NÉOMED Institute to leverage increasingly collaborative nature of pharma R&D

AstraZeneca providing cash & research facility

The Quebec government is providing a $28-million grant to help jump-start yet another collaborative R&D model for biopharmaceuticals aimed at encouraging industry-academic collaboration and countering the downturn in the sector's R&D spending in the province. The NÉOMED Institute has raised $71.5 million in cash and in-kind towards its $100-million, five-year target, and will make its home in the recently shuttered AstraZeneca research centre in Montreal.

For its part, British-Swedish pharma giant AstraZeneca plc is donating the land, building and state-of-the-art equipment from its former pain control research centre as well as the intellectual property for three of its pain molecules and $5 million in cash. The in-kind portion of AstraZeneca's contribution is valued at $35 million.

The Quebec government's contribution comes from a new $125-million fund for public-private partnerships in the life sciences sector, announced in its recent Budget (R$, November 21/12). AstraZeneca's participation grew out of discussions between the company and the government, led by Dr Philippe Walker, the former head of the Astra's pain research centre.

"The biological father of NÉOMED is Philippe Walker. After the announcement of the closure, he began to think what he could do to use the assets for the benefit of Quebec," says Dr Max Fehlmann, NÉOMED's inaugural president and CEO and the former president and CEO of the Quebec Consortium for Drug Discovery. "Behind the negotiations, this was on the minds of everyone. It's the price to pay to leave in peace. Astra still has to do business in Canada."

Pfizer Canada is also participating with $3.5 million in cash and another two companies are set to contribute $5 million. The balance is expected to come from federal sources such as Industry Canada, the Networks of Centres of Excellence program and the Canadian Institutes of Health Research.

"The business plan is to be self-sustainable on the public side after five years ... Within 10 to 15 years, revenue from projects we are sourcing now will make NÉOMED self sustaining," says Fehlmann, adding that half of all projects must be based in Quebec. "Our modelling is based on an anticipated 21 projects in the first five years which will be at different stages and different attrition rates. There will be three to five projects at any one time."

NÉOMED will locate promising small molecules and develop them up to early proof-of-concept — the stage at which venture capital is willing to invest. Fehlmann says a key model for NÉOMED is the highly successful Centre for Drug Research and Development based Vancouver.

"CDRD was an inspiration and Natalie Dakers (president and CEO, CDRD Ventures Inc) was also an inspiration," says Fehlmann. "The major differences are that we will remain virtual so there will be no wet facilities and we'll outsource all the work. We will also also take development up to proof-of-concept in humans — R&D, Phase I and Phase II — whereas CDRD takes their development up to proof-of-concept in animals."

NÉOMED will offer companies exclusivity to intellectual property rights on a project-by-project basis. Fehlmann says the institute's role is to mentor projects and add value early on to validate drug molecules and then offer companies exclusive rights to develop them further. The facilities at the former AstraZeneca research centre will be rented out to firms. Fehlmann says they can be collaborators with NÉOMED "but there are no obligations."

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