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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

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: derekb.lowe@gmail.com Twitter: Dereklowe

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« Elsevier's RSS Feeds: Maybe a Not-So-Minor Complaint | Main | Dealing with the Data »

March 16, 2012

Merck's CALIBR Venture

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Posted by Derek

So the news is that Merck is now going to start its own nonprofit drug research institute in San Diego: CALIBR, the California Institute for Biomedical Research. It'll be run by Peter Schultz of Scripps, and they're planning to hire about 150 scientists (which is good news, anyway, since the biomedical employment picture out in the San Diego area has been grim).

Unlike the Centers for Therapeutic Innovation that Pfizer, a pharmaceutical company based in New York, has established in collaboration with specific academic medical centres around the country, Calibr will not be associated with any particular institution. (Schultz, however, will remain at Scripps.) Instead, academics from around the world can submit research proposals, which will then be reviewed by a scientific advisory board, says Kim. The institute itself will be overseen by a board of directors that includes venture capitalists. Calibr will not have a specific therapeutic focus.

Merck, meanwhile, will have the option of an exclusive licence on any proteins or small-molecule therapeutics to emerge. . .

They're putting up $90 million over the next 7 years, which isn't a huge amount. It's not clear if they have any other sources of funding - they say that they'll "access" such, but I have to wonder, since that would presumably complicate the IP for Merck. It's also not clear what they'll be working on out there; the press release is, well, a press release. The general thrust is translational research, a roomy category, and they'll be taking proposals from academic labs who would like to use their facilities and expertise.

So is this mainly a way for Merck to do more academic collaborations without the possible complications (for universities) of dealing directly with a drug company? Will it preferentially take on high-risk, high-reward projects? There's too little to go on yet. Worth watching with interest as it gets going - and if any readers find themselves interviewing there, please report back!

Comments (47) + TrackBacks (0) | Category: Academia (vs. Industry) | Business and Markets | Drug Development


COMMENTS

1. PharmaHeretic on March 16, 2012 11:45 AM writes...

The real question is- can biotechs, medium pharmas, startups, institutes and academia absorb all (or even the majority) those lost their jobs at big pharma. I think NOT.

This is going to be another temporary employment opportunity for a few connected people who lost their a jobs at big pharma and some CONMen (academics). Beyond that, it is just a show- like almost everything else in the world today.

Permalink to Comment

2. Chemjobber on March 16, 2012 11:47 AM writes...

My question: where is it going to be? Doesn't Merck have a location in San Diego already?

I seem to recall a buyer's/renter's market for lab space...

Permalink to Comment

3. Anonymous on March 16, 2012 11:49 AM writes...

@2
Merck closed its San Diego site years ago.

Permalink to Comment

4. anon the II on March 16, 2012 11:53 AM writes...

Didn't Novartis have about the same thing (including Schultz) a few years back? What ever happened to that? Did Merck just buy it and change the name?

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5. PharmaHeretic on March 16, 2012 11:55 AM writes...

and just to be clear, I am proposing that academia and a lot of scientists today has no right to criticize old-fashioned CONmen such as charlatans and priests. Their behavior is now no better than those whom they pretend to detest.

Having said that, charlatans and priests, are often nicer human beings who at some level are aware of the emptiness of their claims- unlike those who pretend to know the 'truth'.

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6. Nick K on March 16, 2012 12:14 PM writes...

Could someone cleverer than me explain how this venture is supposed to have a higher probability of success than the traditional model of drug discovery?

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7. Chemjobber on March 16, 2012 12:17 PM writes...

3: Yep -- I was wrong. 2005 was when that happened, looks like. (I wonder where in LJ/SD it was...)

Permalink to Comment

8. anon the great on March 16, 2012 12:54 PM writes...

Question:

Lets say you just discovered a novel and very lucrative drug target in an academic lab. What is the best strategy to screen small molecule libraries and find leads while still maintaining the most IP rights as a small independent entrepreneur?

In other words, what other options like this CALIBR thing exist for academic spin-off companies and what are their ups and downs?

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9. DeeL on March 16, 2012 1:15 PM writes...

90,000,000 ÷ 7 = 13,000,000
13,000,000 ÷ 150 = 87,000
Benefits ~ 30% of that
87,000 * 0.7 = $61,000
Need I say more?

Permalink to Comment

10. Biotechtranslated on March 16, 2012 1:19 PM writes...

@7:

The old Merck San Diego site was right next to the old Agouron building which became WL, which became Pfizer, which then closed when Pfizer built their new SD site.

General Atomics Court was the street I believe.

Mike

Permalink to Comment

11. Anonymous on March 16, 2012 1:27 PM writes...

90,000,000 ÷ 7 = 13,000,000
13,000,000 ÷ 150 = 87,000
Benefits ~ 30% of that
87,000 * 0.7 = $61,000
Need I say more?

/end thread

Permalink to Comment

12. SP on March 16, 2012 2:00 PM writes...

Why does every picture I've seen released with this announcement involve various poses with a fish?

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13. Chemjobber on March 16, 2012 2:17 PM writes...

10: Is this near the General Atomics building with the swimming pool the old-timers would talk about?

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14. BioBritSD on March 16, 2012 2:29 PM writes...

@ 4. anon the II on March 16, 2012 11:53 AM: Peter Schultz had headed up a Novartis site, GNF (Genomics Novartis Foundation) but was removed I think about a year ago. This site seems to be being absorbed back into Novartis, rather then the independent site it had been under Schultz's reign.

It certainly had certain reputations around it, a rather loose (academic) interpretation of employment law, software licensing, and the separation of projects and time between GNF and Scripps activities. This is all gratuitous third hand reputation mind, I'm sure someone reading this actually works there. Regardless, hopefully Merck have an interest in making the site successful.

wrt to their old site, I had always thought it was down on coast blvd, there is a small biotech down there now, near the contemporary art museum, whose name currently escapes me. Guess I was wrong.

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15. Anon on March 16, 2012 2:52 PM writes...

I hope the vendors don't fall for this and give them academic prices...

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16. Mutant Dragon on March 16, 2012 3:03 PM writes...

Heeeyy, that's out in my neighborhood. And yes, economic situation for the industry down here in SD has not been fun, no denying...

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17. luysii on March 16, 2012 3:45 PM writes...

What is truly sad about this, is the money I've made on Merck stock in the past few weeks. This, despite the jettisoning of chemists and biologists who (presumably) will fill their pipeline.

Even without figuring office overhead and malpractice (30 -50%), the dollar amount comes out to more than Medicare would pay me for the initial consultation and care of 100 strokes (as of their payment rates of 11 years ago). Which do you think is more socially useful?

Back than (and perhaps now) Medicare pays no more for going to the ER between 11PM - 7AM to see someone, which may explain why you can't find a neurologist for your mother when you really need one.

The times are out of joint.

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18. hopeless on March 16, 2012 4:34 PM writes...

6. Nick K on March 16, 2012 12:14 PM writes...
Could someone cleverer than me explain how this venture is supposed to have a higher probability of success than the traditional model of drug discovery?

-by only pick the winner

Permalink to Comment

19. DLIB on March 16, 2012 4:35 PM writes...

It sure gives the impression he had something to do with the capture of that fish...

Permalink to Comment

20. hn on March 16, 2012 4:36 PM writes...

So what did Novartis get out of GNF?

Permalink to Comment

21. leftscienceawhileago on March 16, 2012 7:46 PM writes...

Just how many drugs came out of GNF again?

Permalink to Comment

22. leftscienceawhileago on March 16, 2012 7:47 PM writes...

Just how many drugs came out of GNF again?

Permalink to Comment

23. leftscienceawhileago on March 16, 2012 7:48 PM writes...

Just how many drugs came out of GNF again?

Permalink to Comment

24. Sean on March 16, 2012 8:41 PM writes...

It's an interesting idea and perhaps can reduce friction in the intellectual property flow between both sides.

Ultimately, it will come down to whether or not the company can discover/develop a useful pipeline of products.

Permalink to Comment

25. Anonymous on March 16, 2012 9:03 PM writes...

It won't have a higher probability of success but a few other companies are doing something similar and it's fun to throw 90 million down the toilet. That way we have a reason to lay off more people.

Permalink to Comment

26. Namork on March 16, 2012 9:27 PM writes...

I have been reading this blog for at least 5 years now, and I check these post almost daily. I have never posted, but this post piqued my interested and I need to say something. I worked in pharma for 7 years as a principle scientist, then made the jump back to an academic lab and am now a PI. I was successful in pharma - played the "game" as good as anyone and was certainly a guy that was considered to be on the rise, but I really couldn't take any more of the strategic changes so I made the move. All this to say that I think that I am in a good position to make comments on the merits of both environments. Let me start by saying this: Good people and bad people are everywhere - it has nothing to do with where you are. The truth is that both sides are totally wrong about the other. Pharma thinks that academics are idiots that don't have clue about what they are doing; and academia....well, they don't think much about pharma folks, mostly because they are ignorant. It's a shame. I am fed up with the 'us' and 'them' mentaility. It reminds me of the GOP and the dems. Stupid. The reason that pharma is failing - sorry Scannell - is not because of low hanging fruit, or any other byzantine explantation, but simply a consequence of the model. We are not making widgets. An MBA cannot guide the strategy of a scientific pursuit. Hate to say it, but what pharma needs is a few decisive managers that take a stand and call out "shit". The most successful firms (you know who you are....I never worked there but Merck in Montreal was supposed to be a model of this) had a hard-ass manager that would say "sit down and shut the f' up" if you deserved it. Thoughts?

Permalink to Comment

27. @Namork on March 16, 2012 9:47 PM writes...

So, were you a "principled principal" scientist back in Pharma?

Just kidding...I couldn't resist picking that "low-hanging fruit"!

Permalink to Comment

28. newnickname on March 17, 2012 5:55 AM writes...

@9 DeeL:

I've been looking for an opportunity to post this and this looks like as good a time and place as any. This is from Bloomberg Business, March 5-11, 2012, "The Man Who Fell to Earth" by WD Cohan, pp 68-73. Google "Dan Zwirn Beautiful Machine" for the entire article at sfgate dot com. It's about a hedge fund debacle.

Quote: "... the Gibson Dunn report was completed in March 2007. Then Pricewaterhouse fielded a 90-person team, led by partner Scott Sulzberger, to comb through nearly every aspect of the business. Despite pressure from Zwirn to complete the audit swiftly, it wasn't finished until Dec. 24, 2007, at a cost of $23 million."

90 pencil pushers worked around 10 months for $23 MM. That works out to about $325,000 per man-year. (What's the burn rate at each of your companies?) And their Class A office space probably doesn't need working fume hoods. And they didn't have to pay for NMR or hazardous waste disposal.

Zwirn amassed a personal fortune of around $700 MM in four years of "managing" the fund.

Why do I see vultures and feel like carrion?

Permalink to Comment

29. Anonymous on March 17, 2012 8:36 AM writes...

@26
"Hate to say it, but what pharma needs is a few decisive managers that take a stand and call out "shit"."

Unfortunately scientists who have the brains and the courage to call out shit are usually shit-canned by their senior management.

Permalink to Comment

30. coprolite on March 17, 2012 8:54 AM writes...

I for one am excited that Merck is finally doing something about their excess of acronyms, they aren't going to use themselves!

Permalink to Comment

31. clueless on March 17, 2012 9:12 AM writes...

@26
"Hate to say it, but what pharma needs is a few decisive managers that take a stand and call out "shit"."

Hell no.

The key is to have a long term vision and strategy in place (in science and bussiness). Otherwise shit just keeps popping up, managers will get rewarded by calling out shit.

Permalink to Comment

32. clueless on March 17, 2012 9:26 AM writes...

21. leftscienceawhileago on March 16, 2012 7:46 PM writes...
Just how many drugs came out of GNF again?

-If Institutions like GNF are expected to explore science that ultimately drug oriented but not necessarily with time restrains, I would not ask question how many drugs but how many targets it has delivered.

Permalink to Comment

33. Cellbio on March 17, 2012 10:24 AM writes...

I was one who was willing to, and did call out "shit" when high priced consultants reworked our company, and continued to do so as the scientists around me played the game to borrow Namork's phrase. I agree that more scientists need to do this, and need to learn to do it effectively.

Clueless, I disagree about strategy and vision. These are usually apple pie and motherhood stuff, almost always well developed in pharma and often the tools used to create an impression of value creation (at least in my experience). The difference I saw from good times to bad was culture. Certainly culture, when on laminated postings in breakrooms is motherhood and apple pie too, but true culture as practiced daily sets a tone that we are either respecting input and being honest about the status of programs and pipelines, or we are "wink, wink" productive contributors to the agreed upon strategy, dutifully advancing down the pipeline.

Two examples, would you advance a program whose target evokes a response opposite that intended? Surely not, why would a company guy show the back side of a bell-shaped curve (like the academic who first published it)? Would you advance a biologic that is intended as an antagonist but clearly show agonism and evokes a response in primates like that see for TGN1412? In both cases, within a well developed strategy that had short term and long term vision, these easy decisions where fought by "advocates", looking for personal gain, by methods that including providing mis-information and character assassination. When called out, the upper management team made the right choices and canned the programs, but not the people who fought battles. Culture was then firmly set.

In contrast, in the most successful times I have seen strategy was not highly refined, except perhaps in the individual scientist and small teams, resulting in an entrepreneurial environment. While I do believe a certain level of strategy and vision make sense and don't believe we can go back to unconstrained research (capital supply short, horizons are short), I am quite sure the in-depth strategy setting and visioning serve more to give a false sense of reducing risk than truly doing so and further serve to provide the means for scientific and MBA managers to reward those that play the game rather than reward true innovation. In the end, I believe the rate at which innovation will occur in your organization while also aligned with a defined strategy is lower than the rate of innovation in the first place.

Permalink to Comment

34. clueless on March 17, 2012 12:22 PM writes...

@33. Cellbio on March 17, 2012 10:24 AM writes...

It should be an obvious call in either of your cases. All those decisions should be data driven, but I do agree making such decisions sometimes could be harder when politics are involved, so a good culture is surely needed. But culture is not the only factor to drive success. Vision is about what you will do, while strategy is about when and how. Culture connects all. Of course you would also need biotech-like efficiency, highly qualified and capable people, etc.

A worst scenario I could imagine: a boss who just got his job, needed something different (he called it innovative) from his predecessor. After read WSJ/NYT or whatever, he believed aging was his best bet (the other called it vision), so he asked his associates to work on those diseases that have not yet been full understood (they're called challenges). Soon dozens of targets were proposed by his "capable" people (they believed they were creative), evaluated (lots of strategies were there too) and worked on. Excitements and disappointments, ups and downs (finally a manager sensed it's time to call BS), and you guessed the rest stories.......

Permalink to Comment

35. darwin on March 17, 2012 3:54 PM writes...

Peter Kim is a Tool, but less so than Frazier who is all too consumed with Sandusky ongoings. Merck is a shame-embarrased to have that line on my CV.

Permalink to Comment

36. ano2 on March 17, 2012 5:47 PM writes...

Previous recent posts have raised a question about "what went wrong in Pharma R&D"? Capture all those great ideas from academia, and certainly new drugs will fall like fruit from the forbidden tree. Don't think so. Won't happen. Just a wishful concept that continues to cycle. Shultz is a smart and clever guy, but what does he know about making drugs? What drugs has Peter ever been associated with? And splitting time between two full-time jobs never, NEVER, is successful, except to help satisfy one person's ego.

Overall, a glaring example of a "well-intended" initiative that will, predictably, suck millions of dollars of funds, and at a future date be declared an organizational excess. Ths does not represent the "pathway to past glories" that so many who post in the blog seem to be so unrealistic about.

Permalink to Comment

37. Blomquist on March 18, 2012 8:29 AM writes...

If you eventually get fired you can call yourself "excalibr"

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38. Anonymous on March 18, 2012 12:34 PM writes...

Just in the interest of historical clarity:

Merck purchased SIBIA neurosciences, which was located on Coast Blvd in La Jolla, in 1999 and by 2001 moved it all to General Atomics Ct.. The venture, known as MRL-SD, lasted until 2005.

At the peak there were ~120 FTEs.

Permalink to Comment

39. Merckie on March 18, 2012 4:25 PM writes...

@darwin What was your role at Merck, if I may ask?

Permalink to Comment

40. Anonymous on March 18, 2012 5:36 PM writes...

If you eventually get fired you can call yourself "excalibr"

Well done, sir.

Permalink to Comment

41. Chemjobber on March 18, 2012 10:59 PM writes...

38: Thanks!

Permalink to Comment

42. Zippy on March 19, 2012 8:48 AM writes...

Looks like a backdoor for PK.

Permalink to Comment

43. Lab Monkey on March 19, 2012 10:31 AM writes...

Doesn't seem any dumber than any of Merck's other investments. They have lately made a habit of buing for dollars and selling for cents. Take the $1.1B sinkhole, Sirna.

Permalink to Comment

44. NJBiologist on March 19, 2012 11:36 AM writes...

@37: If you get a job while still employed at CALIBR, can you call yourself "Arthur" in recognition of having pulled yourself out of there?

Permalink to Comment

45. daen on March 19, 2012 6:10 PM writes...

Apologies:

"We're knights of the Round Table, we SAR whene'er we're able. We do routines and massive screens with benchwork impec-cable, We dine well here in San Diego, we eat sago in a Winnebago. / We're knights of the Round Table, our plans are for-mi-dable. But lest one forgets, we're given targets that are quite un-drugg-able, We're Oprea mad at work, we try to placate Merck. / In biz we're tough as bootz, We hope the thing elutez. With tigthened grips, we rail at Scripps and impersonate P Schultz. / It's a grim, grim life at CALIBR / We often have to fall on Excalibur ... "

Repeat ad nauseam, which is probably no more than once.

Permalink to Comment

46. anonymous on March 20, 2012 9:43 PM writes...

@14 "It certainly had certain reputations around it, a rather loose (academic) interpretation of employment law, software licensing, and the separation of projects and time between GNF and Scripps activities."


Add real estate and stock transactions to the list of things not to be looked at too closely and you'd be quoting the SOP for Scripps under Richard Lerner ...

Permalink to Comment

47. Anonymous on March 23, 2012 9:04 PM writes...

Yaa... and when they have layoffs (and they will) someone may be packing a .38 CALIBR!!!

Permalink to Comment

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