One often hears the phrase “it takes a village.” Although often used in the context of rearing children, it is equally applicable to the development of a life sciences company. In an industry where one out of 10,000 drugs makes it to market, and where many drugs fail after millions of dollars of investment, one of the challenges is to create an environment that enhances the chance of success and mitigates the high cost of failures.

Research and development companies in the life sciences sector face a number of challenges, including limited access to capital, complementary intellectual property rights and lengthy government approval processes. Pharma companies also face a number of challenges: the well-documented patent cliff, reduced R&D budget, and generic competition are but a few.

In light of these challenges, the life sciences industry as a whole is finding creative ways to address these issues, and this article highlights some of the novel collaborations we have recently seen.

Funding Collaboration

Recognizing the need to fill the development gap, many of the major pharmaceutical companies have either partnered with experienced life sciences venture capitalists or developed their own funds both as a way of accessing new technology and investing in the next generation of life sciences innovation.

Recently, GlaxoSmithKline announced the creation of its $50 million Canada Life Sciences Innovation Fund. The Fund is intended to identify early pre-clinical research that can “quickly identify the most promising candidates and rapidly progress these.”

In early 2012, Eli Lilly announced an investment in TVM Life Science Ventures VII. While TVM VII appears to be a typical venture capital fund, it’s a venture capital fund with a twist: it creates single therapeutic asset companies. In connection with the its investment in TVM VII, Eli Lilly also established an autonomous unit in Quebec (Chorus), a global drug development “network” that aims to help early-stage companies develop plans that will help them move product candidates from lab to proof-of-concept.

Similarly, in early 2012, Merck announced its $35-million investment in, and the launch of, the Merck Lumira Biosciences Fund. The Fund was established by Merck in collaboration with Lumira Capital, Teralys Capital and other partners to provide investment capital to support early stage life science innovation in Québec.

Research Collaboration

As many of the current drugs that were the lifeline of global pharmaceutical companies are coming off patent, companies are looking for new drugs to fill their pipeline and have recognized that collaboration will be one of the keys to their success. In 2012, Nature reported AstraZeneca formed a Science and Technology Integration office to coordinate precompetitive collaborations and public-private partnerships.

Regulatory Collaboration

On the regulatory front, in September 2012, 10 pharmaceutical companies announced the formation of a new non-profit company, TransCelerate BioPharma, which is intended to identify and capture efficiencies in the clinical trial process.

Corporate Collaboration

Corporate collaborations are not new, but in light of the challenges the life sciences industry has faced in recent years, there are some novel partnerships emerging.

An example is a partnership between MaRS Innovation and Baxter International Inc. whereby Baxter agreed to provide up to US$1 million in funding over a three-year period to support life sciences projects. The Baxter funding is supplemented by financial support from MaRS Innovation. Baxter and MaRS Innovation identify investment opportunities from MaRS Innovation’s 16 member institutions to support promising projects.

Government Collaboration

Also in 2012, the federal government announced its Venture Capital Action Plan. The goal of the plan is to encourage the creation of large venture capital funds that specialize in investing in early-stage, high-growth start-up companies in Canada. Investments by these funds will include investments in companies in the life sciences sector and $250 million of the $400 million of federal funding will be used to create a “fund of funds” for Canada’s venture capital industry, which will invest in Canada-focused venture capital funds.

In this new age of collaboration, flexibility and adaptability is important, both with regard to internal structures and external relationships. It’s great to see industry collaborating for success....it takes a village.

Related Links

GSK Innovation Fund: http://www.gsk.ca/english/docs-pdf/innovation/GSK_Canada_Life_Sciences_Innovation_Fund_Executive_Summary_FINAL.pdf

Merck Lumira Biosciences Fund: http://www.merck.ca/newsroom/ca_en/corporate-news/Merck_Release_Research_Investment_%20Nov_23_2012_FINAL_EN.pdf

TransCelerate BioPharma: http://transceleratebiopharmainc.com/