Venture philanthropy has become a hot topic in biotech, particularly as venture cash has grown increasingly difficult to obtain. Nonprofits like the Cystic Fibrosis Foundation have proven willing to finance early-stage long shots to advance significant new therapies. And as Nature reports, the CFF and others have strings attached to the cash. In the CFF's case, that string could soon lead to a new income stream--provided Vertex's closely watched VX-770 makes its way to an approval next year.
The foundation has spent $75 million over the past 12 years on VX-770. That's just a small piece of the nonprofit cash now flowing to new drug programs. And with NIH grants hard to come by, the philanthropies are asking for--and getting--some significant promises of payback.
"The charities are providing funds at the time when the risk is the very highest," Ken Schaner, an attorney at Schaner & Lubitz, tells Nature. "But yes, they expect a return."
Back in 2000, Schaner helped forge a deal between the CFF and Aurora BioSciences. Vertex ended up buying Aurora and gained the VX-770 program in the bargain. That was one of the first such venture deals between a nonprofit and a biotech company. And it helped create a model for others that followed. It was Schaner who helped create the "interruption license," which requires drug developers to hand back a program if they lose interest in it.
- here's the article from Nature