"The traditional model of drug development is no longer sustainable."
When Dennis Liotta makes such a proclamation, it carries weight. Together with his Emory University colleague, Raymond Schinazi, Liotta discovered some of the most successful anti-HIV drugs as well as founded and advised an array of biotechnology companies.
Along with other experts on drug discovery, Liotta is concerned about a growing gap between academic and clinical research. In fact, the transition from laboratory success to human clinical trials has become so difficult that former NIH Director Elias Zerhouni has dubbed it the "valley of death."
University labs excel in discoveries about basic chemistry and biology: studying cells and enzymes and examining models of human diseases in animals. Conventionally, after these discoveries are made, the task of testing the potential drug in humans falls to industry.
But in the past few years, pharmaceutical firms have begun to shy away from sponsorship of early clinical research. Citing increasing risks and costs—the expiration of patents, cost pressures from health care reform, regulatory stringency, and rising costs of clinical trials—pharma leaders are instead focusing on drug candidates that already have made it past some of the early regulatory hurdles.
Small start-up companies are supposed to fill the void. One such company, Pharmasset, was founded in 1998 by, among others, Schinazi and Liotta to discover and develop antiviral drugs. In 2012, Gilead (Nasdaq: GILD) acquired Pharmasset for $11 billion. However, for every successful start-up, there are a dozen or more failures. Companies founded on brilliant ideas may still have difficulty finding funding, may run out of money after encountering regulatory snags, or fail due to lack of an experienced management team to create value and navigate the abyss between funding and product development.
One result of these barriers is fewer clinical trials. According to the clinical trial industry association CenterWatch, the number of clinical trials listed on clinicaltrials.gov, including U.S. and international studies, declined in 2012 to a four-year low.
These developments frustrate researchers like Liotta and his colleagues, who have recently identified compounds in the laboratory that they think could be effective in fighting viruses such as dengue, West Nile, respiratory syncytial virus, and hepatitis C.
To bring these compounds closer to becoming drugs, he and Emory leaders are exploring a different approach. By combining academic, business, and operational capabilities, Drug Innovation Ventures at Emory, or DRIVE, may be able to withstand the harsh financial climate while following the most successfully traveled route across the valley of death.
An alternative route
Universities across the country have established centers for drug discovery, most of which focus on sorting through vast collections of potential drugs to find a handful that show promising results—or "hits"—in laboratory tests.
DRIVE is different. It will take on a task that academic laboratories have generally been unable to do.
The risky and expensive part of drug development is not in finding the hits but rather in seeing whether the potential drug will have the desired effects in humans. Does the drug stay in the body long enough to do good? Does it get to the right organ? Does it damage the liver or kidneys? What is the maximum tolerated dose? Can it be manufactured on a large scale and cost-effectively?
This part of the process is expensive partly because the FDA requires a cache of safety data before allowing a new drug to be tested in humans. Grants from the NIH, which make up the bulk of university research funding, do not cover costs for these studies.
In the past, Emory—like other academic research institutions—has licensed promising research to start-up companies through its Office of Technology Transfer and hoped for the best. DRIVE will allow Emory to manage the process longer and possibly reap a greater return on investment.
For example, DRIVE will have the independence to do some things that traditional university entities can't, such as license technology from other universities and combine it with technology from Emory, says CEO George Painter. At the same time, DRIVE will have capabilities that standard commercial firms lack, such as access to Emory's research infrastructure, which includes the Emory Institute for Drug Development (EIDD). Although the organization will be capable of forming for-profit spin-offs, it is set up as a nonprofit to allow funding access from philanthropic foundations.
"We're not trying to become a pharmaceutical company," Liotta says. "We want to do this in a way that is compatible with the mission of the university."