|GlaxoSmithKline CEO Andrew Witty|
A struggling GlaxoSmithKline ($GSK) has set up an economy-sized research spinout with the University of North Carolina at Chapel Hill that's short on cash and long--very, very long--on its promise to hunt for a cure for HIV.
Bannering its commitment to find a cure, the pharma giant is committing $4 million a year for a 5-year stretch to bankroll a biotech startup called Qura Therapeutics. According to The New York Times, Andrew Pollack, who got a preview of an announcement that went out late Sunday night, GlaxoSmithKline is also moving a few of its scientists to the new venture, which plans to eventually commercialize whatever products it may deliver separately from Viiv, the company's joint venture that sells HIV meds.
In Pollack's account, the new venture fits into a trend marked by a surge in joint university/industry R&D operations, comparing and contrasting it with Novartis' ($NVS) ambitious CAR-T collaboration at the University of Pennsylvania.
But GlaxoSmithKline has a big agenda here, which it's trying to pull off on a shoestring budget; unlike Novartis, which has gone all-in in its pursuit of taking the lead in developing a new generation of cancer meds.
First, GSK is trying to highlight the venture as another indication that the company sees a big future for itself in HIV, which CEO Andrew Witty claims is evident in his decision to hang on to Viiv rather than spin it out in an IPO. Analysts, though, generally saw Witty's decision on Viiv as a simple necessity. Struggling on the revenue front after some disappointing product launches, GSK needs the Viiv cash flow to help staunch other wounds. Far from growing research operations, GlaxoSmithKline ripped into its big R&D division in North Carolina's Research Triangle Park late last year as it began to slash research costs, cutting 900 staffers while moving hundreds to a CRO. And styling a discovery-stage startup like this, with a small budget and staff, as a commitment for finding a "cure" is more PR hype than R&D hope.
That's an unusual sight in the Big Pharma world when it comes to early-stage research, and another biomarker of GSK's weakness.
Qura is being headed by UNC scientist David Margolis, who has a keen understanding of just how big this task is. HIV has defied researchers for years. Drug developers have had great success in pushing the virus into a dormant state, but it has remained a lurking threat, hidden inside immune cells ready to mount a comeback.
GSK notes that it has been working on a "cure" for 7 years, while Margolis work has focused on finding a way to "flush" HIV from hiding so that a drug can wipe it out completely.
"We really feel like we are in the very beginning discovery phase," Margolis told the Times. "I can't see something popping up that is going to be broadly successful in the next five to 10 years."
- here's the release
- read the report from The New York Times (sub. req.)