Cooperation Is the Key for NJ’s Universities and Biotechs

Ed Silverman | November 29, 2010 | Health Care
Academia and industry are just starting to work together in the Garden State. Can each deliver what the other needs to thrive?

Earlier this year, Eli Lilly chief executive officer John Lechleiter lamented that US colleges were failing to churn out sufficient numbers of students with bachelor’s degrees in science, technology, engineering and math to meet the high-tech needs of the future. This development, he argued in a series of speeches and newspaper columns, is contributing to a lack of needed innovation and, subsequently, placing the long-term health of the U.S. economy at risk.

“The evidence is mounting that we are facing nothing short of an innovation crisis in America’s life-sciences sector,” Lechleiter told the Detroit Economic Club.

To cope, the Lilly CEO, whose pharmaceutical portfolio includes ImClone Systems, the cancer-drug unit based in Somerville, suggested greater investment in science education, particularly at the grade-school level, and a better-funded basic research infrastructure within academic and government labs, among other things. “The U.S. is the undisputed leader in medical advances, but we are in danger that we are losing what has been America’s greatest competitive advantage.”

New Jersey colleges and universities are starting to take the necessary steps to create this research infrastructure, as are the state’s life-sciences corporations. The goal is to build bridges between academia and industry, crafting complementary relationships that are beneficial to both.

But it’s early days — very early — and notable challenges and obstacles must be overcome. The Garden State’s precarious financial position has led to deep cuts in funding for higher education. Science programs have been cut to the bone, and there is no sense of when money will start to flow again. At the same time, biomedical companies are also feeling the squeeze, laying off employees and possibly transferring jobs to other states or overseas. And in some cases, foreign countries have poured cash into their own high-tech infrastructure, making them very alluring to domestic biotech firms.

The Interplay Between Industry and Academia

Lechleiter is far from alone in decrying the problem and turning the national conversation, in part, toward education as a salve. In recent months, several think tanks and industry organizations combined to issue policy statements and reports that attempted to define the issue and make recommendations that urged greater emphasis on strengthening the interplay between industry and academia.

For instance, the Council on American Medical Innovation (CAMI) — which includes more than a dozen organizations representing professional medical societies, patient advocacy groups, universities, venture capitalists and drug makers –teamed with We Work for Health New Jersey, the HealthCare Institute of New Jersey and BioNJ, to back a report that warned U.S. leadership in medical innovation is “ours to lose.” The CAMI report included recommendations to increase federal funding for more science education from kindergartens all the way to community colleges; boost the number of U.S. and foreign students who are pursuing graduate degrees in biosciences in the U.S. and foster more collaboration between industry and academia.

It was hardly a coincidence, however, that the report, which was national in scope, was unveiled in New Jersey. Despite a well-publicized string of cutbacks by the world’s biggest drug makers, many of which are headquartered in the Garden State or maintain sizeable operations here, the nation’s medicine chest continues to employ tens of thousands of people who work in all aspects of developing, financing and marketing medicines. California may boast about its biotechs and risk-taking financiers. Massachusetts may be home to prestigious academic teaching centers and world-class hospitals. But New Jersey still commands a nuts-and-bolts kind of respect for its role on the life sciences stage.

Still, there is no guarantee this high profile will last, especially not with forecasts for even more industry job cuts. This was painfully evident in recent weeks, when Roche disclosed plans to eliminate 4,800 jobs worldwide, including 900 positions from the Nutley facility that was already scaled back last year after the Swiss drug maker gobbled up Genentech, the world’s leading biotech, and began playing corporate musical chairs with divisions and departments. Of course, job cuts are being spread around the country as the pharmaceutical industry juggles thin product pipelines and expiring patents on big-selling drugs with decisions to expand quickly in other regions of the world, notably Asia.

At the same time, higher education is under its own kind of special pressure, thanks to the state budget deficit that prompted Gov. Christopher Christie to whack nearly $200 million in funding this year. Although he later promised that higher education would be the first place he would look to restore funds when good times return, the near-term outlook remains dismal. New Jersey, in other words, has the worst of both worlds. The state’s academic institutions are only finding it harder to fulfill their missions and grow closer to drug makers and biotechs that, increasingly, have scarcer resources and are looking way beyond their own backyards for specific talent and low-cost staffing needs.

No Meaningful Relationship

“The relationship (between industry and academia) is not broken and there’s no impediment to improving it, but it never really existed in any meaningful way, either,” says Jay Tischfield, a genetics professor, executive director of the Human Genetics Institute of New Jersey and scientific director of the Rutgers University Cell and DNA Repository. “That’s because the net amount of life sciences research in the [state’s] university system and net number of graduates in PhD programs is not nearly what it needs to be to attract the companies when they can locate anywhere in the world.

“Years ago, Lilly never had anything based outside of Indiana. But when they took that first step, it was to Singapore with a research facility. Why? It’s very simple. Singapore poured a fortune into biologics research and took a long-term view. Now, it’s a biopolis. The kind of investment to create life sciences research centers and bring in large number of scientists to build critical mass has never been done here. There were small glimmers of hope in the stem cell area, but that was a big bust. And the state never supported centers of intellectual activity. Some view the pharmaceutical industry as nuts and bolts manufacturing, but the fact is nuts and bolts manufacturing can be done anywhere in the world. The question is where will R&D take place? If NJ doesn’t act quickly it will lose its one advantage.”

This same complaint was heard earlier this year, when Christie cut funding for two programs important to the biotech industry – the Technology Business Tax Certificate Transfer Program and the New Jersey Commission on Science and Technology. Seeking to somehow fill the void, a collection of 40 high-profile organizations, several leading universities and a few companies — including the Association of Independent Colleges & Universities of NJ; the Healthcare Institutes of NJ; BioNJ; Verizon; AT&T; Montclair University; Monmouth University; NJ Association for Biomedical Research; NJ Association of State Colleges and Universities; the NJ Business Incubation Network; NJ Council of County Colleges; NJ Council of Teaching Hospitals; Rutgers; University of Medicine and Dentistry of New Jersey (UMDNJ) and Stevens Institute of Technology — last summer created a new non-profit called Innovation NJ.

In announcing the initiative, Kathleen Scott, vice president of research and interim dean of the graduate school of biomedical sciences at UMDNJ, declared that partnerships between the state’s biomedical research institutions, academia and industry, can represent an “invaluable asset.” Broadly speaking, the emphasis is on making New Jersey a hotbed of high-tech activity, but high on the list is the development of life-saving medicines. Essentially, this amounts to a high-profile lobbying effort designed to better engage the Christie administration, which offered its blessing by sending Lieutenant Governor Kim Guadagno to the public announcement.

Such initiatives offer encouragement, if only because they suggest ideas will be exchanged and policies can be crafted. But down in the trenches, higher education and industry appear to be struggling with ways to embrace one another. For instance, Darryl Greer, who heads the New Jersey Association of State Colleges and Universities, says the problem can be tracked to a lack of engagement. In his view, industry should be more willing to help colleges develop the resources to graduate needed students.

“What industry needs to do is be more entrepreneurial and more aggressive in partnering with the colleges. These are expensive fields and our colleges can’t turn on a dime and easily turn out xx more people a year. You need the resources. And industry needs to figure out how it can create the revenue needed to have faculty and whatever else so we can train the people they need. It shouldn’t all be on the institutions. The institution knows how to produce them. That’s not the problem. It’s about identifying resources. The state doesn’t have the revenue, but there isn’t a statewide conversation.”

Complex Puzzles

Of course, different schools offer different programs. State colleges, for example, graduate many nurses, while universities that award post-doctoral degrees launch laboratory scientists into the world. But Sol Barer, the executive chairman at the Summit-based Celgene, one of the world’s biggest biotechs, says academia could help by turning out students who not only specialize in specific fields of study, but can also think holistically and communicate effectively. A pressing issue facing drug makers and biotechs is the ability to piece together larger puzzles that are becoming more complex. He does, however, readily acknowledge that progress can be accelerated by following a two-way street.

“The pharmaceutical industry is, in many ways, a unique place with a unique mission and it is imperative that students in graduate institutions truly appreciate the mission,” he says. “Cooperative educational ventures, including, perhaps, required internships and exchanges of faculty and business leaders and scientists might be interesting.”

Such efforts are, in fact, starting to appear. Merck and Rutgers, for instance, are collaborating on what amounts to a mini-MBA program at the university’s New Brunswick campus for 25 to 30 science employees, who have already taken business classes at the Merck Polytechnic Institute, an in-house educational unit. The idea is to take promising researchers and instill the sort of business acumen that can help develop them into managers with top-down decision-making abilities and understanding.

“It’s a way for us to expand the number of people who can get more deeply into a topic,” says John Constantine, the institute’s executive director and dean. “It’s also a very complementary way to have a relationship with a university like Rutgers, which is helping us create a more well-rounded employee… We’re looking to other institutions to help us with different ways of doing things… The hub of pharmaceutical sciences is in central New Jersey, after all, and this is about as central as you can get.”

And David Finegold, the dean of the School of Management and Labor Relations at Rutgers, who notes the university has a similar program in place with Roche, adds that he was one of the people who wrote a grant proposal that succeeded in obtaining $3.6 million from the U.S. Department of Labor to retrain 960 displaced pharmaceutical workers. The New Jersey Department of Labor and Workforce Development plans to use the funds to leverage the out-of-work talent to “create a world-class bioscience cluster” and keep those people from moving elsewhere.

The grant, he points out, was the result of a collaborative effort by people from academia, industry and government and, therefore, an example of how the three legs of the stool are trying to cooperate in meaningful ways to promote education and employment. The hope is that the beneficiaries can find work with the smaller outfits dotting the state, such as the dozens of biotechs that have emerged in the past decade — so-called specialty pharma that are less research-oriented but acquire and market existing medications, and others that help establish clinical trials.

“What we’re seeing in New Jersey is a vast restructuring taking place,” says Finegold. “It’s important to consider the details of the business models of the companies that are emerging, but if we work closely together, we won’t have any trouble spending that money helping those workers.”

Another initiative that may emphasize the strengths both academia and industry have to offer was just launched by Rutgers, which has formed what it calls the Brain Health Institute to research treatments into autism, Alzheimer’s disease and auditory aging, with backing from the pharmaceutical industry. The hope is to tap the expertise of individual Rutgers researchers who have extensive experience in neuroscience and market that in order to obtain endowments from individual drugmakers. Already, five big pharma companies have signed on as advisers — Johnson & Johnson, Pfizer, Merck, Novartis and Forest Laboratories.

By collaborating, drugmakers would gain access to new research that may be translated into bankable products, while the university and, in particular, the individual scientists who will lead each of three programs, should benefit from new funding mechanisms and a higher profile. “We feel this is an important initiative for the state,” Robin Davis, executive vice dean of Rutgers’ School of Arts
and Sciences, explained in an announcement. “It consolidates the benefits of academic research with the economic power of the New Jersey pharmaceutical industry.”

At the end of the day, collaboration hinges on aligning incentives. The Labor Department grant is a good example of that sort of effort. But government funding cannot be relied on. This leaves industry and academia to come to terms, but bringing them closer together is tricky, says Matthew O’Hara, a partner at MEP Consulting, a boutique research firm based in Boston that specializes in healthcare matters, and who co-authored a recent report called ‘Building Bridges’ for the New Jersey Policy Research Organization, which implored the state to get more actively involved.

“How do you align incentives for the university and the corporation? The difficulty in creating collaboration is that the corporation looks at profit motive and does so in a relatively shorter time frame, while a university is thinking in semesters. Meanwhile, a lot of universities in New Jersey simply don’t have corporations calling them. MIT doesn’t have to make phone calls, they answer the phone. New Jersey has great schools and great professors, but do they have the top people industry wants? Sometimes they do and sometimes they don’t. But we know companies don’t think about state boundaries. I think a lot will hinge on individuals. Pet projects often get things done, because personal energy can foster collaborations. You can set up think tanks and policies, but you need people who want to be actively involved. I think the solution, in part, will come down to being a people issue.”

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