Academia in drug development
Of course, pharmaceutical companies look at it a different way. They're in it for profit, and have to get their drug through all the regulatory hurdles and to market with enough time before its patent expires that they can actually make back the up to $1 billion it can take to develop the drug and still have time left to make a profit. That's part of the reason that it takes a different mindset to succeed in a biotech or pharmaceutical company. Indeed, scientists in the drug industry sometimes look down their noses at academia's attempts to develop drugs, as academia sometimes looks down its nose at attempts by biotech and pharmaceutical companies to do basic research.
Now, via In the Pipeline, I've discovered an example of an interesting example of a successful drug coming out of academia, namely the antiretroviral drug emtricitabine:
Gilead Sciences, Inc. (Nasdaq: GILD) and Royalty Pharma today announced that the companies have entered into an agreement with Emory University providing for the purchase of the royalty interest owed to Emory for emtricitabine, also known as Emtriva®. Under the terms of the agreement, Gilead and Royalty Pharma will make a one-time cash payment of $525 million to Emory in exchange for elimination of the emtricitabine royalties due to Emory on worldwide net sales of the product. The transaction, which is subject to customary closing conditions, is expected to close on or before July 29, 2005.
Gilead and Royalty Pharma will pay 65 and 35 percent, respectively, of the $525 million cash payment to Emory. Following this transaction, Gilead will be obligated to pay to Royalty Pharma royalty revenue based on all future emtricitabine net sales relative to Royalty Pharma’s contribution to the Emory royalty buyout. Gilead will continue to have obligations to pay certain royalties to GlaxoSmithKline, fulfilling Emory’s obligations under a previous agreement. Within 30 days of closing, Emory and certain inventors of emtricitabine may acquire interests in Royalty Pharma approximating up to 25 percent of the proceeds payable by Royalty Pharma in the transaction.
That's some incentive, even if the odds of my ever producing a drug or treatment that would net me that much money are probably only marginally better than my odds of winning the Mega Millions Jackpot. Heck, even my odds of ever producing another drug that would even bring me another relatively paltry $20,000 sometime in the next decade aren't all that promising. On the other hand, even if the odds are long, the investigator does at least share in the proceeds that come from his or her work, as long as he or she works for a university with a reasonable intellectual property policy. Compared to industry, that's not bad at all:And the deal provides that the University itself gets 60% of that, with the rest to be split between Liotta, Raymond Shinazi (on the medical side), and former Emory researcher Woo-Baeg-Choi. That is 210 million dollars to be split between the three of them.
Yeah, but what are the odds? It seems to me that drug development in academia is a bit like being an entrepreneur, except the odds of a big payoff are much lower--but so are the risks.I can tell you that if I come up with a winning drug here in industry, I'll likely get promoted, and may well even see a bonus. But I will most definitely not see any seventy million dollars. Maybe this academic model for drug discovery has something to it after all. . .