Public money needed to cross drug discovery chasm

The traditional end point of academic research – validating a biological target – is no guarantee of commercial value. A decade ago it was exciting to find a gene linked to a disease, but with the sequencing of the human genome there is a profusion of such targets. Now pharma and biotech companies want to see some hit compounds, toxicology and proof of principle in an animal model before they are prepared to in-license. And they want the package to come complete with intellectual property rights.

As a result academic institutions, publicly funded development agencies and medical charities are having to find the money to pay for preclinical development.

Two developments in the past week illustrate the lengths to which these bodies need to go. Scotland’s publicly funded technology commercialisation body ITI Life Sciences launched an international search for companies and academics to take part in a drug discovery programme in ubiquitin signalling that it is proposing to fund.

ITI singled out ubiquitin, which is involved in cancer, neurodegenerative, inflammatory and infectious disease, after carrying out a market scoping exercise in emerging drug targets. This showed that while ubiquitin and its associated pathways provides a rich source of emerging drug targets it remains relatively unexploited in terms of drug discovery.

Eleanor Mitchell, Acting CEO of ITI Life Sciences, said the field is at the right stage for ITI to fund in its role of bridging the gap between academic and commercial R&D: “We believe ubiquitin signaling is a very exciting area for drug discovery R&D, but at present it has not yet reached a level to attract substantial venture capital funding.”

Meanwhile in Queensland, Australia, TetraQ, a preclinical contract research and development facility set up with AU$8.1 million from state funds, had its official launch. Business Development Manager Rose-marie Pennisi said, “Australian biotech companies, universities, research institutes and the pharmaceutical industry now have access to a highly skilled commercial R&D service with a wealth of experience in the four core disciplines that are required in preclinical drug development.”

A market failure

Academic funding bodies have realised the need to pick up the burden of preclinical work if the research they support is to be translated into products.

In 2005 the European Investment Fund concluded that Europe is suffering a “market failure” in this area of technology transfer. This prompted the fund to set up a €8 million partnership with the Catholic University of Leuven in Belgium to establish a Centre for Drug Design and Discovery to work with targets both from within the university and from external sources.

One of the earlier such initiatives in Europe was taken by the Medical Research Council in the UK, which started to carry out preclinical work four years ago, and currently spends £4 million a year on its Drug Discovery Group.

This is small change next to next to the £91 million Seeding Drug Discovery programme unveiled by the research charity the Wellcome Trust in January.

When the scheme was launched Ted Bianco, Director of Technology Transfer at the Wellcome Trust, said the awards are for specified projects. “We are not putting money into companies to further the development of the company, but to speed the individual projects,” he told Science|Business.

It is expected to take five years to award all £91 million, which Bianco says will support 30 projects in total. All projects must be based in the UK, but the award winners may have international collaborators.  

“Our funding is designed to take the research forward to a point that makes these projects more attractive to venture capital firms, industry and public-private partnerships,” said Bianco.

Wellcome’s objective is to address unmet medical need. Potential market size is not a consideration and the Trust has no financial motive, though it will get a return if a product is a commercial success. “Our general stance is that we don’t portfolio manage,” says Bianco. “We are looking for scientific excellence backed by a good development plan.”

And so, while the first three projects funded under the scheme were in early stage spin outs, the most recent is based at the pharmaceuticals giant GlaxoSmithKline plc. The Wellcome Trust is putting £4 million into a collaboration to develop a new class of antibacterials to combat drug-resistant hospital-acquired infections.

The money will accelerate development of compounds in GSK’s portfolio, with GSK making a matching contribution in staff, equipment and other costs. The Trust will receive a financial return on any commercial product resulting from the collaboration.

Bianco justified spending the charity’s money with a cash-rich multinational, saying the public and private sectors must find creative ways to address antibiotic development. “Antibacterials are expensive to develop and may be held in reserve, limiting their market potential. It can be difficult, therefore, for companies to recoup their outlay in R&D costs.”

Focus on medical need

While the Wellcome selects its drug discovery projects from an open field of applicants, the MRC works solely on its own research. But again the focus is unmet medical need. In the past two years the unit has looked at around 55 targets; last year six were selected for screening, and the aim is to have two hit-to-lead programmes running at any one time.

Spending public or charitable money on activities that were financed previously by commercial investors can create tensions in academe. Which research projects should be singled out for investment, should the researchers be involved in the proof of concept study, how should success be measured?

One of the earliest such schemes, Scottish Enterprise’s £30 million Proof of Concept Programme, set up in 1999 to improve the level and quality of commercialisation within Scotland’s universities and research institutes, has been subjected to a number of independent assessments. The most recent, published in October 2006, said the £28 million invested to date would generate £125 million gross value added for the Scottish economy.

The evaluation also stated that 80 per cent of the projects would not have achieved commercial success without Proof of Concept Programme support.

The research, conducted by the consultants PricewaterhouseCoopers, examined the economic and wider impacts of the first six rounds of funding between June 2000 and June 2005. In that time more than 170 projects were funded, of which around 40 per cent were in life sciences.

Commenting on the report, Neil Bradshaw, chairman of UNICO (The University Companies Association), said the programme, “Is the envy of universities elsewhere in the UK.”

“This report demonstrates the real value it brings to bear and I would urge policy makers elsewhere in the UK to read it carefully and seriously consider the implementation of such a programme.”