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Bridging the gap

May 21, 2013

Pek-Hooi SohPek-Hooi Soh examines the link between pharmaceutical innovation and commercialization.

By Roberta Staley.

Modern medicine sits on the cusp of a brave new health paradigm, where care is administered to a patient based upon his or her unique genetic makeup. Such models of personalized medicine rest largely upon a revolutionary new way to produce drugs developed through the study of gene-disease associations. This area of scholarship is called genomics, a branch of molecular biology that involves the mapping and analysis of the human body’s estimated 30,000 genes.

About 4,400 therapeutic and pharmaceutical firms around the globe, including 220 in Canada, are involved in such drug development and therapy, says Pek-Hooi Soh, an associate professor in the Beedie School of Business at Simon Fraser University. These biotechnology firms may be staffed by some of the best and brightest, but unfortunately this hasn’t meant a host of new designer drugs in the marketplace, says Soh, co-author of “When birds of a feather don’t flock together: Different scientists and the roles they play in biotech research and development alliances.” The paper, published in Research Policy, was co-authored by Annapoornima Subramanian, National University of Singapore, and Kwanghui Lim, from Melbourne Business School.

One way to improve the slow emergence of new drugs into the marketplace, says Soh, is to enhance the relationship between universities and biotech companies. Universities are hotbeds of technological innovation. However, their role is not commercialization of their discoveries. Commercialization is done best “by entrepreneurs at biotech firms – the bridge between university science and industrial innovation,” says Soh, who studies how scientific discovery leads to drug commercialization.

This doesn’t deny the fact that some university scientists make the leap into entrepreneurship with ease. However, “in late-stage commercialization, the involvement of experienced entrepreneurs is necessary to ensure commercial success.”

The process of getting drug approval from various regulatory bodies can be glacial, and attracting venture capital and government grants is challenging, especially since the 2007 global economic meltdown, says Soh. The majority of global biotech firms have 60 or fewer personnel; about 70 percent of these are scientists.

“It costs a minimum of $20 million for a biotech start-up to complete the research and development of a new drug. And it takes another $500 million to $800 million – and about 15 years – for the drug to be commercialized,” says Soh. “Unless a biotech firm initiates an IPO – and about one percent or less succeed – they remain in private hands, restricted by a lack of research and development money.”

A biotech firm’s small contingent of staff can rarely devote itself to scientific innovation in addition to nurturing partnerships with bigger players such as pharmaceutical firms that can help bring a new therapeutic drug to market. Especially in the latter parts of clinical development, “they have to close down their lab [and] focus all their energies in seeking out downstream partners who are willing to bring their drug to the next step,” says Soh, who has a PhD in management of technology from MIT and a master’s of science in the management of information systems from the London School of Economics.

Soh points to Vancouver-based biotech QuadraLogic Technologies (QLT) as an example of bottlenecked innovation. QLT famously developed Visudyne to treat an age-related blindness called macular degeneration. Although Visudyne was successful, QLT didn’t continue to innovate to bring new products into the marketplace, Soh says. In order to stay afloat, QLT sold off its flagship product Visudyne to Valeant Pharmaceuticals International, and restructured and laid off more than half its staff. It is now conducting research into a synthetic retinoid product to treat an inherited progressive retinal degenerative disease.

A successful biotech firm today must nurture and maintain strong collaborations with university researchers. But they must recruit the right type of scientist, says Soh – a key point addressed in the Research Policy article. In the halcyon days of the 1980s, when biotech was taking off, start-ups were engaging “star scientists” who published prolifically. Their research influenced the direction of scientific development, making this an individual to either have on staff or collaborate with, Soh says.

Her research also shows that patent-oriented scientists are more “apt at creating technologies and scientific invention,” and better at taking university-created invention and turning that into technologies for use in the real world. “Patenting and publishing are notably distinct, both in terms of effort and the skills required,” she says.

The patent scientist’s discoveries generate real economic value, Soh adds. This attracts greater interest from venture capitalists, big pharmaceutical companies or entrepreneurs. Thus, patents are key to transferring knowledge from universities to industry. Importantly, patents also help generate revenue for the university, she says.

Universities in turn must encourage their researchers to patent “so that these technologies can be licensed out to firms that have the complementary skills of commercializing the scientific knowledge.”

Enhanced collaboration and bridges between biotech firms and universities will benefit not only institutes of higher learning and the entrepreneurs but the public – the ultimate benefactor of this brave new world of designer drugs hanging tantalizingly just over the horizon.