Boston biotech backers quit Dana-Farber board after U-turn on investment policy: report

The Dana-Farber Cancer Institute has reportedly barred trustees from newly investing in biotechs created to license its science, leading to the resignation of board members including a co-founder of C4 Therapeutics.

Under the old policy, trustees could invest in startups based on Dana-Farber research and, before a rethink in 2017, could negotiate licensing deals with the cancer center on behalf of startups. The policy allowed Marc Cohen, who became a Dana-Farber trustee in 2004, to invest in startups and take part in negotiations between the cancer center and biotechs he helped set up, including C4.

Now, Dana-Farber has strengthened the restrictions on the activity of trustees, and Cohen and a C4 investor, retired Harvard Business School professor Malcolm Salter, have left the board. The changes follow an investigation by The Boston Globe.

There is no suggestion of wrongdoing on the part of Cohen, Salter or the five other people known to have invested in Dana-Farber spinouts while serving as trustees. Rather, the question is whether the cancer institute’s policies should have allowed trustees to invest in, and at one time negotiate for, biotechs based on Dana-Farber science given the potential for perceived conflicts of interest.

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Dana-Farber reportedly defended its practice of allowing trustees to invest in its startups when first approached by the Globe. However, last week Dana-Farber changed its position, revealing a new policy that bars its trustees from making new investments in, or serving as a board member or executive of, startups set up primarily to license technology from the cancer institute.

Cohen launched five startups based on science originating at Dana-Farber while a trustee. Prior to the policy change in 2017, Cohen took part in intellectual property negotiations between three of his companies and Dana-Farber.

“Had they said you can’t do this, I obviously wouldn’t have done it, right? I was looking to them to guide me,” Cohen told the Globe. “I was focused on how do I get this [intellectual property] out there so we can create new therapies for patients.’’

After the latest policy change, Cohen resigned from the board. Cohen will continue to advise a philanthropy fund set up by Dana-Farber. Salter, who invested in three of Cohen’s startups, has also resigned to focus on the venture philanthropy program.