Pharmaceutical giant Bristol-Myers Squibb will become a limited partner in BioMotiv, a Cleveland-based biotech accelerator, to jointly fund new research into therapies in disease areas with unmet medical needs.
“Partnering with an innovative accelerator like BioMotiv strengthens our ability to translate cutting edge, early-stage academic discoveries into new therapies for patients with serious diseases,” Bruce Car, interim head of discovery research at Bristol-Myers, said in the statement announcing the partnership. They will form new companies to investigate novel therapeutics, and Bristol-Myers has the option to acquire them if the research is successful.
Satish Jindal, managing director at BioMotiv, told Karma that his company is unusual in that it pairs a for-profit accelerator with a non-profit, the Harrington Project for Discovery & Development, and its $380 million fund.
“It’s a very unique blend that is brought together to maximize the chances of taking an academic project and bringing it directly to patients,” said Jindal, who is also a former vice president at Bristol-Myers.
The Harrington Project, which operates out of the University Hospitals of Cleveland, identifies promising research from physician-scientists and offers mentorship and networking. “We can step in once we find a great project, and we can start working on the project literally the next day,” Jindal said.
The deal with BioMotiv is Bristol-Myers’s latest effort to work directly with early-stage biotech firms. In 2016, it partnered with Dual Therapeutics, a BioMotiv portfolio company in the oncology space. And in 2017, the drugmaker became a sponsor of BioLabs, a network of co-working facilities for startups.
Rise of CROs
Drug research is expensive, time-consuming, and often does not end with a working product. Like its peers, New York-based Bristol-Myers has increasingly outsourced that work to contract research organizations, or CROs, and other affiliates. Drug sponsors spent about $86 billion on contracted research and development last year — over $20 billion more than what they spent on internal staff and infrastructure, according to a study from the Center for the Study of Drug Development at Tufts University.
Jindal says that trend will likely continue. “Companies are increasingly going to become virtual or semi-virtual and rely more on CROs, rather than building in-house infrastructure and labs, and finding teams of people,” he says.
Big pharma sales from biotech products have nearly doubled over the last decade, according to the Tufts center. By 2017, they accounted for more than two-fifths of annual revenue for the top 20 companies.
“A lot of innovation comes through academia, but traditionally, the pharma-academic relationship has been one of sponsored research or very early-stage licensing of technologies,” says Jonathan Gertler, managing partner and CEO of Back Bay Life Science Advisors, a consulting and investment banking group.
As universities and pharmaceutical companies figure out better ways of working together, accelerator models like BioMotiv help bring the most promising ideas to market.
“You start to get a fusion of academic technology and excellence with development and commercialization expertise,” said Gertler. “It’s a very good way for a larger company to lend its expertise and perspective, without necessarily investing an enormous amount into the bricks and mortar of R&D within their own four walls.”
Troubles With a Trial
Lately, in-house development has been a struggle for Bristol-Myers. One of its key products, the cancer drug Opdivo, failed to show results in a brain cancer trial. It has failed two other tests this year, as the company tries to expand its use cases. Opdivo also faces competition from a Merck alternative.
The drug has been a big seller for Bristol-Myers, treating several forms of cancer and bringing in over $1.8 billion in revenue during the second quarter of 2019.
Initiatives like the deal with BioMotiv can help sow the seeds for the company’s next blockbuster, said Gertler. “It may not come to fruition in two years, but it may certainly come to fruition in five to eight years.”