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Derek Lowe The 2002 Model

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Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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October 6, 2005

The Great Divide

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Posted by Derek

A reader at a large research university sends this along for comment:

"My advisor is a staunch skeptic of the value of "big pharma". He recently made a comment in a group meeting that "Merck has not discovered anything in 25 years. They don't do research, they acquire it. In fact, I don't know why they even have chemists and biologists, maybe they feel they have to..."

Well. I realize that there's a lot of good-natured sniping between industry and academia, but that kind of crosses the line, doesn't it? The first thing that I feel like saying to this professor is that Merck, which is indeed one of those Big Companies That Makes Money, presumably doesn't employ an army of expensive chemists and biologists for cosmetic reasons. So if you can't figure out why they've kept such people around for decades, perhaps there could be valid reasons that you haven't fully appreciated. It's a hypothesis worth considering, and that would be a higher-percentage move than assuming that the company must be so thickheaded that it hasn't yet figured out that it could fire everyone. That's an interesting approach to the data, sort of like trash-canning any experiment that didn't fit your original assumptions. You don't do that, though, right?

This is an especially rich comment when applied to Merck, which does as much (or more) fundamental research as anyone in the industry. If you want to talk about just going out and buying your stuff, snipe at Pfizer. But Merck is famous for digging into its own projects for years and years until they get them to work. Perhaps a look at a search for "Merck" in PubMed would illustrate the point?

Maybe the problem is that phrase "discovered anything." I've found that some university-based scientists actually take that to mean "discovered anything that would make a neat article in Cell". In the drug industry, our definition is more like "discovered something useful that no one else has done before". And "something useful" means "something that improves a person's health enough that they're willing to pay us money for it". I realize that I've introduced the monetary snake into the Garden of Pure Research, but ah, what choice do we have? They don't give out grants big enough to pay for what we do.

I'm willing to bet that you're thinking about the case of the COX-2 inhibitors. As many people have heard, Merck made quite a bit of money until recently selling one of those. The University of Rochester had a patent on the enzyme and its use as a screening tool, and sued Searle (now Pfizer). But they were trying to reach through and claim a share of the profits for the drugs found through this method (while not, last I heard, offering to soak up any of the recent losses). This suit failed, and it's worth remembering why:

As one of my readers put it, Rochester discovered a new shovel, and laid claim to any gold that might be dug up with it. That's an excellent metaphor, and I'd extend it to say that they were laying claim not just to the raw gold, but to the finished jewelry. The gap between a basic discovery and a drug is much, much wider than even well-educated people seem to realize.

I could go on, and have. But I think I'll close with an item from this morning's news wires. Merck has announced that they have successfully tested a vaccine that will likely prevent the vast majority of cervical cancers. That must have been accomplished by their idle scientists in those brief intervals between cackling with glee while they threw stacks of hundred dollar bills into the air, but I'm glad they took the time to do it. Does this, I'd very much like to know, count as a discovery? After all, vaccines have been known for a long time. Heck, cervical cancer isn't a new disease either, nor is its association with the HPV viruses. I'll bet Merck couldn't get this study published in Cell, or even PNAS. They'll have to settle for the front pages of virtually every newspaper in the world. Time to kick back for another twenty-five years!

Comments (18) + TrackBacks (3) | Category: Academia (vs. Industry)


1. LNT on October 7, 2005 9:05 AM writes...

I recently moved from a biotech company to the "big pharma" world. Interestingly, the attitude of most executives at the biotech company was similar to this professor you quote. Generally, most "bigwigs" at the biotech company thought that big pharma filled thier pipeline largely though aquisition, rather than through original research. Do you have any numbers to back up how much of big-pharma's pipeline came from within big pharma and how much was in-licenced from "small-pharma" and biotech?

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2. Derek Lowe on October 7, 2005 9:27 AM writes...

At large companies, almost all the pre-clinical work is on in-house stuff. The per cent of inlicensed projects goes up when you look at the things in clinical trials, because that's when the smaller companies turn to us for money and expertise.

This report from 2004 on oncology pipelines, for example, says:

"In-house development dominates the pre-clinical stage, accounting for 91% of projects. The percentage of in-house sourced drugs falls to 68.5% in Phase I, 63.6% in Phase II and 57.4% in Phase III. Conversely, the proportion of in-licensed drugs increases as development progresses...”

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3. qetzal on October 7, 2005 9:36 AM writes...

"My advisor is a staunch skeptic of the value of "big pharma". He recently made a comment in a group meeting that 'Merck has not discovered anything in 25 years.'"

One wonders about this professor's reasoning skills. Suppose he were right that big pharma acquires everything and discovers nothing. (That's wrong of course, as Derek clearly shows, but just suppose.) That still wouldn't support his skepticism of the value of big pharma. If he can't see this, I'd just him to tell me this:

"How many new drugs have academia or government brought to market in the last 25 years?"

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4. Derek Lowe on October 7, 2005 10:03 AM writes...

Not a completely fair comparison, Qetzal, but it's one that I've been tempted to make, too. Academia definitely does more basic research than we do in the industry, and we definitely reduce more of it to practice. But both of those are research, and both involve discovering things, which is why this advisor's comment really gets to me. . .

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5. Emma Jean on October 7, 2005 10:56 AM writes...

I've read pieces that suggest that roughly 30% of pharma revenue is generated from technologies in-licensed from biotech. That, of course, does not reflect the pipeline contribution, as you know. Plus, it's not really a valid data point. A good deal of biotech development is financed by pharma, as the alliances pages at rDNA will tell you. And the bottom line is that biotech and pharma need each other. Many biotechs can't afford late stage clinical trials, nor do they desire to develop internal sales staffs and marketing expertise. The percentage of biotechs with this capacity is very small. And when drugs are in-licensed by big pharma, no matter the stage, there is still an enormous body of work to be done. I don't think that the chemists and biologists and immunologists just sit back and watch clinical process unfold - just like the chemists and biologists and immunologists at biotechs that pick up academic research. In short, Merck wouldn't be acting very responsibly if they turned their back on the in-licensing game. I once had a prof just like that. He would denounce industry at every opportunity, and finally, one day someone asked him about his industrial experience. He responded by saying that he had done a six month sabatical "about five or six years ago."

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6. biohombre on October 7, 2005 11:29 AM writes...

As Derek illustrated on his piece on Human Genome Sciences discovery does not produce a medicine. BUT DISCOVERY + DEVELOPMENT are fundamental to new drugs/therapeutics. As has been mentioned in these pages, development is a very large part of the effort in producing a drug. Universities largely do research, with little understanding (overall) of development. Pharma, and biotech do research AND development. Even if the "professor" cited has any validity in his statement about discovery, discovery does not make anything a drug or therapeutic. Discoveries may be made with some alacrity using fruit flies & C. elegans, what has been taken through development with such poor models of human physiology?

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7. milo on October 7, 2005 12:04 PM writes...

I think that a lot of academics (who slam pharma) for get that without the pharmaceutical industry, a lot of people would die, everyday. Period.

I dare say that with out the pharma machine, we would be chewing on willow bark for headaches.

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8. Sebastian Holsclaw on October 7, 2005 1:11 PM writes...

Even if it were true that all they did was pay off small companies--they provide the incentive for the small companies to do the research that they do. Dozens of small pharmaceutical research firms fail in San Diego every year. That is hundreds of millions of dollars that is just gone. The reason investors keep investing in them is the hope of a really big payoff if something useful comes out of the research. That payoff often comes in the form of a Merck or Pfizer buyout. The fact that there are strong enough incentives to do lots of research despite the low chance of a useful outcome on any given project is a really good thing. Even if all they did was provide that incentive (which is of course not all they do), it would be a good thing.

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9. Mark Coburn on October 7, 2005 3:29 PM writes...

Hold on to that close. Universities and comnpanies can work together. In a twist of irony Rochester has licensed rights to a HPV patent behind the vaccine to Merck and GSK. See the story here:

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10. Peter Pitts on October 7, 2005 3:42 PM writes...

Oh to be able to reside in an ivory tower! Oh what a shame that such people are in positions to influence the next generation of thought leaders.

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11. Greg Hlatky on October 7, 2005 8:36 PM writes...

At least in my industry, a company's fundamental research appears not in publications but in published patent applications. Most academics inexcusably ignore the patent literature: some two-thirds of all references in my field are patent documents but few are cited in journal articles. I suspect said professor's statement is the perfect alloy of ignorance, arrogance and snobbery.

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12. biff on October 7, 2005 11:55 PM writes...

The prof's perspective reminds me of the divide within academia between "theoretical" physicists and "applied" physicists. The theoreticians often believe that they are the ones doing "real" science and that the applied folks are "mere engineers" (an actual quote from an old prof I had). It's also very much the same kind of conceit found in biotech regarding pharma.

An anecdote: Not too long ago I was part of a joint project between my company (a big pharma) and a well-known biotech company. I had the displeasure of sitting in the audience at a conference as a director from the biotech described pharmas as "dinosaurs" and biotechs as the "true source of innovation and invention." Unfortunately, to illustrate his point about biotech innovation, he described an experimental approach which was transferred from my company to his company! Needless to say, the subsequent Q&A session was very entertaining...

Despite having heard speakers from biotechs make similar claims for years, I continue to be stunned at the hubris which leads them to make such comments in front of their pharma collaborators, and I continue to be surprised at the meekness (or is it politeness?) of their pharma colleagues, who don't seem to challenge such hype, at least in public. Ironically, time has not smiled on my former biotech collaborator's pipeline, and most of its discovery staff (including the aforementioned director) has been laid off as the company focuses its resources on (gasp!) product development commercialization.

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13. tom bartlett on October 8, 2005 12:00 AM writes...

"That payoff often comes in the form of a Merck or Pfizer buyout. "

You really, really,really don't want to get bought out by Pfizer. Trust me on this.

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14. Kurmudge on October 8, 2005 1:00 AM writes...

I also have difficulty seeing what is wrong with big companies in-licensing or acquiring smaller firms. That is precisely the scenario that enables the higher risk entities to obtain capital to do the initial work. The system needs all of the pieces- the combination of academia, small start-ups, and big pharma is a lot stronger than any other alternative.

I would only add that, as one who transfers material and compounds into a university research program, Rochester may be guilty of a reachthrough (they are/were), but that blessing is returned in spades by the pharmas. Look at companies such as Ariad, where the entire philosophy is to develop an IP portfolio by lending a hammer to a professor who is financed by someone else, and claiming title to the house and garage built using the hammer.

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15. Southern Chemist on October 8, 2005 4:21 AM writes... Derek from the Really Deep South.

I could go on, and have. But I think I'll close with an item from this morning's news wires. Merck has announced that they have successfully tested a vaccine that will likely prevent the vast majority of cervical cancers. That must have been accomplished by their idle scientists in those brief intervals between cackling with glee while they threw stacks of hundred dollar bills into the air, but I'm glad they took the time to do it. Does this, I'd very much like to know, count as a discovery?

Depends how you spin it. Looks like Merck in-licensed the vaccine technology, according to this article in today's Age newspaper.

Licensed from a large Aussie biotech CSL (market cap A$6.8e9), who appear to have funded the original academic research (or am I reading between the lines incorrectly?).

I can hear the conspiracy theorists formulating their responses even from this side of the Pacific...

But back to your comment. From the newspaper reports, it's not clear to me who did what. Did CSL develop the original academic work into a real product and licensed that to Merck, or did the Merck scientists do most of the digging and jewelry crafting themselves, like COX-2? Perhaps this was a bad example.

Regardless, it's unlikely that any one would benefit from the vaccine without Merck's involvement.

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16. Grubbs the cat on October 8, 2005 7:52 AM writes...

I think for a majority of people (academics or biotechees) the reason for quotes like that is quite simple: ENVY! Let's admit it - I am also working in big pharma, earning a lot more than any academic in my age-group, and by career is not dependent on publishing in high-impact journals (although my company is very pro-publish - and not just patents...).

As for the biotech, any big pharma does not need to go and seek collaborators if they want to run a highly expensive clinical trial. Surely, that can't always be a great feeling if you have a candidate and then you have to go out and look for someone to finance it...

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17. Kay on October 11, 2005 6:47 AM writes...

Regardless of the perceived role of all the perceived symbiotic relationships, why can't this industry produce "something that improves a person's health enough that they're willing to pay us money for it" at a growing or even steady rate? There's no need to argue about the role of perception here ... stock price is the controlling authority.

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18. basic reasearch on November 28, 2006 10:39 PM writes...

While there would be no drugs or therapies without big pharma or biotech there would be no big pharma or biotech without basic research done without regards to profit (oh my) by academics.
PS - I am so jealous of Grubbs but that will change once I have tenure.

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Listed below are links to weblogs that reference The Great Divide:

The Great Divide Between Industry and Academia from Vaccines for Development
Derek Lowe discusses the love-hate relationship between academia and industry. The first thing that I feel like saying to this professor is that Merck, which is indeed one of those Big Companies That Makes Money, presumably doesn't employ an army... [Read More]

Tracked on October 7, 2005 7:11 PM

Tangled Bank #39: Science and Medicine Blog Posts from Genetics and Public Health Blog
The Questionable Authority is hosting this issue of Tangled Bank #39. Here are the posts that captured my interest this week: Eugenics at Respectful Insolence. Industry vs. Academia at... [Read More]

Tracked on October 19, 2005 8:19 PM

Wondering whether you should aim for the ivory tower or try to make big bucks in big pharma? Via the Tangled Bank, a bi-weekly blog carnival of science and medicine posts, In the Pipeline has a post on the different approaches to biomedical research ... [Read More]

Tracked on October 19, 2005 8:25 PM


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