Tuesday, December 11, 2012

Alliance Deal of the Year Nominee: Novartis/University of Pennsylvania

It's time for the IN VIVO Blog's Fifth Annual Deal of the Year! competition. This year we're once again presenting awards in three categories to highlight the most interesting and creative deal making solutions of the year. The categories are: M&A Deal of the Year, Alliance Deal of the Year, and Exit/Financing Deal of the Year. We'll supply the nominations (a half dozen in each category throughout December) and you, the voting public, will decide the winners (by voting early and often, commencing once we've announced all the nominees). Strap yourselves in, it's The Race for the Roger™.

Novartis’ alliance with the University of Pennsylvania around cancer immunotherapies based on chimeric antigen receptor technologies is a creative relationship that is as state-of-the-art as the technology it embraces. The Big Pharma needs to reinvigorate its oncology franchise as its key drug, Gleevec, matures. And the university, like all universities these days, needs additional sources of funding as its key benefactor, the National Institutes of Health, pulls tighter than ever on its purse strings.

Novartis-Penn might deserve a nomination simply because it’s the year’s flashiest deal in the hot and maturing area of pharma-academic collaboration. But it’s nominated also for the potential importance of the technology, which more typically would find a home in a venture-backed biotech environment.

The five-year alliance, centered around the work of professor Carl June and announced in August, achieves those goals and more. June is director for translational research at the Abramson Family Cancer Research Institute at Penn and an expert in using genetically modified T-cells to treat cancer and infectious diseases. He has recently devoted considerable time to creating T-cells that express the receptor CART 19, a synthetic fusion protein consisting of antibodies that attach to the CD-19 protein, commonly expressed in B-cell mediated leukemias, notably chronic lymphocytic leukemia. Others are working on similar technologies, but June has been able to demonstrate for the first time both the longevity sufficient for clinical benefit and a lack of life-threatening side effects.

In exchange for undisclosed funding, Novartis gets exclusive worldwide rights to all assets developed through the collaboration and to CART 19, which June’s group has already taken through Phase I trials. Novartis is gearing up to start Phase II trials in 2013. Penn’s tech transfer office notes that it has one of the biggest up fronts between pharma and universities for a specific program and based on its size, Penn researchers will be devoting a “significant” amount of their time to it.

As part of the deal, Novartis is committing $20 million to build a Center for Advanced Cellular Therapies on site at the Penn campus in Philadelphia. Novartis executives singled out the technology as having the potential to be “transformative” at an Investor R&D event in November.

The collaboration is noteworthy as far as university-academic alliances go not only for its potential scientific and medical benefits but because it surely is emblematic of what appears to be a new phase in industry-academia relations. Long fraught with mistrust and tension, the groups have struggled to work together, deterred by disappointments and abrupt endings.

In recent years, as they apply serious efforts to find new sources of innovation, pharma companies have taken more of a win-win approach to dealing with academia – sharing intellectual property, returning compounds to academia if the corporate partner loses interest in them, and being more flexible on publication rights – all stipulations that never used to be on the table.

At the same time, the ivory towers, short of cash, are slowly shifting their culture to incorporate corporate support for translational research that could lead to new drugs. The hope is that industry will be able to tap a new source of innovation and ideas, and that academics will find the support they need to do their work and also carve out a route to put their best findings into clinical practice and ultimately help patients.

The Penn arrangement stands out for the extent of commitment both sides are making – bidding for the technology was highly competitive and June likely could have turned to venture capital for support in building his own company, traditionally a key route to fame and fortune for academic superstars. But reportedly he wanted to get the CART 19 compound on the market quickly and Novartis was the best ticket to that goal.

-- Wendy Diller

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