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Janssen-Vanderbilt; Baxter-Northwestern R&D Pacts Support Idea of Academic Labs as CROs

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A pair of prominent US universities last week inked broad, multi-year and multi-million-dollar research and development pacts with large healthcare companies, adding heft to a recent trend of such firms viewing academic institutions as cheaper and more innovative alternatives to contract research organizations.

In one deal, Janssen Pharmaceutica, a Johnson & Johnson company that focuses exclusively on mental health, signed a three-year, $10 million licensing and sponsored-research agreement with Vanderbilt University to develop new treatments for schizophrenia.

In the second agreement, Baxter Healthcare has forged a three-year research partnership with Northwestern University in a variety of biomedical areas of interest to the company. That deal could be worth as much as $3 million to the university.

Under the terms of the Vanderbilt agreement, the school has given Janssen a worldwide exclusive license to existing compounds acting on specific neurotransmitter receptor targets. Meantime, Janssen will fund research on and have the option to license additional novel compounds over the next three years.

The agreement provides a total of $10 million in upfront payments and committed research funding to the laboratory of Jeffrey Conn, professor of pharmacology at Vanderbilt and director of the school's program in drug discovery.

Janssen declined to disclose what percentage of the $10 million went toward an up-front payment and what percentage would be earmarked for sponsored research. However, it said that additional payments could be made in the future based on certain research milestones and through royalties on potential products.

Stef Heylen, Janssen's chief medical officer for CNS research and early development, told BTW this week that the research partnership will focus on targets within the glutamate pathway of the central nervous system as an alternative for schizophrenia drug development.

Most currently available anti-psychotics focus on the dopamine pathway, he said, and may not treat certain residual symptoms – often referred to as negative symptoms – of the disorder.

"The targets we're going after [also] have the potential to treat the positive symptoms of schizophrenia, which are somewhat effectively treated by current medicine," Vanderbilt's Conn explained. "But so-called negative symptoms — the inability to experience pleasure, social withdrawal, a blunted emotional response, and certain cognitive disturbances — are probably more important toward determining the success of treatment."

Meanwhile, under the terms of its agreement with Northwestern, Baxter Healthcare will fund collaborative research projects on a case-by-case basis in the areas of drug discovery, medical devices, biomaterials, and drug delivery.

Over the course of the three-year renewable agreement, a steering committee comprising senior R&D leaders from Northwestern and Baxter will identify potential projects. Baxter will provide different funding amounts based on the nature of each project, with total funding reaching as much as approximately $1 million a year.

"This is not like in the past where a company might give a large amount of money to a university with the hope that, in one way or another, the company would benefit," Norbert Riedel, Baxter's corporate vice president and chief scientific officer, told BTW this week.

"In our case we have a very active steering committee that reviews areas of interest, and on a case-by-case basis we fund a program with a clearly defined research plan and goal," Riedel added. "This is a much more engaging relationship than in a traditional model."

On Northwestern's end, the alliance will be managed through the university's McCormick School of Engineering and Applied Sciences' Office of Corporate Relations. Northwestern has forged similar broad-based research partnerships in the past with companies such as Honeywell, Ford Motor Company, and Boeing, but its alliance with Baxter is the school's first broad-based biomedical-related R&D pact.

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Julio Ottino, dean of the McCormick school, told BTW that the university has a very good idea of the specific researchers and research areas that Baxter will be interested in at the onset of the partnership. He declined to elaborate, citing a confidentiality agreement with the company.

"The idea is that they will work concurrently with these people, not just give them money and walk away," Ottino said. "These are the people they want to start with … but there is a very good sense that there are more projects behind this initial group, which may require additional funding."

Universities as CROs

Executives from both companies cited specific research capabilities at the partnering universities as a major reason for pursuing the partnerships. In Vanderbilt's case, the presence of a drug-discovery program rivaling that of many CROs and pharmaceutical companies attracted Janssen, Heylen said.

"In the current environment, it is impossible to stay on top of all innovation of all new targets, and there is a trend to look outside more," Heylen said. "What is unique about this is that Vanderbilt has a drug-discovery center that goes beyond the classical target identification and target validation stages. It actually takes the next step of making sure that potential compounds are really ready to become clinical candidates."

Part of the reason for this capability is that Vanderbilt has tried over the past few years to build a drug-discovery program modeled after the drug-discovery capabilities of a typical pharmaceutical company. This includes establishing laboratories with high-end capabilities in areas such as proteomics, informatics, high-throughput screening, medicinal chemistry, pharmacology testing, and informatics; and hiring faculty members with pharmaceutical industry experience.

Vanderbilt's Conn, who will lead the research collaboration, previously served as senior director and head of the department of neuroscience at Merck.

"It's clear that Jeffrey Conn, coming from Merck and having worked in the pharmaceutical industry, knows what an optimal clinical drug candidate should look like," Heylen said. "He also has working with him a number of people with pharmaceutical experience. That's actually a little bit new."

Heylen added that most academic institutions are capable only of moving a therapeutic candidate to the target identification or target validation stages, but Vanderbilt's drug-discovery capabilities allow it to take "the next step of making sure that potential compounds are really ready to become a clinical candidate."

This in turn makes a candidate compound or family of compounds much more attractive targets for pharmaceutical companies to license and develop. "We consider this partnership to be in the lead-optimization phase," Heylen added.

Conn said that the infrastructure at Vanderbilt is very similar to a large pharma on the drug discovery side, although not quite as extensive.

"On the surface, this is something that could be done at J&J – they certainly have the infrastructure – but I think as the pharma industry deals with fiscal issues, all of the growth has been internal, hiring new people," Conn said. "When there is a need to retract, it is much more difficult to do that."

As a result, he said, the entire industry has begun working more with CROs and outsourcing R&D. "This is not exactly a CRO model, but it is a way to manage growth, and have that growth be external," Conn said. "We function in many ways like an intact discovery team would in a pharma company, with an intense team-like effort."

Meantime, Baxter's Riedel cited Northwestern's highly cross-disciplinary research capabilities as a major driver of its research partnership with the university.

Although the McCormick School of Engineering and Applied Science will spearhead the partnership, researchers from Northwestern's Feinberg School of Medicine will also participate in research projects. In fact, many faculty members at Northwestern have appointments at both schools, or in other departments such as chemistry or biochemistry.

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"Baxter is a highly diversified healthcare company with products and technologies ranging from medical devices to really hardcore molecular biology derived therapeutics," Riedel said.

"The partnership with Northwestern is anchored in the school of engineering, but it reaches into the medical school, into the departments of biology and chemistry," he added. "The very reason I wanted this partnership is that there is such a close collaboration between the departments at the university."

Baxter also cited Northwestern's Chicago locale as a plus, as the company has manufacturing and R&D facilities in Round Lake, Ill., about a 40-minute drive from Chicago.

Both universities also said that their deals had mechanisms in place to support and protect the core university mission of conducting basic research.

Some of the major sticking points in this area are the influence that a company might wield in determining the course of research and the possibility that a sponsor might delay or forbid scientific publication.

"Typically [for] publication, we ask the university to have time to review the manuscript and decide whether or not we need to file a patent application," Riedel said. "Typically, Baxter has preferred rights to procure and license the technology without in any way misaligning our goals with the university's obligation and mission to conduct independent research."

Likewise, Janssen's Heylen said that Vanderbilt will retain the full right to publish any scientific discoveries, although the company has the right to review innovations before publication to decide if they are worth patenting or licensing.

"All of this went before a conflict-of-interest committee at the university, and there are very strict guidelines in place that we adhere to," Vanderbilt's Conn said. "We are intent on insisting on the ability to publish, which is critical for the university. At our core, we do have a slightly different mission, which is that we want to drive research, but we feel it's critical as a [National Institutes of Health]-sponsored institution to take that basic research and translate it into therapeutics."