Gail Cassell, Ph'D'

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When Policy Affects Innovation At the
Crossroads Between Academia and Industry
American Institute for Medical and Biological
Engineering (AIMBE) 16th Annual Event
American Institute for Medical and Biological
Engineering (AIMBE) 16th Annual Event
Gail Cassell, Ph.D. Vice-President for
Scientific Affairs and Distinguished Research
Scholar for Infectious Diseases Eli Lilly and
Company
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What are the most important drivers of innovation
in new medicines?

• Market-based pricing
• Intellectual property protection
• Predictable, expeditious regulatory climate based
  upon sound science and innovative leadership
• Sustained public support for basic research and
  policy environment that protects current
  complimentary and synergistic roles of public and
  privately funded research

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What are RD roles in development of new
medicines?

• Traditionally
• Academia Government basic research
  training
• Industry applied and translational
• Current
• Gap between fundamental and applied more
  narrow blurred boundaries

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What factors contributed to blurring of
boundaries?

• Founding of biotech industry on university
  licenses beginning with Genentech 1976
• Facilitation of technology transfer by passage
  Bayh-Dole Act 1980

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Bayh-Dole Act Triple Helix

• Yet the nature and scope of this economic
  partnership have outpaced what was originally
  intended and have developed into a highly
  interwoven relationship extending to all levels
  of academia and the research enterprise,
  including policy makers at the state and federal
  levels, resulting in potential conflict of
  interest and commitment.

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Reasons for Potential Conflicts of Interest and
Commitment

• Diversity and numbers of players and
  stakeholders.
• Enormous financial stakes at risk for both public
  and private sectors.
• Poor understanding of biomedical research in
  general (and drug development specifically) leads
  to misperceptions and lack of trust amongst all,
  most importantly the public.

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NIH Emphasis on Translational Research

• Road Map
• - Re-engineering research (CTSA)
• - Public/private partnerships
• - Drug Development HTS, chemical libraries
• NIAID Biodefense Research
• - 1.7 bil Countermeasure development (drugs,
  vaccines, diagnostics)

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The UC Connection

• 1 in 3 public biotech firms in the US are within
  35 miles of UC campus
• 1 in 3 California firms were founded by UC
  scientists . . .
• . . . including 3 of the worlds 7 largest
  Amgen, Genentech, and Chiron
• 85 of California firms employ UC alumni with
  graduate degrees

Source IUCRP Working Paper (2003)
Assessing the Role of the University of
California in the States
Biotechnology Economy
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San Diego Pharma Research Institutes
Lilly
Pfizer
Sorrento Valley
Novartis
JohnsonJohnson
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Profile University of California extramural
fundingHow it breaks down
ClinicalTrials 8.92 million
NIH1.5 billion
10 campuses with 5 medical centers
Industry148 million 465 firms
Other5.8 million
Other122million
BasicResearch1.38 billion
BasicResearch50.6 million
ClinicalTrials92 million
Other Training grants, material transfer
agreements, equipment, fellowships,
etc.
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2003-04 Biotechnology Companies with Initial
Public Offerings (IPOs)
University Shareholder(s) 41
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None 59
Recombinant Capital www.recap.com
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2003-04 Biotech IPOs with Equity To Academic
Faculty

• ACADIA -- 0.1M (C) 5.6M (F)
• Alnylam -- 3.0M (C)
• Barrier -- 1.9M (C)
• CancerVax -- 62.2M (C)
• Corcept -- 36M (C) 36M (F)
• Corgentech -- 11.7M (C)
• Critical Ther -- 2.1M (C)
• Cytokinetics -- 3.2M (C)
• Dynavax - 3.5M (C)

• Eyetech -- 0M (C) 30.9M (F)
• Idenix -- 0M (C) 33.5M (F)
• Memory -- 0.9M (C)
• Momenta -- 12.8M (C) 3.9M (F)
• Myogen -- 4.5M (C)
• Renovis -- 0M (C) 12.3M (F)
• Theravance -- 12.9M (C)
• Xcyte -- 0M (C) 2.3M (F)

Total 290.7M in Capitalization (166M Current
Faculty) Average 17.1M (Median 5.6M)
Former (F) and Current (C) Academic Faculty
Recombinant Capital www.recap.com
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Academic Equity in Biotech IPOs

• Conclusions
• Academic equity has substantially outperformed
  licensing fees for institutions taking equity and
  having an IPO
• In 2003-04, 94 of academic equity value was
  captured by faculty, rather than by institutions

Recombinant Capital www.recap.com
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Looking Towards the Future
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Developing new medicines is getting more complex
and more costly
Human Clinical Pathopysiology
Disease
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Public and Private Sector Investment in RD 2005
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What does the public think?
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Where Are New Drugs Developed in the U.S?
At what type of institutions or organizations do
you think most drug development takes place in
this country ?
Source National Survey, 2004
Charlton Research Company for
Research!America
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Competition or Cooperation in Medical Research?
Do you think the institutions conducting medical
research in this country, such as government,
universities and the pharmaceutical industry,
work together to develop new treatments and
cures, or do you think they are in competition?
Source National Survey, 2004
Charlton Research Company for
Research!America
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Americans Think Research Institutions Should
Work Together
Do you think the institutions conducting medical
research in this country, such as government,
universities and the pharmaceutical industry,
should work together to develop new treatments
and cures?
Source National Survey, 2004
Charlton Research Company for
Research!America
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Scientists Should Be Allowed to Profit From
Discoveries
Some people say Scientists should be allowed to
benefit financially from their discoveries. Other
people say Scientists should not be allowed to
benefit financially from their discoveries,
because research should not be motivated by
profits.
Which of these statements comes closer to your
view?
Source National Survey, 2004
Charlton Research Company for
Research!America
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We Must Enhance Public Trust in Biomedical
Research Enterprise

• by restoring balance in, but not
  eliminating, industry-academia-government
  relationships

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How do we restore this balance?

• Encourage personal integrity of individual
• investigators (GLPs, GCPs, and codes of
  ethics)
• Educate scientific community, policy makers,
  and
• the public about the complexity of
  development of new
• medicines and critical need of
  public/private sector
• synergy
• Provide appropriate oversight at all levels
• Punish appropriately those who break the
  rules.
• 
  

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National Academy of Sciences Committee

• Norman Augustine (chair)
• Craig Barrett
• Gail Cassell
• Steven Chu
• Robert Gates
• Nancy Grasmick
• Charles Holliday
• Shirley Ann Jackson
• Anita Jones
• Joshua Lederberg

• Richard Levin
• Dan Mote
• Cherry Murray
• Peter ODonnell
• Lee Raymond
• Robert Richardson
• Roy Vagelos
• Charles Vest
• George Whitesides
• Richard Zare

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Charge to the Committee

• Senators Alexander and Bingaman with endorsement
  of House Science committee requested National
  Academies to
• Identify top actions federal policy makers could
  take so US can successfully compete, prosper, and
  be secure in the 21st Century
• Determine an implementation strategy with several
  concrete steps

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Four Recommendations

• Increase Americas talent pool by improving K-12
  science and math education
• Strengthen the long-standing federal investment
  in basic research in the physical sciences
• Develop and retain the best students
• Ensure U.S. premier place for innovation by
  modernizing the patent system and realigning tax
  policies

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White House

• President's State of The Union and FY2007 Budget
• American Competitiveness Initiative
• AP/IB
• Research Funding for NSF, NIST, and DOE Office
  of Science
• RD Tax Credit
• Advanced Energy Initiative
• Research Funding portion of ACI passed House and
  Senate Appropriations
• Some Education Program Funding approved by House
  Appropriations (AP/IB, teacher training)
• Administration actions on Deemed Exports
  International Students

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Beyond Bias and Barriers Fulfilling the
Potential of Women in Academic Science and
Engineering The National Academies September
18, 2006
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Comparative National Innovation Policies Best
Practices for the 21st Century (Ongoing NAS
study)

• Japan
• Taiwan
• India
• Europe
• China

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Boosting S T

• Japan next 5 years 25 trillion yen (30
  world-class research centers to actively attract
  the best from all over the world targeted
  immigration control regulatory and institutional
  reform)
• India/China Joint ST Steering committee (India
  5 bil RD/yr or 0.9 GDP China 85 bil or 1.3
  GDP on RD) (Chinas Trophy Professors)

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Boosting ST

• Germany high-tech initiative 19 bil over 3 years
  (including 6 bil new funding)
• EU 10-Step Innovation Plan
• -establish innovation-friendly education
  sytems (add entrepreneurial skills to scientific
  expertise foster brain circulation speed-up
  integration of graduates into labor market
  attract best talent world-wide
• -Create European Institute of Technology
• -Strengthen research-industry links
• -Enhance IPR and RD tax credits

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What are we training our students for in the 21st
Century?

• Competition in a flat world
• Systems Medicine (3 Ps predictive, preventive,
  personalized) Interdisciplinary and more
  quantitative biology required Do we have the
  best and brightest graduate students and postdocs
  in biomedical researchtoday vs tomorrow?

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Competition in a Flat World

• Improve quality of students going into biomedical
  research via K-12, undergarduate and graduate
  education and increase efficiency and
  accountability
• Enhance postdoctoral training environment and
  speed integration into workforce and independence
  (age factor plus the lost generation)

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Establish Innovative Mechanisms for International
Scientific Collaboration
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Public and Private Sector Investment in
Biomedical RD 2005
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QUESTIONS?