I posted at 4:25 but the system says 5:25 - did you forget something?

This trend is also seen in the way in which tech transfer offices have changed in recent years. There are now universities where the development of IP has as much influence over things like tenure decisions as do publications. When a university like Emory can garner over $600 million in royalty income from developments that lead to marketed drugs it tends to focus the attention of everyone involved (especially as the inventors get a pretty good share of that income).

I am not suggesting that this is currently a major factor in drug development - it is still a tiny fraction of a percentage of all R&D spending - but I am sure that this trend will increase in the near term and it will create a shift in the direction of some research as well as creating new opportunities for different business models.

Lilly has a TB initiative that splits ownership with companies that provide compounds. The Microbial Chemistry Research Foundation, a non-profit group, recently donated a compound to the initiative which is set up to be non-profit. Lilly funds the development but doesn’t receive any income from its investment. So it’s a hybrid of what Nathan touches on.

I wasn’t sure if Outside the box intended to imply that non-profits are directly funding drug development rather than maintaining ownership through patents and other IP but with ‘commercial’ funding coming from elsewhere.

Can you elaborate on this? My understanding is that nonprofits generally fund very early stage (academic-like) research — but do not really pump money into real drug development. If you disagree, can you provide me with a few examples?

It seems to me that non-profit funded drug discovery is a great way to deal with 3rd world diseases and orphan diseases. However, I haven’t been able to find any examples where this has actually worked.

VC have not really been “venture” based for a few years now. Their preference for progressively less risky deals has led them away from their old model of early funding for biotech into an approach that only allows them to look at later stage deals. The entire structure of this financing model has changed and will continue to change as the industry moves closer and closer to the Hollywood model where much more of the early stage funding comes from sources outside the “established” VC and investment bank institutions. For example, examine the way that disease based non-profits are taking an increasingly prominent ownership-based role in drug development.

VC firms are becoming very conservative in the investment decisions. They are looking for less risky later stage investments and even then are scrutinising candidates more closely than ever.

The current economic climate is making investments in their existing portfolio companies look sick so new companies looking for money are facing very difficult times. As a result, unable to raise money now, some biotechs are selling future royalties for money now.

Good point. I’ll try to remember to do mention headquarters. I generally don’t bother for the biggest companies, but should include the info for those smaller outfits.

So to answer your question, CyDex is in Lenexa, Kansas; Xanodyne is in Lexington, Kentucky; Phenomix is in San Diego, and Nanosphere is in Northbrook, Illinois.

And thanks for the recommendation and kind words. That was very nice of you. I’m trying. It’s a lot of work, but also a lot of fun.

Cheers
ed

Hey Ed: it would help when you write about biotech companies if you told us where they are headquartered. You mentioned a couple in your latest post, but did not include their HQ location. Are they in the Philadelphia area?

By the way, I recommended your blog to everyone who attended my two roundtables on blogging during the 68th annual conference of the American Medical Writers Association in Louisville, Kentucky last month. Your blog is awesome, mostly due to the frequency of posts. Keep up the good work!