said, but the initiative was formalized in 2009 with the launch of the Conrad Prebys Center for Chemical Genomics. That center, which employs 80 people, has been working away at finding druggable targets that might make interesting products. After more than a decade of looking, this new drug program with Daiichi is the first experimental drug that has made it to human trials.

One Marketable Drug

Jackson said all SBP would need is one big win to make a significant impact on the organization’s bottom line.

“One drug (that reaches the market) would be plenty,” Jackson said. “On a $1 billion drug, even if you got a modest royalty stream, it would bring in tens of millions of dollars per year.”

And SBP isn’t the only research institute that’s realized this. Another academic center, The Scripps Research Institute (TSRI), has long been pursuing partnerships with industry to translate research into products. In fact, one of San Diego’s biggest biotech successes, Receptos Inc., had roots in TSRI’s labs. Receptos and its lead drug, Ozanimod, was acquired by Celgene Corp. for $7.2 billion in 2015. Ozanimod, a drug in late-stage trials to treat multiple sclerosis and ulcerative colitis, was first invented at TSRI. That means the research institute will soon receive royalty payments on the drug’s sales.

Effect on Research

Although these new financing strategies help stabilize academic centers in times of financial stress, there is some concern that partnerships between pharma and academic research could have negative consequences.

Matthew Hoss, a scientist who’s worked at two pharma giants in San Diego, said that drugmakers rely on basic research to fuel innovation. If academic centers walk away from basic research in pursuit of more commercially viable research, then the pipeline of new discoveries may dry up.

Hoss said typical drug discovery and clinical trials take anywhere from five to 10 years, while academic researchers often invest decades characterizing new biological pathways and mechanisms that make these pharma breakthroughs possible.

“If research institutes move away from basic science, it will speed the development of treatments in the short term, but long term will hinder our ability as a society to innovate,” Hoss said in an email. “Basic research holds the promise of developing a more full picture of the human biological system, and providing researchers with all of the tools and information they will need to develop the next generation of drugs.” 

‘A Lot of the Puzzle Missing’

Jackson agreed that the shift toward translational research in place of basic research could be a problem in the long-term.

“As it turns out, we still don’t know enough about biology and disease,” Jackson said. “There’s still a lot of the puzzle missing. Our purpose is to look at approaches pharma is not ready to tackle yet. If all research institutes stopped doing basic research, all of that would dry up.”

But Jackson said SBP and other local research institutes are not abandoning basic research, they’re just adding new departments that help make basic research more relevant to patients.

“We are just accelerating that process, and de-risking certain areas for pharma to pursue,” Jackson said.

A good example of that acceleration is SBP and Daiichi’s new drug candidate, which is now entering the first stage of human trials. The medicine’s safety and efficacy will need to be tested in a series of trials before it can reach the market. But if approved by regulators, the medicine would create an entirely new class of drugs.

“In the world of pharmaceuticals, people tend to copy each other,” Jackson said. “Of the 30-or-so new drugs approved each year, very few are novel. When you come up with a completely new class of drugs, that’s a major landmark. It’s tangible evidence of your contribution to patients.”

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