A new model of industry-academia collaboration being applied by a pharmaceutical giant is very rapidly turning university innovations into start-up companies — and in many cases just as quickly shutting the start-up down if the technology fails to reach early milestones. And it’s launching these test beds for early-stage discoveries outside traditional technology transfer operations.
Interestingly, the tech transfer exec at one school where the drug company-sponsored program is in place says it actually fixes some of the frustrations with traditional tech transfer. Indeed, she says it’s the “most brilliant” program she’s ever experienced. Even better, other universities should be able to replicate the successful program fairly easily.
The novel arrangement accelerates technology transfer through systematic “NewCo” formation. In place since 2011, the GlaxoSmithKline plc program partners the drugmaker with academic institutions in what it calls “Discovery Partnerships with Academia,” or DPAc.
Part of the DPAc model involves a separate partnership between GSK and California-based venture capital firm Avalon Ventures, which invests in the start-ups alongside GSK and helps move them forward. Avalon finds the technology, provides management, and ensures the fledgling companies meet their milestones. If the start-ups hit their milestones and appear to hold real promise for the drug maker, GSK then pays Avalon an acquisition fee up to a maximum of $50 million.
For its part, GSK provides most of the initial investment — up to $10 million — to establish and fund the start-ups, and also lends its expertise in drug development and clinical testing, which is often lacking in NewCos, notes Carolyn Buser-Doepner, PhD, who heads the DPAc initiative for GSK. The NewCos are each located within the affiliated incubator of COI Pharmaceuticals, based in La Jolla, CA.
“Why does this make sense?” she asks. “It’s almost too obvious. Universities have academics who are very focused on their disease of interest. Pharma has the expertise to develop medicines. Combine the two with one end goal.”
Avalon plays a key role, notes Jay Lichter, PhD, CEO and president at COI. “This is a financial instrument, there’s no question about that,” he says. “It’s all about company creation.”
After Avalon identifies a novel innovation for potential creation of a new company, GSK and
Avalon jointly perform diligence. Avalon establishes the NewCo, negotiates all licenses for it, and launches product development. “We give it a name,” Lichter says, “and a little bit of a brand.” The initial infrastructure, staffing and oversight are provided by COI, he adds, in careful collaboration with GSK scientists. There are pre-set terms for investment and acquisition by GSK at the clinical candidate stage.
All the individual pieces are familiar to tech transfer professionals, but the overall structure may not be. “The DPAc model is very different from most types of industry-academic interactions negotiated by TTOs,” Buser-Doepner says. “The structure of a DPAc agreement is a hybrid between an academic collaboration and licensing agreement.” A detailed article on the DPAc model of industry-university collaboration appears in the May issue of Technology Transfer Tactics. To subscribe and access the full article, and also gain access to the publication’s 9-year archive of best practices, case studies, and TTO success strategies, CLICK HERE.