Academia in drug development

Being part of academia, I almost never think much of what sort of financial rewards that could result if I ever managed to develop a successful new drug, other than the altruistic benefit to humankind, plus perhaps a dollop of credit to myself and as many publications and speaking invitations as I can milk out of it. Certainly the potential financial rewards of developing a successful drug are rarely realized by academic investigators, who usually end up selling their patent rights to a pharmaceutical company for relatively little money. (The pharmaceutical does the expensive heavy lifting of getting the drug to market, while the academic researcher gets the line on his or her CV listing the patent.) Indeed, the most I ever made from my one patent was around $20,000 over several years, and the treatment never made it past all the hurdles necessary to become a viable, marketable drug. I also can't help but note that that's more than the vast majority of translational researchers ever make from their work, and it only came about because my Ph.D. thesis advisor was fair and generous enough to give me half the credit for a discovery I made while workign in his lab. In any case, I'm not really in it for the money. I'm in it for the intellectual stimulation, the chance to discover new things about cancer, and, if I'm really persistent, smart enough, and lucky enough, perhaps to improve an existing treatment or even discover a new treatment for cancer. I daresay that the same is true for most academic physicians.

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.
Wow. That's some righteous bucks those pharmaceutical companies are paying the Emory. According to the Emory's intellectual property rules, the University will get the lion's share, to be reinvested into its research programs, and the investigators will get a minority share. Still, according to Derek Lowe:
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.
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:
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. . .
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.


  1. If you work in industry, you sign your rights away, to any patent, before you are employed, but it does get into one's performance review, that year.

  2. "and it only came about because my Ph.D. thesis advisor was fair and generous enough to give me half the credit for a discovery I made while workign in his lab"

    I hate to burst your bubble on this one but the law requires you to be the inventor. I have no doubt that your advisor was fair and generous but that really isn't an issue in regards to inventorship. All inventors must be listed on the patent and all those listed must have participated in the invention process. The lab tech that runs the gels doesn't become an inventor but the Ph.D. candidate that devised the research project is the inventor - the advisor might be the one left off the patent depending on how much, if any, inventorship s/he provided to the project.

    Funding also does not have a bearing on inventorship. Merck, your advisors grant, departmental start-up funds or cash from your parents may have funded the project but again, only the inventor can be listed on the patent. This might cause all sorts of political problems in academia, which I have witnessed, but it is the law.

    Licensing rights are a different story and if one is in academia (or industry as mentioned above), you sign away your licensing rights in your employment contract (remember - you would still be the inventor). An inventor might receive a small $% which will vary from institution to institution but the monetary rewards fall almost completely to the license holder.

    Cheers all

  3. As someone not in the medical field, I do find the research and development end fascinating.

    I for one think that extending the time before a generic is avaliable would be a great step to srur even more R & D and may even force pharmaceutical firms to look to colleges for ideas.


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