Protected Open Innovation – a way forward for academia – pharma relationships


A blog by N8 Director, Dr. Peter Simpson.

Before my current N8 role, I spent many years in leadership within pharmaceutical companies, building external partnerships with other companies, research institutions and universities. I have found that concerns about financial terms, trust and integrity, and intellectual property (IP), persist in many places – despite there being a wealth of experience in how to handle these issues in successful cross-sectoral partnerships and networks.

I have addressed some of these issues in a recent Drug Discovery Today review article, with Mel Reichman of Lankenau Institute. Aspects of our findings are summarised here.


The drug discovery field is in the midst of a wave of open innovation, that seems likely to transform the pharmaceutical R&D landscape. Open innovation approaches have emerged, which can enable greater resource and expertise sharing by lowering perceived risks.

Patent expirations will reduce pharma’s revenues in worldwide developed markets by $127 billion, representing a 44% reduction in branded drug income. Identifying molecules first, and bringing them to market more rapidly, provides a major benefit financially over being second in a field. Thus, there is tremendous pressure on big companies to reduce costs, while enhancing scientific insights and the pace of innovation. So, large pharmaceutical companies are expanding collaborative strategies with academia – seeking to access new ideas faster and less expensively.


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One lever for open innovation partnerships is companies’ assets – notably, pharmaceutical companies have huge legacy investments in their chemical library assets and the associated troves of data. The value of these can be more effectively realized – for example, by allowing broader testing of the compound collections against the ideas of external academic experts. But how best to keep  valuable information secure in such a partnership?

Protected open innovation can be defined as restricted and controlled sharing of proprietary data – on molecular activity,  chemical structures etc, with external partners. Typically in this model, screening is performed of the company’s chemicals without upfront sharing of information on it; if within the chemical library new IP is discovered in screening against an academic’s idea (a target, or assay, or pathway), that has commercial potential, then the company may exercise an option right to exclusively license the data for commercial use; and if so, the company must pay fair market value for such, determined at the time of license. If the pharma passes on its option, the institution can in turn negotiate a commercial license to the assets to proceed further, typically with another organisation.

Variations of this partnership approach are growing rapidly. An analysis of publications on large-scale compound screening, included in our Drug Discovery Today article, shows this field is now widely led from academia, rather than the pharmaceutical companies:


academia HTS


Such partnerships require a significant degree of trust and mutual understanding in order to succeed. Alignment of organisational cultures, and longer-term commitment, is also extremely important. There are now increasing examples of academic expert networks that are becoming empowered in partnerships with pharma to identify and bring forward novel targets for screening, proposed from their associated network of academic experts – including several partnerships which I established while working at AstraZeneca.

Many more such partnerships are possible; however significant hurdles exist to expanding the use of a protected open innovation model. These include the need for:

Proactive management of collaborations. Poorly handled relationships are at least as major a cause of partnership failure across sectors as scientific differences.
Deep intellectual partnership across organisations – open innovation does not work well as a way to seek to get preclinical research performed on the cheap. For example, commitment of partners in relationships to identifying, and agreeing new project opportunities collaboratively, using the background knowledge of both.
• Agreement to and publishing of a simplifying framework of widely acceptable IP agreements, in a precompetitive manner, which would accelerate the initiation of relationships.

Pharma companies deepening their collaboration in universities can deliver commercial benefit, notably in emergent disease fields in which the academic partner has strength, and where a Pharma cannot rapidly acquire internal expertise. This has been evidenced recently in the surge of business-academic partnerships leading to wave of new clinical trials in immuno-oncology.

Universities understanding their strengths, and working collaboratively in stronger networks, can enable them to have a strong voice in this emerging ecosystem, and can make them a better partner for the pharmaceutical company. Well-connected academic networks with established decision-making structures – for example, N8 Research Partnership, who are currently actively working up opportunities in this field – will be key partners for agile pharmaceutical companies.


Dr Peter Simpson, Director of N8 Research Partnership