Eli Lilly's Open Source Approach To Early Stage Research
Eli Lilly, which like many big pharmas faces patent expiries and an uncertain late-stage pipeline, has worked to improve ties with the venture and academic communities to help spur access to early-stage and less expensive assets. Since 2009 it has operated a web portal that allows outside researchers to submit compounds for interrogation using Eli Lilly’s drug-discovery assays.
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Approvals jumped, venture retrenched and dealmakers expanded on 2010’s creativity. Pharma’s thirst for payer-friendly innovation and emerging markets infrastructure pushed M&A valuations skyward, and threw VCs and drugmakers closer together. The year 2011 was also when we said goodbye to Lipitor, hello to the euro crisis, and “see you soon” to biosimilars.
If 2010 was the year when pharma introduced new models, 2011 was the year it discovered that executing on its plans required a new mindset. There was a realization that pharma input and capital were required at the earliest stages of company creation. Innovation remained the order of the day, though pharma’s attempts to innovate looked strikingly similar to one another. We continued to see risk-sharing deal structures, emphasis on emerging markets, ongoing externalization and the biotech-ification of pharma, and stronger emphasis on “unmet medical need. Pharma also did more to work with VCs, payors, generics companies, and each other. The year saw a recovery in US drug approvals and launches, but the high prices associated with some of those new therapies and austerity in Europe also shed light on the health technology assessment-dominated future that likely faces most markets, including the US.
IN an effort to forge earlier and stronger ties to venture-backed biotechs, the new Merck Research Venture Fund illustrates the lure -- and the limitations -- of strategic pharma-VC relationships. Merck has endowed the MRVF with $250 million and the fund will make a series of investments in life science venture capital firms around the globe. Simultaneously it has also staked a second fund, the Global Health Innovation Fund, with an additional $250 million to invest in later-stage companies outside of the drug area.