Método clínico

The life sciences plan we recommend will require organized civic leadership to take stewardship of the strategy. Whatever the form of this leadership group, it must have the stature and power to work as a strong strategic partner with KU, KUMC, and the Kansas Board of Regents. It must have the confidence of Stowers and the ability to strengthen productive relations between Stowers, KUMC, UMKC, K-State, UM-Columbia and the hospitals in Kansas City, Missouri have important roles to play.

This leadership group also must have the influence to engage powerfully with the governors and legislative leaders of both states to get academic, political, and philanthropic strategies coordinated fast. In our opinion,

the leadership entity should not be a stakeholder group, with the inclination to spread money around, but rather an entity that will focus relentlessly on quality, strategic momentum, and accountability. Stakeholders should have a strong say, but the strategy needs to be in the hands of a group whose fiduciary anchor is the greater good of Kansas City. The group needs to have the persuasive power that comes with the ability to deploy substantial dollars.

It may be that the reformed, muscular KCALSI that is under discussion is such a group. Or it may be better to create a private 501(C)(3) life sciences investment board that would control the nucleus philanthropic fund we have recommended. In our opinion, the life sciences leadership group should not be subsumed into an endowment board attached to any particular institution. It needs the independence to work effectively with all the institutions in the city. The major philanthropies who contribute to the nucleus fund would undoubtedly have considerable influence over how this leadership group is structured. However, we do not believe the group should be a committee representing different philanthropies. Once the group is constituted, it should represent Kansas City, not the philanthropic organizations or individual donors.

Strategy must be evergreen, and should change as circumstances and experience dictate. Thus, the leadership group must have the clear authority to revise strategy or insist on new approaches. Finally, the group must have staying power. There needs to be continuity of strategy, investment, and oversight for ten years. At that point, and perhaps before, it will be time for fresh thinking about life sciences strategy.

We do not exaggerate when we say that the life sciences leadership group will undertake a responsibility that is as important to the future of Kansas City, and holds as much promise of civic benefit, as any strategic enterprise in the history of the community.

In the thirty years since the founding of Genentech in 1976, the biotechnology industry in the United States has grown from a lone start-up to an industry with $46 billion of revenues. In 2004, the industry consisted of 330 public companies and 1,114 private firms. It employed 187,500 people. Since 1989, revenues of public biotech companies have grown at a 16% annual compound growth rate. The industry is not slowing as it matures. Revenue-growth in 2004 was 19.2% and in 2003 was 25%. In 2004, the industry attracted $20.6 billion in equity investment, including a record $3.6 billion in venture capital, 21% of all venture investments. A robust, growing biotech industry in the Kansas City region will be the most significant economic benefit if Kansas City becomes a leading life sciences research center.

Biotechnology is the science of putting cells and biomolecular processes to work to solve problems. Cells have powerful manufacturing capabilities and the discovery of recombinant DNA in 1974 has made it possible to create new molecules that put DNA and proteins to work in cells. This has enabled the discovery and development of new drugs and agricultural products, new kinds of instruments, and new classes of diagnostic tests. The 1970s also saw the discovery of monoclonal antibodies, which made it possible to penetrate the mysteries of human, animal, and plant immune systems.

The biotechnology industry has traditionally referred to

the array of entrepreneurial start-ups that, beginning in the 1970's, saw the commercial and humanitarian possibilities of recombinant DNA and monoclonal antibodies.

Traditionally, the biotechnology industry has been distinguished from the twenty or so large worldwide pharmaceutical companies (“biotech” vs. “big pharma”), although the products, the research, and even the size of the two sectors increasingly overlap. The cultures of the two sectors, however, remain distinct. Biotech is entrepreneurial, very close to the academy, mostly about research, and ever in pursuit of the new. Big pharma is also a massive R&D operation, but its relative advantage lies in marketing and sales, regulatory expertise, and the ability to put huge amounts of money into product development. These two branches of the life sciences industry are relentlessly competitive, but they need each other. Most of the innovation in drugs, new molecular entities, and medical devices comes from biotech start-ups. The ability to navigate regulatory channels, to focus huge resources on product development and to take things to market is the province of big pharma.

Historically, investment in biotechnology has been drawn to the centers of academic research. Measured by market capitalization of public biotechnology companies, the San Francisco Bay area, powered by research at UCSF, Berkley, and Stanford, is first with $107 billion, Los Angeles - Orange County, with UCLA, Cal Tech, USC,

the Biotechnology Pipeline

A common misperception of the relationship between industry and universities assigned to

universities the role of generating fundamental (basic) knowledge and to industry the role

of performing applied research and developing medical technologies. A closer look at the

ways medical innovations arise and spread suggests that both parties perform much more

complex, subtle, and wide ranging roles than conventional wisdom suggests.

and UC-Irvine is second with $87 billion, the Boston region, with Harvard, MIT, and Boston's superb hospitals, is third with $40 billion. The industry pattern closely reflects the history of NIH university research funding.

If a strong basic life sciences research capacity is the foundation for building a biotechnology sector, it is not, by itself, sufficient. One research powerhouse where biotech has not taken off is New York City. New York missed out because of the combined failure of its research

universities, the state, and the city to create commercial wet lab incubators for new ventures, funding mechanisms to help with start-up capital requirements, and venture- friendly public policies. This is changing. New York City is now making aggressive efforts to promote itself as a biotech center.

To become an important biotech center, Kansas City needs first and foremost to augment its basic life sciences research capacity. But the experience of other cities shows the need to build as well a strong translational research enterprise that can take basic discoveries from the laboratories, translate them into drugs and therapeutic devices, manage animal testing and clinical trials, and get them in the hands of enterprises that can take them to market. Given Stowers' and KUMC's basic science emphasis and UMKC Medical School's focus on teaching,

building translational research capacity may require the development of new institutions. Moreover, Kansas City needs to invest in the entrepreneurial pipeline that takes new discoveries to market. This may require investment in wet-lab and business-infrastructure incubators, start-up and venture capital, and an information network that combines scientists with entrepreneurs and venture investors for new business development.

Translational research is the bridge between the university, or nonprofit research institute, conceptually engaged in the pursuit of knowledge for its own sake, and the dissemination into the marketplace of useful, profitable products by business entities. Universities engage in translational research in the clinical departments of medical schools, in veterinary and agriculture schools, in applied science and engineering departments, and in social science departments. Industry engages in translational research as well, and supports such research by universities in return for a share of the rights to the intellectual property created by academic researchers.

0 10 20 30 40 50 60 5 10 15 20 25 Figure 18 0 50 100 150 200 250 Figure 17

Source: Source: Ernst & Young. Approvals include only new molecular entities, and exclude label approvals, new formulations and combinations. Certain drugs partnered between biotech and big pharma companies are counted in both groups. Big pharma is defined as the 20 largest global pharmaceutical companies by market cap. Companies that do not meet the definition of big pharma and do not meet Ernst & Young’s definition of biotechnology are excluded from the analysis. Biotech R&D expenditures include large acquired in-process R&D charges resulting from mergers in some years.

There are few hard and fast lines of demarcation that separate translational research between that which is appropriately academic and that which is right for

business. The dividing line is functional: when a discovery has a clear enough profit potential to attract private capital for its development into a product or service that can succeed in the marketplace, it moves from the university lab to either a new business typically funded by venture capital or into the product development function of an existing business. Even when a discovery makes such a move, its academic inventors are likely to go with it to work on its development, at least on a part-time basis. Most cities and universities have concluded that basic scientific discoveries and the marketplace need some institutional and financial assistance to promote this technology transfer process. Universities have many reasons for promoting technology transfer. They run the spectrum from altruism to direct pecuniary interest. Columbia University for example, has received more than $1.2 billion of licensing income since 1998 from its share of the intellectual property created by a single researcher, the Nobel laureate Richard Axel. Faculty recruitment in science and medicine is heavily influenced by whether researchers believe their universities offer a constructive environment for technology transfer, and are located where new biotech ventures can flourish. Thus, faculty

researchers, universities, their host cities, and states are natural partners that all stand to benefit from the economic returns of technology transfers.

Fortunately, Kansas City has substantial expertise and hands-on capacity in how to build the translational research and entrepreneurial pipeline. The Kauffman Foundation and the Bloch School of Business

entrepreneurship program, led by Professor Michael Song, are important sources of knowledge and experience in this area. Kansas City should rely on them for leadership in this area.

Kansas City can also look to several cities that have successfully aligned basic research, technology transfer, translational research, new ventures, and commercial success to become growing biotech centers. Three interesting examples are Seattle, New York City, Boston, and San Diego, with New York City demonstrating both what not to do as well as what works. Minneapolis and Cleveland are other possible models. We will briefly discuss each of these cities in terms of the strategies Kansas City may want to embrace in the following case studies.

A. CASE STUDIES