Friday, June 27, 2008

Improving your Risk-Reward Ratio Could Depend on Who Your Partners Are

Breaking away from the traditional model of financing medical research, biotechnology companies have started turning to nonprofit disease research organizations not only for their leadership, patient network and advocacy clout, but also for their financial capital. A panel of nonprofit leaders and biotechnology executives at this year’s BIO convention, organized by FasterCures and moderated by Margaret Anderson, FasterCures Chief Operating Officer, unanimously concurred that new paradigms are needed and that therapeutic outcomes are not likely to come out of academic research centers.

At FasterCures, we believe that one of the most significant impediments to accelerating progress toward cures is the difficulty of transforming research with therapeutic promise into marketable, profitable products that help patients. To address this major roadblock, there are growing numbers of biotech companies beginning to forge new and innovative alliances with nonprofit research foundations to reach new product development milestones. And many of the nonprofit research foundations understand that the only way their work will ultimately help the patients they serve is if they can "hand off the baton" at some point to an entity that makes products and can get them to patients.

Free of the imperatives of publication and career advancement in academia and the bottom-line imperatives of the private sector, disease research foundations are ideally positioned to make relatively high-risk investments that could significantly move a field of disease research forward and increase the likelihood that other parties will also invest.

Panel highlights:

  • Ted Yednock, Executive Vice President and Head of Global Research at Elan Corporation, said its relationship with the Michael J. Fox Foundation has "increased the company’s exposure to cutting-edge science."
  • Russell "Rusty" Bromley, Chief Operating Officer of the Myelin Repair Foundation said that this new model for medical research allows the foundation to "recognize, overcome hurdles, and remove friction" in the processes of drug discovery.
  • Vertex Pharmaceuticals President and CEO Joshua Boger points to its partnership with the Cystic Fibrosis Foundation as a model for closing the gap in treatment for diseases with small or no markets. Additionally, Boger said this partnership energized employees, stimulating renewed commitment to finding a cure for cystic fibrosis.
  • Another example of a successful partnership is between the Multiple Myeloma Research Foundation (MMRF) and Proteolix, Inc. Louise Perkins, Director of Research at the MMRF, talked about the many initiatives MMRF is engaged in to aggressively find a cure for multiple myeloma.
  • Lori Kunkle, Chief Medical Officer at Proteolix, discussed how this partnership yielded greater enrollment in clinical trials, allowing them to accelerate their schedule, broadened exposure to multiple uses of a particular drug and allowed Proteolix to make early decisions about whether to move a compound forward in he development process.
For-profit biotechnology companies look to nonprofit disease research organizations for strategic and intellectual guidance as well, allowing access to a broad and deep arsenal of disease-specific research, patient networks, and advocacy tools.
Panelists acknowledge that the bottom-line drivers differ for each partner. On the for-profit side, profit drives the quest for innovation, while for nonprofit foundations the ultimate goal is finding a cure for the disease. The need to accurately understand the drivers and pay-offs for each partner is vital in ensuring a successful relationship; a model that’s beginning to change the paradigm of our medical research enterprise.
Many analysts believe that a "paradigm shift" is occurring at many pharmaceutical companies, which are realizing that relying on the blockbuster drug model for profits is no longer a viable business model and that – particularly as personalized medicine becomes a reality – there is a role for therapies for niche markets in their pipelines. These new business models require new partners, and hopefully the BIO meeting continued to nurture some of those existing relationships and the ones that are beginning to grow.

More discussion of these issues can also be found in our newly released report, Entrepreneurs for Cures, available to download now.

--Cecilia O. Arradaza, Communications Director, FasterCures

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