Traditional rivals Monash and Melbourne Universities are collaborating to create a new company that will market and sell medicines developed by the institutions to pharmaceutical companies, reinvesting any profit into research.
Both universities are putting A$22.5 million towards the venture and the Victorian State Government is kicking in an additional A$10 million to get the business off the ground. The company will eventually register as a charity and search for further philanthropic funding to develop medicines to treat everything from cancers to immune disorders.
The enterprise, unofficially named M2 Venture Catalyst, will be independently managed by a board and will bring together research and commercialisation skills to better market discoveries from the more than 8,000 researchers who work at both institutions.
The venture hopes to address one of the biggest challenges facing researchers, getting the due diligence and trials needed to impress big pharmaceutical companies into investing, says Doron Ben-Meir, executive director of research, innovation and commercialisation at the University of Melbourne.
“It’s a high risk activity, it’s very hard to make money. Investors wait until they have an established team and a clear proposition, some good evidence and data for a commercialisation pathway.”
There aren’t enough people in Australia with the experience of taking drug candidates and turning them into viable investments, he says.
“ We have a mismatch in terms of the volume of research outputs we generate and the number of people with the skills and experience to effectively translate those outputs into investment opportunities.”
The intellectual property developed by M2 Venture Catalyst will be available to be licensed to pharmaceutical companies or bought outright. There will also be opportunities for spin-off companies from the venture.
The collaboration is in line with the Coalition’s National Innovation and Science Agenda, although Ben-Meir says it wasn’t created with this in mind.
Although there is potential risk of Australian research and intellectual property being owned by overseas companies, he says the benefits to Australia will be in the development process which will generate more jobs locally.
“A lot more is happening, other than the ultimate ownership of the IP because we’re building an industry that systematically generates the IP, that activity itself generates jobs, it generates further wealth and medical outcomes in Australia.”
He says the venture expected to become a sustainable business within 10 years.
When asked why now for the collaboration between two of the biggest and competitive universities in Australia, Ben-Meir says it makes common sense.
“We’re getting into commercialising in a global marketplace and at that level it is so much more sensible to join forces to compete rather than compete with each other.”
Ben-Meir says if the research of both Monash and Melbourne Universities were combined, it would put them among the top five universities in the world.
History of commercialisation of research
This is not the first time Australian universities have employed separate institutions to try to commercialise research. Other examples include UniQuest, at the University of Queensland and UniSeed, a collaboration between a number of universities.
However these models are not usually commercially successful, neither are the returns from these businesses investment grade, explains Beth Webster from the Centre for Transformative Innovation at Swinburne.
“There’s only very few in the world that make a lot of money and they tend to be in North America.”
The models that are successful include Harvard University’s Blavatnik Acceleratorwhich also creates biomedicial products.
Other countries like Israel have tried making laws that govern the intellectual property from these types of collaborations “sticky”, that is staying in its country of origin, but this can also be a deterrent to investment. Webster says it’s not all about profit when it comes to these types of models.
“If you see one of the roles of the tertiary sector or university sector as improving the well-being of people that justifies it being a function that doesn’t necessarily cover its costs.”
It’s important that ventures like M2 Venture Catalyst are scientifically evaluated so other universities can learn from its successes and replicate them, Webster says.
“There are too many initiatives we have that don’t get evaluated, they get killed because no one knows whether they’re any good or not. So we don’t know whether we’re killing off the good stuff, I suspect often we are.”
M2 Venture Catalyst will be incorporated in July 2016 and fully operational by the beginning of 2017.
This article originally appeared on The Conversation.