Universities Want Pharma Deals That Offer A Package Of Opportunities

Rather than one-off collaborations, academia wants tie-ups that provide deeper relationships with such things as sponsored research, clinical trials and future deals.

Universities have got something to say to pharma companies looking for academic tie-ups: if you want a deal right now you've got to offer more than a one-off collaboration.

With industry-academia deals increasingly popular, savvy universities with in-demand research are angling for better deal terms, broader relationships and near-term revenue opportunities. At the same time, they are wary of getting inadequate payment for their intellectual property or losing rights to inventions created with federal funding.

Speaking at a conference on life sciences collaborative agreements and acquisitions, James Zanewicz, director of the Office of Technology Transfer at the University of Louisville, said his institution wants to establish an "innovation ecosystem."

"It's value in the package to the university now, it's not dollars for us per se," he said. "Is there sponsored research? Is there a relationship being established so there is going to be not just one deal but 15, 20 down the line? Is there a potential for clinical trials? Will they hire our students? These are things we are looking at."

Zanewicz said that if companies are flexible in negotiations and offer different terms than might normally be highlighted in a license, they can be very effective in helping the university and, in turn, enable the university "to be a little more flexible in what you need to win from a financial perspective on your side."

The meeting, held in New York City Feb. 16 -17, was sponsored by the American Conference Institute. Zanewicz spoke on a panel of academicians who oversee technology transfer.

Companies Also Are Looking For Deeper Ties

While universities are seeking deeper relationships with industry companies too are trying to ramp up academic collaborations. Pfizer Inc. most notably has aligned itself with medical centers based in New York City and San Francisco to discover novel biotherapeutics. Other companies also have formed new partnerships that provide joint decision-making and equitable terms for academia (Also see "Back To School: Big Pharmas Test New Models For Tapping Academia " - In Vivo, 1 Feb, 2011.).

Despite these new arrangements, universities still face situations where companies want to snap up their inventions for relatively little cost. Kathleen Denis, associate VP of technology transfer at The Rockefeller University, said her institution recently was approached by a big pharma company seeking an overarching collaborative agreement. The company "basically said 'we'll take the inventions and we'll develop them and we'll give you a milestone during clinical trials and you'll be happy with that,'" she stated.

In response, she said, Rockefeller's incoming president [Marc Tessier-Lavigne, VP for research and chief scientific officer at Genentech] declared: "What? Are they crazy? They're having margins of x, y, z and we're going to be happy with one six-figure milestone?"

Universities Need Revenue Before Royalties

In determining fees, Ellen Purpus, director of the Office of Technology Transfer at The Children's Hospital of Philadelphia, said universities typically backload deals with the real revenue coming in as royalties. But she said it is important to have cash flow in the interim.

"We say it's not about the income and it's really not, but at the same time we're measured on the income," she stated. So, if companies "can build [cash flow] into your valuations and into your deals that will be very, very helpful to us."

Panelists also mentioned the upcoming Supreme Court case addressing whether a university employee can assign rights to an invention he helped create with federal funds to a third party. The court is to hear oral arguments in the case, Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, on Feb. 28 (Also see "Supreme Court Gets Nudge On Bayh-Dole Case; Denies HRT Petition; Will Review Infringement “State Of Mind”" - Pink Sheet, 18 Oct, 2010.).

Purpus noted that her hospital tries to prevent situations where an employee could assign an invention to someone outside the institution.

"All of our clinical researchers are active researchers in general so they are going to be doing research in whatever field or whatever indication the clinical trial is about," she said. "So we have to make sure that we draw some fences around how far the company can reach through from the clinical trial agreement into that individual's research program."

Denis noted that a couple of times a year Rockefeller is asked to assign its intellectual property. She said most universities cannot do that since most of their inventions are made with federal sponsorship.

"When you sponsor research, you're sponsoring part of the research even though you feel you are sponsoring all the research and you should own it," she said. But "the laboratory is tainted from the floor to the ceiling with federal dollars and you cannot legitimately get ownership to that intellectual property."

- Brenda Sandburg ([email protected])