An engineering approach to creating new treatments

We approach the process of discovering and developing new drugs with a pragmatic mindset. We focus on specific unmet needs, sourcing preclinical or early-clinical assets from the public domain or academic sources, and focus our efforts on moving them to First-In-Man trials or clinical proof-of-concept.

Shortening the innovation cycle

Many problems in drug discovery and development are recurrent ones. Fractal takes a unique platform approach to solving these problems, and our technology stack- mathematical modeling and informatics approaches coupled tightly with experimental workflows- serves as the building blocks in the systematic de-risking of new biotech assets.

Better, faster, cheaper

We have developed and pressure-tested our platforms and workflows over a period of years in big pharma, using them to provide rigorous answers to the questions that are on the critical path to a first in human trial or to proof of concept. These approaches dramatically reduce cost, without cutting corners on scientific rigor.

What is Fractal?

Fractal Therapeutics is a model-based drug discovery and development company, focused on building a pipeline of novel assets in Oncology, Infectious Disease, and Rare Diseases.

Our team consists of seasoned pharma R&D executives who have developed and honed a unique approach to drug hunting. This approach- honed over the years in live project settings in big pharma- integrates informatics, mathematical modeling, and simulation platforms tightly with in vivo and clinical pharmacology.

Fractal’s unique interlocking platforms are focused on providing robust model-based solutions to critical-path questions on the road to new asset creation and development. We are applying our platforms to efficiently build a diverse pipeline of novel investigational agents, spanning a range of modalities. These assets are intended to be partnered, either through sponsored research agreements or commercial deals, at the late preclinical or early clinical stages.


Arijit Chakravarty, Ph.D.

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Arijit has served as the CEO of Fractal Therapeutics since its inception in October 2016. Prior to that, he spent 12 years in Takeda Pharmaceuticals in roles of increasing responsibility spanning a diverse range of functions within the R&D organization, including Computational Biology, Cancer Pharmacology, Translational Research, DMPK, and Modeling & Simulation. During this time, he led the creation of many of Fractal's interlocking technology platforms, which were then out-licensed from Takeda with the founding of Fractal. Over his career as a scientist, Arijit contributed to over 50 drug development programs, presented at over 100 conferences and seminars, and co-authored 31 peer-reviewed papers and book chapters, and 89 posters. From 2008 to 2017, Arijit served as Adjunct Faculty in the Department of Computational Biology at Carnegie Mellon University. Arijit has a Ph.D. in Biochemistry from the Geisel School of Medicine at Dartmouth College.

Ryan Nolan, Ph.D.
VP, Preclinical Development

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Ryan has 13 years of experience in the pharmaceutical industry across various large and small companies including Wyeth, Pfizer, Momenta, and Takeda. He has had numerous roles providing diverse experience, including bioprocess engineer, systems pharmacologist, and head of modeling and simulation groups. He has contributed directly to numerous drug discovery and development programs in multiple therapeutic areas, most extensively in rare diseases and oncology. He has a Ph.D. in Chemical Engineering from Tufts University and a Bachelor's in Biomedical Engineering from Johns Hopkins University. Ryan has published several peer-reviewed articles, a book chapter, and three patents.

Kaitlyn Gayvert, Ph.D.
Director, Informatics

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Katie is a computational biologist with experience in using informatics and machine learning techniques to tackle drug discovery problems. Katie started working with the Fractal team in 2016, where she has designed and built bioinformatics and analytics platforms to support drug development efforts. While there, she has also driven forward R&D projects that leverage evolutionary concepts in infectious diseases and oncology. Prior to joining Fractal, Katie worked as a bioinformatics lead on a number of cross-disciplinary academic-pharma collaborations while finishing up her doctoral dissertation. She has been co-author on a dozen peer-reviewed articles and was recognized on the 2016 Forbes 30 under 30 in healthcare list. Katie has a Ph.D. in Computational Biology and Medicine from Weill Medical College of Cornell University.

Christine Carcillo, Ph.D.
Senior Engineer II, Modeling

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Christine applies engineering principles to find practical, efficient solutions for problems in the pharmaceutical industry. Christine has been working with Fractal since 2017, managing and implementing preclinical and clinical PK/PD modeling projects. Christine has a Ph.D. in Chemical Engineering from the University of Pittsburgh.

Uyen Tran
Senior Engineer I

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Uyen has a broad skill set that spans biomedical engineering, PK/PD modeling, and software engineering. She has been working with the Fractal team since 2016, using her experience to tackle a variety of different projects, such as developing systems models to predict the effects of nanoparticle formulation on the pharmacokinetics and pharmacodynamics of drugs, creating a computational platform for high-content imaging analysis, and developing software for diagnostics medical prototypes. Uyen has a B.S. degree in Biomedical Engineering and a minor in Applied Mathematics from the University of Washington.

Madison S.
Principal Scientist, Modeling

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Madison has been working on PK/PD modeling and R&D projects with the Fractal team since 2015. Their work has focused on implementing PK/PD and systems models to support translational preclinical study design and data analysis. They have a particular interest in drug delivery across the blood brain barrier and the rational development of treatments for diseases of the CNS. Madison completed their B.S. in Biological Engineering at MIT.

Lin Yuan
Senior Engineer I

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Lin has been working with Fractal since 2016. Her modeling expertise is diverse and includes projects in process chemistry, computational fluid dynamics, metabolic biochemistry, and PK/PD. Lin received a B.S. in Chemical Engineering and Technology from China University of Petroleum in Beijing and a M.S. in Chemical Engineering from Florida State University.

Nenad Grmusa
CFO of Global R&D at Takeda Pharmaceuticals

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Nenad Grmusa is the Chief Financial Officer of Global R&D at Takeda Pharmaceuticals. With 20 years of experience in biotech as well as large pharma, Nenad is a highly experienced senior executive with deep knowledge of the financial needs of drug development organizations.

Bruce Zetter, Ph.D.
Charles Nowiszewski Professor of Cancer Biology at Harvard Medical School

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Bruce is the Charles Nowiszewski Professor of Cancer Biology at Harvard Medical School and currently conducts research at Boston Children’s Hospital, where he has served in leadership positions as Vice President of Research and Chief Scientific Officer. Bruce is highly regarded as an international leader in cancer research and as an advisor to the biotechnology and pharmaceutical industry. He has devoted his scientific career to studying how cancer evolves, spreads and causes patient harm. His academic work has revealed new biomarkers to predict cancer outcome and new treatments for late-stage cancers. Bruce is an esteemed advisor on science and business practice to industry executives and scientists. He has served as consultant or advisory board member to more than 30 biotechnology and pharmaceutical companies and additionally serves as an advisor to venture firms and investment firms. He is often called on as an expert witness in court cases involving healthcare, patents, and research asset losses. He has published more than 150 research papers and given over 300 talks at universities, conferences, and businesses. He has testified as an expert witness for the United States Senate Cancer Coalition hearings in Washington and accompanied a congressional delegation to examine biotechnology in Cuba. Prior to his work at Harvard, Bruce received a B.A. degree in Anthropology from Brandeis University and a Ph.D. from the University of Rhode Island in Kingston, RI. He completed fellowships at MIT and at the Salk Institute.

John Tagliamonte
Entrepreneur-in-Residence at MassBio

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John is a committed, tenacious serial entrepreneur driven to build value through planning and execution of growth strategies for companies from seed to commercial-stage. John has Business Operations and Corporate Development expertise in building and growing Pharmaceutical and Health Science businesses through strategy formation, business development, corporate partnering, financing, and global commercial leadership. With over 20 years of executive leadership positions with Fortune 50, small cap and venture-backed startups ranging from J&J to WntRx, John has significant experience in scientific research, clinical development, regulatory, market access, and pricing/reimbursement. He has co-led > $50M in venture and private financing over the period of 2009-2017 and has made partnering and business development deals of over $3B across more than 50 transactions.

Dione Kobayashi, Ph.D.
President at AkeOla

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Dione is an experienced drug developer and company creator focused on rare diseases and patient need. Dione has engaged in raising $69.5M in seed, Series A or Fund capital. Dione has over 20 years of drug development experience with Genentech, Elan, Rinat/Pfizer, the Spinal Muscular Atrophy Foundation, Alector, and Cydan Development. Dione has had advisory and consulting roles in several programs in the neuroscience, ocular, and rare disease space spanning multiple therapeutic modalities. She is a scientific advisor and/or board member to The Bluefield Project to Cure Frontotemporal Dementia, CureCMD, the Muscular Dystrophy Association Venture Philanthropy committee, RDMD and Myonexus Therapeutics. Dione is the co-founder of Eperia and Imara, and founder and President of AkeOla. Dione received a B.S. in Brain and Cognitive Sciences from MIT, an M.S. from the University of Hawaii at Manoa, and a Ph.D. in Neuroscience from the University of Edinburgh.

Barbara Hibner, Ph.D.
CEO of PercepTx

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Barbara brings 25 years of leadership experience in pharma and biotech to bear on new drug discovery. During her time at Bayer, she helped create a new oncology department and served as project leader for sorafenib, now approved for kidney and liver cancers. Successive leadership positions at Chiron and Millennium Pharmaceuticals consolidated a very broad-based expertise in advancing large and small molecule projects to and through clinical trials. Barb has deep experience on clinical development teams and a solid understanding of what it takes to get a drug approved. Over her career, Barb has built and mentored a host of teams, from large departments to small specialty groups. Her most recent responsibilities at Takeda included building a cross country ADC team, evaluating the latest technologies and leading alliance management collaborations to get novel ADCs into the clinic.

Donavon McConn, Ph.D.
Head of External DMPK Collaboration at Takeda

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Donavon is a classically-trained enzyme and pharmacokineticist, with an expertise that has grown to encompass in vitro and in vivo drug metabolism, drug interactions, transporters, translational research, PK-PD and PB-PK modeling. He has held positions of increasing responsibility throughout his career that has spanned early discovery to post-marketing phases of development. Moreover, he has led or been a part of teams that have transitioned >20 assets into clinical trials, many which included innovative modeling-based paradigms. Donavon is currently pioneering a role in External Research and New Ventures for Takeda. He works with Takeda’s academic, biotech and consortium partners to facilitate new company formation or internal acquisition of novel projects, platforms and assets. Donavon did his undergraduate training in Physiology and Biochemistry at UC Davis, and subsequent Ph.D. in Pharmaceutics at the University of Washington.

Joseph Singh
Senior Advisor and Managing Director at ROSC Global Investments

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Joe has more than 20 years of international experience in large financial and multi-national institutions, with tours of duty in the buy-side, sell side, asset management and private equity lines of business. He has held leadership roles at Bankers Trust, JP Morgan, and IBM / PwC. At JP Morgan, Joe was a financial controller, quantitative strategist, institutional investment product manager, and later product development manager for the launch of a number of LabMorgan’s portfolio companies. At IBM’s Global Business Services – the strategy consulting arm — Joe led engagements at the Corporate Investment Bank of Wachovia / Wells Fargo, the Wealth Management and Prime Brokerage units of Morgan Stanley and had relationship oversight for UBS, Credit Suisse and Merrill Lynch Investment Managers (MLIM). Throughout his career, Joe has been active on a number of for-profit and non-profit boards. Joe holds Bachelors and Masters Degrees in Operations Research from Columbia University. He also holds an Undergraduate Degree in Chemistry from Adelphi University, and has served as an Executive / Entrepreneur in Residence at MIT Sloan and at Harvard Business School.

Peter Marschel
Co-founder and Advisor

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Peter is a seasoned financial leader and pharmaceutical professional with 20+ years of experience driving effective decision making and financial management in a range of industries and situations. During his time in the corporate development group at Merck, he supported senior management via financial and commercial analytics in the negotiation of high-value licensing, M&A, and spin-out transactions. Following Merck, he helped distressed private equity owned businesses return to health through disciplined operational finance and liquidity management practices at CRG Partners, a leading financial advisory and turnaround management firm (since acquired by Deloitte). He has also led revenue forecasting and market analytics for a $1B+ pharmaceutical franchise at Vertex Pharmaceuticals and built a Decision Science practice at Takeda Pharmaceuticals. He holds a B.S. in Applied Physics from Columbia University, an M.S. in Biomedical Engineering from the University of California, San Diego, and an MBA from the Tepper School of Business at Carnegie Mellon.

Doug White, Ph.D.
Co-founder and Advisor

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Doug brings a broad, multidisciplinary skill set to bear on problems at the intersection of computation and biology. During his time at Takeda Pharmaceuticals, Doug ran a number of teams focused on custom multidisciplinary engineering approaches in various problem domains. These experiences have ingrained in Doug a passion for finding simple, effective solutions to complex problems. Doug has a B.S. in Bioengineering from the University of Washington and did his Ph.D. in Biomedical Engineering at Georgia Tech.

Diane Joseph-McCarthy, Ph.D.
SVP, Discovery & Early Dev, EnBiotix

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Diane has over 20 years of drug discovery and leadership experience in the pharmaceutical and biotechnology sector. She is currently Senior Vice President of Discovery & Early Development at EnBiotix. Before joining EnBiotix, she was an Associate Director in the Infection iMED at AstraZeneca, where she led an innovative group of scientists as well as a global team in Predictive Science. Prior to that she was at Wyeth where she held positions of increasing responsibility. She has been actively involved in the discovery of several compounds that have reached clinical trials. Diane received her Ph.D. from MIT and was a postdoctoral fellow at Harvard University and Harvard Medical School. She has more than 70 publications/patents and has given numerous invited talks. She also has served as a member of the National Academy of Sciences Polio Antiviral Advisory Committee.

Tad Stewart
CEO of Commense, Inc.

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Tad has worked in the biopharmaceutical industry for over 20 years, most recently serving as President and CEO of Commense, Inc., a company focused on developing pediatric immunomodulators based on manipulating the microbiome. Prior to Commense, Tad served as Chief Business Officer for Crescendo Biologics and, before that, he spent over fifteen years at Merrimack Pharmaceuticals. During his time at Merrimack, Tad served in various roles as part of the executive leadership team, including leading the company’s Business Development efforts and heading the company’s Commercial Business Unit. Tad’s experience spans the growth of the company from a pre-clinical organization to a clinical development company and, ultimately, to a commercial enterprise, including the successful launch of a marketed oncology product (ONIVYDE®) and the execution of several strategic transactions (including strategic partnerships, in-/out-licensing and M&A) that supported the long-term growth of the company.

Prior to Merrimack, Tad worked as a consultant with clients across the biotech, pharmaceutical and medical device industries. Tad holds an MBA from the Johnson School at Cornell University and a B.S. in Biology from Bates College.

Diane Pohl, RN HN-BC
President at Aegean

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Diane brings 20 years of drug development experience across Clinical Operations, Pharmacovigilance and Clinical Science with Roche/Genentech, Novartis, and Baxter/Baxalta - including consulting roles with Celgene, and Takeda. Diane has worked across therapeutic areas, including hematology, neurology, rare diseases, oncology and vaccines. An RN with a B.A. in Psychology from the University of Delaware, Diane is passionate about innovation, sustainability, and global access to health and wellness.

Michael E. Placke, Ph.D., DABT
Head of Drug Discovery, Shire Pharmaceuticals

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Michael is an experienced and seasoned pharmaceutical drug development executive with over 35 years of pharmaceutical industry experience, including scientific and operational responsibilities for multi-disciplinary pharmaceutical research and development operations. He is currently serving as Head of Drug Discovery for Shire Pharmaceuticals, a role that includes Global Head of Nonclinical Development and Head of US Discovery Research. Previously Michael has held positions as Senior Vice President of Drug Safety and Metabolism at Alnylam Pharmaceuticals, President & CEO of Ricerca Biosciences, VP of Drug Safety at Wyeth Pharmaceuticals (and Pfizer post acquisition), and VP of R&D of a private equity/venture-funded start-up firm developing novel respiratory drug therapies. He has scientific and executive-level operational experience in developing a wide array of drug product modalities including small molecules, biologics, gene therapy, siRNA therapies, vaccines, and specialty drug products. He has led multiple organizations with operating budgets of $40 - 50M and over 300 staff. Michael has a record of accomplishments in research and development of advancing drugs from late discovery through market registration. He has advanced leadership skills and expertise in scientific assessment of new pharmaceutical therapies and technologies. He is formally trained in experimental pathology and toxicology, earning B.S. and M.S. degrees from The Ohio State University and his Ph.D. from the University of Connecticut. He is board certified in general toxicology, and a former director and officer of the American Board of Toxicology.

Working with us

We engage with partners in the co-development of novel preclinical or clinical assets discovered or in-licensed by us. Sponsored research agreements are our primary business model, focused around a pipeline of candidate assets, and an efficient preclinical development path aimed at yielding one or more Investigational New Drug applications (INDs) in a short period of time.

Our approach begins with high-throughput asset sourcing and creation, coupled with focused critical-path experiments and modeling analyses. This allows us to focus on the projected therapeutic index of candidate drugs, which defines their potential. At every step along the way, our platforms allow us to precisely and quickly answer critical-path questions on the road to approval.

Our lean, fit-for-purpose approach to integrating modeling and informatics with pharmacology enables us to create value for our partners in an extremely resource-efficient manner.

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Our approach to science

Follow the data


We believe that it is more important to get it right, than to be right. Our approach is agnostic to theory and committed to experimental (especially clinical) data.

When the facts change, we change our minds.


We emphasize the use of mathematical modeling in every step of the drug discovery and development process.

Focused models aimed at answering specific scientific questions provide a faster (and more rigorous) path through drug discovery and development.


We believe that the best way to succeed in business is to question our competitor’s wisdom, not endorse it.

Popularly held beliefs in science can often be wrong.

Questioning conventional wisdom stimulates innovation, while at the same time providing opportunities for differentiation.

Our philosophy

Agnostic and results-driven

Bang for buck

Doing more with less is essential to quickly build sustainable, profitable businesses.

We take a lean approach, prioritizing the essentials and avoiding costly inefficiencies. We get the most out of every dollar by focusing on the critical path for execution, building lightweight but effective processes, and creating a disciplined, results-oriented culture within our teams.

Software driven

At Fractal, we believe in the value of software both as a scientific and as a business tool.

On the scientific side, modeling and simulation serve as a valuable prototyping tool while informatics and statistics serve as critical instruments to more deeply understand results. On the business side, we rely on software-driven processes to keep simple things simple and make difficult things possible. A software-driven operations game is just tighter.

No tunnel vision

Applying consistent decision criteria in advancing drug molecules is easier said than done.

Limited pipeline sizes and timeline pressures can lead to tunnel vision, and project teams (and companies) are often cornered into trying to force the ‘right’ answers in the pursuit of superficial performance metrics. Pursuing a large and diversified portfolio lets us stay agnostic to the outcome for any given project.

Our tactics

Thinking like engineers

Ground up redesign

Best practices can be a powerful tool in the right context, but too often they are used to reinforce outdated legacy approaches.

Sometimes, the best way to design an efficient process is to do what makes sense and avoid the ‘best practices’ trap.

We design our processes around the tools and techniques available in the 21st century, and ignore the way ‘things have always been done’.

Simplest solution

For every question, we focus on the simplest effective answer.

Our belief is that it’s not difficult to find a complicated answer to a simple question. Doing the opposite- finding a simple answer to a complex question- represents insight.


We believe that good ideas are cheap, so killing them should be cheap too.

We use modeling and simulation as a design and strategy tool to pressure test ideas.

Approaching drug discovery and development from a mindset of abundance lets us take a clinically detached approach to our projects.

Our approach to drug development

Focus on the stuff that matters

Therapeutic window

Sadly, even in the modern era, the potential of many cancer (and infectious disease) drugs is limited by toxicity. Companies have historically wasted substantial capital investing in molecules that lack a therapeutic window (doses that are both therapeutic and acceptably non-toxic).

We are able to efficiently assess the therapeutic window, and rely on it substantially in our go/no-go decisions.

Critical path

Every program has a core of irreducible scientific risk.

By pursuing a critical-path approach, we are able to focus our investments on those questions that address this risk, thus enabling rapid go or no-go decisions and efficient use of capital.

Diversified risk

We believe that the best defense against being wrong is to be wrong cheaply. Because no amount of preclinical biology can predict clinical success, we focus on reducing the expense and time needed to arrive at the pivotal clinical experiments.

Given this mindset, it follows logically that a broad pipeline and rigorous decision criteria are the best insurance against scientific risk.

The occasional contrarian: a closer look at common beliefs in pharma R&D

Where does innovation come from?

By Katie Gayvert

Often times we hear that the majority of successful drugs originated from the NIH or in academic labs. In 2016 alone, universities took in $2.96 billion from patent licensing, with about $2 billion of that coming from royalties. Individual universities have taken home major windfalls for selling off royalty rights to drugs, such as Emory’s Emtriva ($525 million) and UCLA’s Xtandi ($1.14 billion).

We decided to take a systematic look at the origins of successful drugs ourselves to see what the data says. According to the FDA’s Orange Book, only about 5% of approved drugs can trace the origins back to public sector research institutions (PSRIs). However upon closer look, a number of notable cases seem to be missing. This includes older oncology discoveries, such as vorinostat (Sloan Kettering and Columbia), valrubicin (Dana Farber) and pemetrexed (Princeton). Also missing are most drugs discovered at academic institutions outside of the US, such as the antivirals discovered at the Czech Academy of Sciences. The Orange Book is further limited to only small molecules due to the nature of its purpose (therapeutic equivalents for generics). Its equivalent for biologics, the Purple Book, lacks information about patents due to the more complicated legal landscape around biosimilars. As a result, these numbers do not include other significant university contributions like the Weizmann Institute’s therapeutic monoclonal antibody discoveries.

To better understand the sources of innovation in drug discovery, we looked to a 2010 paper in Nature Reviews Drug Discovery, which reviewed all new drugs approved between 1998 and 2007. This tells a somewhat different story. When looking at the 252 drugs approved during this period of time, 25% had some level of university involvement in the discovery. About 40 of these were solo university discoveries (15%), while another 20 were co-discovered with either biotech or pharma companies. This suggests that while universities are not by any means the main contributors to innovation, they do in fact play a significant role. This is particularly pronounced in fields like oncology, where academic labs can claim full credit for 32% of small molecules and 40% of biologics.

So how did these get missed? The M&A nature of the pharma industry may have caused some of these contributions to slip through the cracks. A good example of this is with vorinostat (SAHA), the first FDA approved histone deacetylase inhibitor which was approved for cutaneous T cell lymphoma in 2006. SAHA was discovered and initially developed in the labs of Sloan Kettering and Columbia back in the 1970s. In 2001, two of those discoverers founded Aton Pharma and licensed SAHA from Sloan Kettering for the purposes of its development and commercialization. In 2004, while SAHA was still in Phase II trials, Aton was acquired by Merck. Yet while Sloan Kettering is the undisputed discoverer of SAHA, all nine patents listed in the Orange Book are held exclusively by Merck.

Pharma's outsourcing of innovation is even more pronounced when looking at biologics. While biotech appeared to be a driver in biologics, the larger pharma companies were slower to catch on to this new type of therapeutics. The only internal R&D "success" in oncology over this period of time was Mylotarg, which had to be pulled from the market for both safety and efficacy reasons in 2010 and was only recently re-approved with a different dose, schedule and target population after intervention from the FDA. The remainder of pharma’s current oncology biologics come from either universities or through later acquisition of biotech companies, such as Roche and Genentech.

These numbers tell us that while the bulk of new discoveries do still originate in the industry (85%), academia does in fact play an important role in drug discovery. These contributions are more pronounced when looking at fields like oncology and assets like biologics. This may be because orphan diseases are less likely to attract the attention of industry due to its lower theoretical market potential. In these cases, universities appear to be playing an important role of de-risking assets by generating preclinical data and identifying assets that are most likely to succeed, which are then picked up by industry and can be fast-tracked for development.

Does academic prestige matter?

By Katie Gayvert

Our previous post described how university discovered drugs have been an important source of innovation. A natural follow-up to that question is to ask what types of universities are making these contributions. A reasonable guess would be that prestigious institutions are the major players. But what makes an institution prestigious? Looking at “glamour” factors like name recognition brings to mind institutions like MIT, Harvard, and Sloan-Kettering. But we also know from experience that there are many less glamorous but highly innovative universities that have been just as impactful.

A more valuable way to define prestige is to base it on the level of innovation. Formal rankings of innovative universities have been put together by groups like Nature and Reuters, considering factors like patent productivity, industry collaborations in peer-reviewed journals, and citations. As expected, we see big names like MIT (Reuters: 2, Nature: 3) and Harvard (Reuters: 3, Nature: 33) towards the top of those lists. However, we also see names like the University of Texas (Reuters: 6, Nature: 5) and the University of Wisconsin (Reuters: 25, Nature: 36). Unsurprisingly, these innovative universities tend to take on the vast majority of NIH funding. This suggests that it is presumed that these universities are more likely to make significant contributions to the healthcare field, which includes drug discovery.

We looked to see if these “prestigious” institutions do in fact dominate drug discovery. To do so, we considered the top 100 most innovative institutions according to the Reuters and Nature rankings. Since the level of NIH funding corresponded closely with innovation rankings, we also considered the top 100 institutions with the highest amount of NIH funding. This allowed us to include important non-university public sector research institutions (PSRIs) like Sloan Kettering and Dana Farber. We compared these lists to the universities that were attributed with discoveries of FDA approved drugs in the Nature Reviews Drug Discovery paper that was discussed in the previous blog post.

When looking at drugs that were “co-discovered” with industry, some of the same big names popped up repeatedly. Institutions like Harvard and the NIH have had several collaborations lead to FDA approved drugs. This track record of success highlights the value of academic-industry collaborations.

However, it turns out that independent drug discovery in academia is not dominated by a few major players, but instead is spread out across many innovative institutions. This trend is particularly pronounced in oncology, where only Sloan-Kettering and the Czech Academy of Sciences are reported to have more than one drug originating out of their labs without any ties to industry. Notably missing are “glamorous” names like MGH and the NIH. On the other hand, less flashy names like Indiana University, Tulane University, and Boston University each lay full claim to an FDA approved oncology therapy. This is even more notable in the field of infectious diseases, where you can find game-changing, university-discovered drugs like Emory’s emtricitabine, which is included by the WHO on its List of Essential Medicines.

So to return to the original question: does academic prestige matter? It turns out, it all comes down to how you define prestige. While there have been a handful of high-profile discoveries by glamorous names (generally in collaboration with industry), the majority of academic-driven discoveries are taking place at less flashy but still highly innovative institutions.

A closer look at a famous lab

By Katie Gayvert

The first two posts in this series discussed cases where university-discovered assets were licensed and developed by biotech or pharma. But what about labs that create spin-off startups to develop drugs themselves?

When looking through the 40 or so approved university-discovered drugs discussed in the previous posts, we were only been able to track down a handful of successful examples. There was Sloan Kettering and vorinostat, which took about four decades to go from discovery to approval. Other successes include basiliximab (Mt. Sinai), enfuvirtide (Duke), and verteporfin (University of British Columbia).

To look a little more deeply into this, we looked at a famous lab at a highly prestigious university (anonymized here). This lab has created over 30 companies over the past three decades, including 15 drug development focused companies. 5 of the drug companies have been sold off through either M&A or bankruptcy, while the other 10 are still active.

Out of the 5 companies that are no longer active, 4 have had all investment and acquisition deal terms disclosed. Two were moderately successful and the other two were at a loss. These successes generated only mediocre internal rate of returns (IRRs) (20 – 30%) - or when pooled together with the failures yields a modest IRR of 9.227%. In comparison, venture capitalists and private equity firms look to generate an IRR around 20-30% for their portfolios.

Meanwhile, the active companies have over the past fifteen years raised about $1.5 billion in VC funding and another $750 million through IPOs. Through this, they have produced one FDA approved novel drug and two approved generics, along with another 20 or so drugs still in clinical trials. The approval occurred 9 years after the founding of the company. In comparison, current industry estimates for each approved drug are currently $1.385 billion in out of pocket expenses (plus more in opportunity costs) and a development time of about 12 years. So these active drug companies are performing at roughly the industry averages in terms of cost and efficiency.

Altogether these results are moderately successful, but not exceptional. This is not to say that these types of approaches are not valuable. Both sold off and active companies look better when viewed as a portfolio, instead of as individual companies or assets.

Contact Fractal to learn more.