The time is now: novel partnerships and funding models for accelerating science to the marketplace

FasterCures and Milken: A proposal for getting abandoned compounds off pharma shelves and into translation.

We are in a golden age of biopharmaceutical development, enabled by the convergence of technology and science. But much of the gold is left unmined because mechanisms are not deployed to develop all compounds that could have therapeutic potential.

While there is a diverse field of funding and operations to translate discoveries, there still aren’t sufficient mechanisms for different organizational types to transact and advance science to the market.

This issue is exacerbated when the expected commercial return is below the threshold required by traditional biopharmaceutical companies, or when regulatory hurdles pose challenges.

It’s an old story, and one we’ve heard far too often -- once deprioritized, compounds end up on company shelves, regardless of their potential to impact disease. A 2019 survey of life sciences executives showed that 83% plan to narrow portfolios for strategic reasons, such as a perceived unfavorable regulatory and reimbursement environment.

In this environment, neither patients nor science are served.

As biopharmas facing reimbursement pressures and competition for commercial capital prune and prioritize the programs in their pipelines, we are already starting to see the societal impact of their decisions.

We need new incentives and approaches to enable development of compounds that could benefit society, regardless of their commercial viability.

According to a series of BIO industry analyses published in 2018, VC funding for new therapies targeting many chronic diseases - including diabetes, depression, and pain - is low relative to their prevalence and cost to the system.

At the same time, alternative funding strategies like impact investing and venture philanthropy have grown such that this moment presents a compelling opportunity to solve it.

The toolkit of approaches includes company spin-outs, out-licensing deals, and even donations to non-profit or government entities, but there remain many more compounds than there are ways to develop them. And most avenues still require the compounds to provide returns to investors, meaning molecules that could help areas like pediatrics, antibiotics, and medical countermeasures lie fallow.

Critically, once compounds enter clinical trial pipelines, if they are discontinued, there are no ready-made processes to match those assets with sources of funding and new kinds of organizations with the desire to take those projects forward.

In effect, we need mechanisms to develop all promising science by activating all capital sources, creating a market for innovation in which the right funder gets access to the right science through efficient transaction structures. Moreover, we need new incentives and approaches to enable development of compounds that could benefit society, regardless of their commercial viability.

Personal price, collective cost

The Milken Institute engaged dozens of experts over the past several months, asking them about the vision for creating this more dynamic market that could advance all compelling science by taking advantage of all capital sources, from philanthropy to impact investing to traditional equity and debt markets. We asked them what their needs were, what roadblocks should be removed, and how would they go about solving the challenges.

It’s clear from the responses that more and more compounds are languishing, not due to safety or efficacy concerns. Rather, they are being deprioritized for commercial reasons. It’s also clear that resurrecting them with new tools and funding sources involves overcoming significant human and organizational factors.

Industry could do wonders for its reputation by displaying a renewed focus on ensuring that good science does not die because of commercial or strategic concerns.

For example, business and corporate development executives don’t have time in their day to find homes for molecules that don’t add enough to the company’s bottom line.

Moreover, many fear the career consequences of accidentally letting a good one get away. Who wants to be the person who gave away a billion-dollar opportunity?

Other times, the team that brought the innovation ends up leaving the company, taking with it the key knowledge about the compound’s biology and activity that could make partnerships possible.

Especially given the high levels of publicly funded research that feed its pipeline, industry has a responsibility to help find good homes for these molecules. Further, in the current political environment, industry could do wonders for its reputation by displaying a renewed focus on ensuring that good science does not die because of commercial or strategic concerns. When companies cut portfolios that may have benefit to patients, the industry takes a collective blow to its reputation among the public. Cuts in investments in global health and antibiotic development are prime examples.

A network of models

The good news is that, once organizational barriers are overcome, there are models to follow.

Patient groups are already having an impact by looking to non-profit models. For example, the Bill & Melinda Gates Medical Research Institute is committed to developing products for malaria, tuberculosis, and diarrheal diseases. A network of these non-profit drug developers could accept compounds with the possibility for patient impact but lower or no ROI, because they are not competing for the same types of funding as traditional biopharmaceutical companies.

Similarly, social impact investing and venture philanthropy are rapidly expanding, risk-tolerant sources of capital that can accept lower returns in exchange for patient and other social impacts.

The Global Impact Investing Network (GIIN) reports that over $82 billion in global impact investing assets accept returns that are below-market-rate or close to capital preservation.

In the biomedical arena, one can look to the successes of the Cystic Fibrosis Foundation to see how foundations can spur the development of therapeutics for their constituents, as well as generate returns. And in 2016 The Leukemia & Lymphoma Society launched the first cancer master platform trial led by a non-profit - the Beat AML Master Trial.

Similarly, The Michael J. Fox Foundation For Parkinson’s Research is accelerating the pace of science. The Fox Trial Finder matches Parkinson’s patients with appropriate clinical trials and speeds recruitment for researchers, and recently approved Inbrija, an inhaled formulation of levodopa from Acorda Therapeutics Inc., was developed responding to patient concerns in their network.

Efforts such as these can bring down clinical trial costs substantially due to better recruitment and retention. And because they are non-profits serving patient constituencies, compound selection can be more in line with patient needs. As a result, savvy patient groups could be a key ally in externalizing good, patient-centric innovation with lower financial returns. The key is to find ways to align the risk and return profiles of a spectrum of investors to facilitate the development of all promising compounds, regardless of commercial prospects.

There is no shortage of possibilities for incentives that encourage greater placement of good science into good homes. Historically, there has been a shortage of collective will to implement these kinds of solutions. But with changes in the biomedical ecosystem, we believe that is changing. Patients want more from society’s investment in science. The time is now to meet this challenge head on, and adopt the mechanisms, models, and approaches that will save lives while advancing science

Tanisha Carino is executive director, and Colleen Rye and Sung Hee Choe are directors at FasterCures, a Center of the Milken Institute; Christopher Lee is director and Michael Piwowar is executive director of the Milken Institute Center for Financial Markets.

Companies and Institutions Mentioned

Acorda Therapeutics Inc. (NASDAQ:ACOR), Ardsley, N.Y.

Bill & Melinda Gates Medical Research Institute, Cambridge, Mass.

Biotechnology Innovation Organization (BIO), Washington, D.C.

Cystic Fibrosis Foundation, Bethesda, Md.

Global Impact Investing Network (GIIN), New York, N.Y.

The Leukemia & Lymphoma Society, White Plains, N.Y.

The Michael J. Fox Foundation for Parkinson's Research, New York. N.Y.

Milken Institute, Santa Monica, Calif.

User Sign In

Article Purchase

This article may not be distributed to non-subscribers

PURCHASE THIS ARTICLE FOR LIMITED ONE-TIME DISTRIBUTION AND WEBSITE POSTING $995.00 USD

PURCHASE