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Private Equity Wins

Leading eye researchers in Australia, and around the world, are filing legal patents at a rate of knots in the wake of private equity firms and investors that are snipping at their heels trying to take commercial advantage of their discoveries.

The intention of the scientists is to obtain exclusive intellectual property (IP) rights for each discovery they make in the hope that one day, it will lead to a blockbuster cure and with it, big cash returns.

According to Associate Professor Nick Di Girolamo, Director of Ocular Research at the University of New South Wales, this means that many great ideas are shelved for years, delaying novel treatment strategies and drug development in the hope of finding a cure and a commercial partner. In turn, this delays important treatments for sufferers of disease.

A/Prof. Nick Di Girolamo and his team are responsible for a breakthrough in restoring vision in damaged eyes using stem cells from a patient’s own eyes. The technique, which has now been used to treat eight people in clinical trials, improves patient’s vision within weeks and also heals corneal ulcers.

A/Prof. Nick Di Girolamo estimates he spends over 25 per cent of his time trying to find the funding he needs to keep his laboratory operational

The only problem is that A/Prof. Di Girolamo’s breakthrough isn’t one that will lead to those cash returns scientists dream about. “We have little chance of commercialising this process because of a previous U.S. patent,” he said.

“Although this is a little disappointing, my personal goal is to treat patients and not have a potential treatment on a shelf. Commercialisation on the other hand would provide the funds to support this research to the next level – that is, refinement of the current procedure and / or development of other treatments.”

A/Prof. Di Girolamo’s technique, which cultivates stem cells harvested from the patient’s good eye or a different part of the eye in the patients own blood products, has been published and is now in the public domain for people to replicate. “Having published our data on the first three patients, researchers in the know-how could replicate the procedure anywhere in the world and this is precisely what we hope will happen,” he said.

In the U.S., scientists, already held back by years of government funding freezes linked to the controversy over the destruction of embryonic stem cells, often find their research options blocked because of the secured exclusive IP rights taken by universities or private companies.

Mr. Bob Lanza, Chief Scientific Officer at Advanced Cell Technology (ACT), a company currently undertaking clinical trials into techniques that use embryonic stem cells to treat retinal disease, said: “You have this complete minefield out there and you know who the victims are? It’s the patients.”

When Mr. Lanza first joined ACT his own research into using stem cells to reverse diabetes was stymied because the company’s competitor, Geron Corporation, held the rights to use embryonic stem cells for diabetes,.

“Here I was, a scientist trying to cure diabetes and I couldn’t use my entire lifetime of expertise to try and develop the technology,” he said.

Mr. Lanza said ACT has spent around U.S. 100 million dollars of investor funds on its research and has also had to ‘play the game of securing intellectual property rights in order to compete.’

“I am coming from a company where we have IP blocking as well,” he said.

“In order for us to get money we have to file patents to protect our rights otherwise we get prohibited from even pursuing out own technology.”

While medical research was traditionally funded by government, more and more private companies are emerging at the forefront of the field, which, according to a report in the U.S. account s for more than 30 billion dollars a year in that country’s scientists’ coffers. No doubt, the commercialisation of scientific research is a key factor behind the race to secure IP rights – the need to secure a long term financial return for all stakeholders is more important than the need to release treatments. If Governments were able to provide more appropriate levels of funding, perhaps the issue of IP rights wouldn’t have arisen quite so significantly.

A/Prof. Nick Di Girolamo says funding is key to conducting research in Australia and most western countries.

“Without funding it is almost impossible to build a team of skilled researchers. A researcher without funds is also less attractive to major institutions, which are always looking to retain or employ high profile scientists with a strong track record to increase their reputation/profile. Finally, without major funding it is difficult to remain competitive at an international level and this is precisely what all scientists strive to achieve,” he said.

A/Prof. Nick Di Girolamo estimates he spends over 25 per cent of his time trying to find the funding he needs to keep his laboratory operational and his research moving forward. And, while his clinical research into stem cell treatments to cure corneal disease has attracted plenty of interest from scientists around the world who would like to be involved in trials, money is definitely holding him back. “Our problem has been lack of Federal Government funding, so we have been scrounging for money to keep this research ticking over. At the moment we only have funds to treat local patients. If properly funded, then this trial could be expanded.”

A/Prof. Nick Di Girolamo believes that the Australian Government should revisit its funding procedures to encourage up and coming scientists employed in the country’s Universities and Hospital Institutions to continue their research on Australian soil.

“Currently, there is a merit based system in place to fund research fellows from two major Federal Government agencies (ARC and NHMRC) and applications are assessed on track record including; publications in international medical journals, grant success, supervising and mentoring, leadership, vision, and future research plan. The problem with these schemes is that they have become too competitive, and while this may be a strategy to support only the very best, the majority of applicants that miss out are very good scientists.

“The other problem is that the pool of money hasn’t changed significantly over the years, and there are more applicants applying for fellowships with higher budgets because of salary increases. This means a lower overall success rate for fellowships.

“The bottom line is that the Australian Government needs to increase available funds, not only to support the very best scientists, but also to fund the next tier of researchers. Currently fellowships from the Australian Research Council (ARC) and the National Health and Medical Research Council (NHMRC) are awarded four to five year salary packages. Perhaps the next best researchers could be awarded a two to three year package as this may be sufficient funds/time to bolster their track records to the next level.”

Read more on Stem Cell Advance ‘Looking to Cure Retinal Disease’ from page 20 in this issue of mivision.