Model or Muddle?

When I read last week that Emory University was putting part of its royalty income into a new company to accelerate the development of drugs for global diseases, I was hopeful that it had launched a new model for university technology transfer (FierceBiotech article).  The new LLC (limited liability corporation), called Drug Innovation Ventures at Emory (DRIVE), is “expected to provide global solutions to address worldwide drug development and commercialization needs,” according the University press release (Emory PR).  DRIVE “will provide the financial, business, project management and regulatory expertise to effectively move drugs through lead optimization and pre-clinical testing — a stage of drug development often termed the “Valley of Death” — and into proof-of-concept clinical trials,” and it will be the “industrial partner” for the University’s in-house Institute for Drug Development (EIDD), headed by one of the better-known academic drug discovers, Dennis Liotta.  Among other activities, EIDD is also the custodian of the Global Health Primer, a catalog of drugs in development for global diseases (GHP) which was transferred last spring from the late advocacy group, BIOVentures for Global Health (see my post, “Downsize or Downhill?”).

 

I looked for more information on DRIVE and its plans, but what I found was not encouraging.  DRIVE has a website (DRIVE), but it is sparse.  I found a presentation Dr. Liotta gave at the Atlanta Clinical and Translational Science Institute in February 2013 (Liotta presentation) which provided some details but raised questions, too.  First, DRIVE’s will work only on antiviral drugs for diseases which are caused by RNA viruses, many of which are of global concern like measles, influenza, Chikungunya, hepatitis C, dengue, and yellow fever.  Second, it appears DRIVE will be operating as a virtual company working primary through contracts and those contracts appear to be primarily at EIDD.   Also it is noted on slide 5 that DRIVE will use Emory’s administrative system for HR, finance, and grants/contracts, although I’m not sure how Emory can negotiate a contract with itself.  Third, DRIVE will depend heavily on three principals; the organization chart on slide 6 lists four employees (and one to be hired) and the rest to be contractors.  Two of the principals have substantial biotech/pharma drug development experience- George Painter, CEO, and Abel de la Rosa, CSO (although his experience is more in business and not science)- and the third- David Perryman, COO- is an attorney with negotiation but not operational experience (slides 7-10).  Fourth, it is not clear where DRIVE will get its “therapeutic opportunities” (slide 13).   The Emory press release stated that DRIVE will be the “industrial partner” for EIDD, but although the EIDD has a list of eight project areas, but none seemed to be ready to move into the preclinical, let alone clinical, studies needed to generate sufficient data to attract licensees, either established companies or venture-backed start-ups (and none of the projects list current [later than 2010] publications) (EIDD Projects).  Planning and conducting clinical trials is challenging, and from the presentation it looked like DRIVE will be using the Emory’s Winship Phase I Clinical Unit, which was started in 2009 to conduct cancer trials.

 

Not clear at all was the funding of DRIVE. The press release stated the initial funding will be $10 million from the royalties received through Emory’s license for the HIV drug, emtricitabine.  Emtricitabine was discovered by Drs. Liotta, Schanazi, and Choi at Emory (although the discovery was disputed, see IP Advocate Case Study) and licensed to Triangle Pharmaceuticals in 1996.  Triangle Pharmaceuticals was acquired by Gilead Sciences in 2003.  Gilead completed its development and sells the drug as Emtriva (Wikipedia article), and it is included in Gilead’s combo HIV drug, Truvada (approved in 2004), and Bristol-Meyers Squibb’s drug, Atripla (2006).  Will the $10 million be upfront funding or over time?  Did Emory purchase equity or give it as a grant?  Ten million dollars is a good start but few drug development companies, even virtual ones, can make progress on multiple products for that amount.

 

Also not clear is who is in charge (and liable).  The press release said DRIVE will be wholly-owned by, but separate from, Emory; the presentation (slide 4) stated DRIVE’s agreement with Emory allows it “independence to run like a biotechnology business.”  I don’t know enough about LLCs to say if Emory is liable for injury that may occur during trials.  And the University and the principals may not have the same motivation for forming DRIVE.  In the release, the Emory president stated, “This financially self-sustaining public-private enterprise fits within Emory’s vision of working collaboratively for positive transformation in the world through discoveries that are of global benefit.”  One of the principals, David Perryman, may have a different view.  To quote a Medcity news article (Medcity article):

 

In an interview with David Perryman, one of the leaders of DRIVE, he said the reason for the company is to create a way to steer clear of the entangled bureaucracy that can threaten the advancement of technology at any university.  It’s also to ensure that leadership can tap their own real world experience to ensure the technology gets to the appropriate group to commercialize it.  “A lot of universities are getting into technology transfer and by and large, they don’t know how to do it,” Perryman told MedCity News in a phone interview.

 

In my experience, new ventures succeed when they have a well-thought out plan that is executed well by managers with the right skills and experience and are backed by patient investors with aligned interests.  I am not sure about DRIVE.

 

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