Academic research has contributed immensely in advancing the frontiers of disease biology, especially from a systems biology context, and in identifying potential therapeutic targets. The biotechnology and the pharmaceutical industries, standing on the shoulders of academic research and savoring the fruits of academic innovations, contributed to the discovery and development of new drugs [1]. Historically, academic research into basic biology unraveled new targets and pathways of potential therapeutic value. The pharmaceutical companies followed, for the most part, closed business models in pursuing therapeutic targets. In recent years, a number of factors have impacted the success of closed business models; these include, among others, expiring patents on blockbuster drugs, the flooding of the market with low-cost generics, escalating research and development (R&D) costs, and the introduction of a large number of “me-too” drugs. At the same time, dwindling funding to academic basic research projects has resulted in changes in the academic mind-set, making academia now more open to focused industry-funded projects and mutually beneficial technology transfer arrangements. Pharma has now adopted a more open business model and is making an increased capital and personnel investment in setting up collaborations with academia in the areas of target identification and validation, probe development, and early drug discovery. In addition to collaborations, pharma has made available to public consortia various complex data sets for public access and mining. This open innovation paradigm is designed to generate new ideas and seek global expertise in bringing more effective and safe drugs to the market. This new developing relationship between industry and academic partners with divergent ideology and overall goals is still in the primordial stage; its success requires a constant evaluation of work flows, timelines, and communication infrastructure at the pharma–academia interface, to further strengthen the open innovation and collaborative research.

Against the backdrop of economic recession that we have just experienced, the venture capital investment in start-ups with new innovation technologies has sharply declined, and the funding to existing biotech companies was significantly curtailed. This purported lack of promising biotech ventures has affected the earlier biotech acquisition strategies of big pharmaceutical companies to feed their drug pipelines. In addition, one-third of the patents on blockbuster drugs have expired in the last couple of years. These and other factors have pressured big pharmaceutical companies to undergo major restructuring and to redefine their business models. A large number of pharmaceutical companies have also avoided the high costs associated with in-house R&D projects [2]. Pharma, over the last few years, has either outsourced R&D to other global markets, especially China and India, or has extended collaborations with domestic academic institutions. With cuts in federal funding for basic research, academic institutions are seeking investments from all sources, including pharmaceutical companies, nonprofit organizations, and philanthropies as well as the National Institutes of Health (NIH). An increasing number of academicians are willing to invest intellect and time to procure funding for early and translational drug discovery research. In the environment of financial and innovation challenges, this decade is witnessing a new phase of intense pharma–academia collaborations for the advancement of drug discovery. The collaborations, which range from small contracts to large investments, are still a work in progress. This learning process has highlighted the need for a better understanding of the core missions and driving ideology of collaborating partners.

Pharmaceutical Industry’s Perspective

Research in the early discovery phase has focused primarily on target validation and translation of basic research into applied drug discovery. In this aspect, drug discovery research in the pharmaceutical sector has relied heavily on the information published based on academia’s long-term, basic research studies on biomolecules and their roles in normal physiology and in disease. Pharmaceutical companies have revolutionized modern drug discovery and are responsible for evolving compound screening to a highly integrated and automated process, capable of delivering large quantities of high-quality data output. Pharma has developed reliable platforms for hit-to-lead development and associated large-scale data processing and management over the last 25 years. Pharmaceutical sector research has contributed largely to the applied science of drug discovery, through improvements in drug candidates’ clinical performance, and to a limited number of significant scientific discoveries in basic science. The arduous and costly process of drug discovery and development includes long periods of drug candidate optimization and preclinical development. The time from drug discovery to approval can take up to 15 years, and, based on drug approval data from 2010, the average cost of bringing a pharmaceutical product to market is between $0.8 and $1.3 billion [3]. This cost includes the cost of failed candidates since only 1 out of 10,000 to 50,000 potential candidates succeeds in late-stage drug approval. Today’s expenditures on drug discovery are at least 10 times more than that of the 1990s. Project failures and high attrition rates in pharma may be traced to a lack of safety and efficacy and selection of therapeutic targets with unattractive toxicobiology properties.

A number of big pharmaceutical companies have succeeded in marketing a very limited set of blockbuster drugs in the last two decades [1]. Although an average of 30% of marketed drugs recoup the return from R&D investment, the majority of drugs lose out on market competitiveness [1]. The return on investment equation is also influenced by the redundancy of “me-too” drugs as well as by the patent’s life span. The U.S. Food and Drug Administration classified three-fourths of the 119 drugs it approved in 2004 as similar to existing ones in chemical makeup or therapeutic value [4]. Also, the patents for most of the marketed drugs, which would previously have allowed a competitive advantage and therefore a return on investment, are due to expire in the next few years and are projected to challenge the bottom line of most of the pharmaceutical companies [5]. The increased regulatory demands for greater safety and efficacy, and the need for increased postmarketing surveillance, have also added to overall lower productivity [6]. In addition to the return-on-investment problems, pharma faces innovation challenges, since the low-hanging fruit (i.e., drugs for all easily druggable targets) have been discovered and developed [7]. The less tractable targets have remained unexplored due to the associated issues of R&D time and cost. The big pharmaceutical companies are trying to circumvent drying pipeline and productivity issues by following new business models, including acquisitions of micropharma [8] and in-licensing biological drugs/biologics that have proven marketability,^* as well as by collaborating in preclinical research with academicians.

Academia’s Perspective

The mission of academic universities is based on conducting research to acquire and expand new knowledge through study, discovery, and inquiry. Academia has always been involved in the education and training of students and in advancement of science through freedom of learning and not through return on investments or to solve real-world problems. The major acceptable outcome from federally funded research is scientific reports and publications that are made available through public databases. Despite the freedom of research in any area of interest, not strictly those areas dictated by commercial interests, academia has made significant direct and indirect contributions to the field. These contributions have been oriented primarily toward understanding of diseases and secondarily toward drug discovery. A detailed study recently reported that in the last four decades, 153 new Food and Drug Administration (FDA)-approved drugs, vaccines, or new indications for existing drugs were discovered through research carried out by publicly funded research investigators [9]. These drugs included 93 small-molecule drugs, 36 biologic agents, 15 vaccines, 8 in vivo diagnostic materials, and 1 over-the-counter drug, most of which were used in the treatment of cancer or infectious diseases treatment. There was always the recognition that academia’s basic research provided pharma with a continuous flow of essential basic information for translation into applied and clinical drug development, but the evidence shows that academic research has not only provided basic information on biomolecules and pathways, but has also resulted in competitive patents over the biologics used in the treatment of certain diseases. The traditional academic disdain for partnerships with industry and corporate-dictated research has also undergone a major change of perspective in the current fiscal environment. Academic universities and institutes recognize the need for collaborating with industry for the much-needed dollars and resources for their own survival and are reaching out to the pharma to establish new alliances [10].

The formation of academic partnerships with industry was also facilitated by changes in intellectual property rights to accommodate the two ideologically distinct collaborating partners. Earlier, the government solely owned the intellectual property rights for all discoveries arising from federally funded research. For over 20 years, only a small fraction of the patents owned by federal government were commercially licensed. With the promulgation of the Bayh–Dole Act, universities, hospitals, and nonprofit and federal research institutes obtained complete ownership and control over their inventions and intellectual property resulting from federally funded research [11]. Under this new approach, inventions from nonprofits and universities were converted into intellectual property and transferred through license agreements to the private sector for commercialization and public use. Inventions could also be published in scientific literature after the patent was filed. The ability to acquire patent rights encouraged the establishment of technology transfer offices in many university campuses. These offices mediate all legal negotiations between the investigators or departments and the pharmaceutical companies.

Open (Collaborative) Innovation: A New Business Model

An analysis of the drugs approved in Europe and the United States reveals that a relatively small percentage of new chemical entities add to therapeutic value, while a vast majority of approved drugs fall in the category of “me-too” drugs having redundant properties of previously approved drugs. Pharma’s drug discovery pipelines were routinely fed through internal target validation as well as through mergers and acquisitions of biotech companies. With the reduced venture capital investment in the biotechnology sector and small start-ups and the reduced R&D investment in big pharma, a new mutually beneficial business model has emerged, which promotes collaborations between industry, the government, and academia for bringing better, more diverse, and cost-effective drugs to the market. In the current fiscal environment, it is not profitable for the industrial sector to perform closed-door comprehensive basic research on potential therapeutic targets. Since the core strength of academia lies in its pursuit of all known and unknown aspects of biology, the academic scientists have an edge in identifying, understanding, and validating molecular targets for various diseases, developing assays, and to some extent, in probe discovery [10, 12]. These diverse, yet complementary sets of mission interests warrant active and profitable collaboration between industry and academia. To bridge this innovation gap while still competing for products, pharma needs newer strategies and business models for working on efficacious and novel therapeutic targets, finding molecules to query new drug targets, and developing smart lead optimization strategies [13, 14]. Pharmaceutical companies are leaning increasingly toward an “open innovation” approach, a concept coined by Professor Henry Chesbrough, University of California at Berkeley [15]. Open innovation is a business model in which the companies seek diverse paths to market through collaborative and open exchange of information and ideas. To be more profitable and productive, and to increase innovation toward developing new therapeutics, the pharmaceutical industry has embraced the open innovation approach as part of its new business plan to share the drug discovery processes and data with academia [16]. The open innovation approach is designed to tap into global expertise and talent to generate new ideas, new interpretations, and a new way to approach bottlenecks and problems. For example, Transparency Life Sciences,^* a New York-based biopharmaceutical company, has launched an open innovation approach to design more patient population-centered, effective, and productive clinical trials for unmet medical needs by incorporating inputs from doctors, patients, and their families. The goal of the company is to revitalize and design productive clinical trials for previously shelved compounds with demonstrated efficacy and safety profiles.

Drug Discovery through Collaborations

The focus of the seemingly diverse pharma–academia collaborations covers target identification and validation, bioinformatics analysis of complex data sets, treatment of diseases using stem cells, and development of biologics and natural products. Treatments are only available for less than 3% of the numerous diseases that afflict mankind. FDA-approved drugs target less than 0.5% of the entire human genome, with 289 drugs targeting just 133 genes. A large proportion of human genome remains unexplored for druggability [17–19]. The target selection in the pharmaceutical sector has largely been decided by risk tolerance, druggability, return on investment, and shareholder profitability. Diseases for which a large patient population exists bring in more revenue for the pharmaceutical industry and are preferred over rare disorders afflicting small population groups and projecting smaller revenues [20]. In general, the low-risk and high-reward approach has resulted in pharma being too conservative and restrictive in its therapeutic drug target selection, and has led to the development of several “me-too” drugs [20]. On the other hand, academic research is not defined by any boundaries, and research includes not only the widely pursued biological targets but also high-risk and low-reward biological targets from which pharma shies away (Figure 5.1). The continuously expanding knowledge pool from systems biology, genomics, molecular biology, and cell signaling has brought into focus the complex processing of biological information and biological responses via both hierarchical and parallel networks. Thus, any target biomolecule as well as chemical or biological probes and compounds have to be evaluated in the context of the complex biological networks. These studies will fill the innovation gap, promote design of drug candidates that are more efficacious, and lend confidence to drug discovery partnerships between academia and pharma. While academic input in data interpretation and basic mechanistic research is of value to pharma–academia collaborations, academia is also required to consider and value the experience of pharma in developing adaptable, high-quality assay technology formats to de-orphanize the highly refractory targets and make them amenable for standard drug discovery processes. In the new relationship, academia performs more focused, reproducible, and timeline-based research to lay a solid foundation for transition to late drug discovery workflow.

In the majority of collaborations financed by pharmaceutical companies, the academic scientists, either alone or in collaboration with scientific personnel from pharma, work toward target or novel pathway identification, characterization, and disease relevancy. Pharma then uses the information to translate basic science into drug screening and optimization campaigns. For example, Merck and Harvard Medical School are collaboratively studying novel signaling pathways in the bone-growth pathway. The AstraZeneca and Columbia University partnership includes collaborative development of research plans and protocols for identification of the biology and mechanism of targets in diabetes and obesity. In 2010, Pfizer, Inc. established the Centers for Therapeutic Innovation (CTI) to promote innovative translational research partnerships with academic medical centers on a global scale. The academic scientists work collaboratively with Pfizer’s staff and have access to Pfizer’s proprietary tools and technology. At least 20 such centers have been set up with academic institutions in Boston, New York City, Philadelphia, San Francisco, and San Diego.^* In other instances, collaborations are centered on applying stem cell therapies or development of biologics for treatment of diseases or in rekindling research around previously shelved projects. For example, the University College London (UCL) established two distinct collaborations exploiting its expertise on stem cell replacement therapies. AstraZeneca and UCL are collaborating on stem cell therapies for the treatment of diabetic retinopathy. Collaboration between UCL and Pfizer was set up to utilize Pfizer’s expertise in drug design and delivery to advance the work of UCL researchers in the field of stem cell-based therapies for age-related macular degeneration. Much of such collaboration is listed in Table 5.1. In another approach, Eli Lilly has established the PD2 Initiative,^†

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