The National Institutes of Health (NIH): Fueling Healthcare Innovation in California · 2017. 3. 13. · The National Institutes of Health: Fueling Healthcare Innovation In California

The National Institutes of Health (NIH): Fueling Healthcare Innovation in California

Contents

01 Executive Summary

03 Introduction: Innovative Research in California

07 Technology Transfer

17 Funding the Seeds of Scientific Excellence

21 California NIH-Funded Research Achievements

31 Impacts of Cuts in NIH Funding

38 Call to Action for California’s Continued Scientific Excellence

40 Methodology and Sources

1The National Institutes of Health: Fueling Healthcare Innovation In California

Executive Summary

Academic Research in California

California’s academic research institutions lead the world in investigating potential cures for hundreds of diseases that affect billions of people. Researchers in the state have made countless breakthrough discoveries that have increased the body of scien-tific knowledge, advanced medical practice, and led to the development of new and improved therapies, devices and diagnostics to prevent and cure human diseases. Their labs attract the most promising science, engineering and medical students, furthering the future of medical science and extending California’s leadership in educa-tion, as well as research.

The discoveries and inventions by academic researchers naturally attract attention from the commercial sector. Following the principles established by the Bayh-Dole Act of 1980, federally funded academic institutions transfer their technologies to commer-cial companies that, in turn, conduct the applied research and development needed to transform basic science into new therapies, treatments and technologies that will address unmet medical needs and improve public health. Licensing agreements with California’s academic research centers fuel much of the innovation for the state’s biotechnology, pharmaceutical, medical device, drug delivery, diagnostics and genomics companies. Thus, academic research creates opportunities for the state’s graduates to work and live in California even as it helps drive the state’s economy.

Academic Research and the National Institutes of Health

Basic research expands fundamental scientific knowledge and understanding that provides the essential foundation upon which the development of innovative therapies and devices may be based. Funding for such important and unconstrained research comes from philanthropic support and government grants. Since the 1950s, academic research institutions across the country have looked to the National Institutes of Health (NIH)—the primary federal agency for supporting biomedical research—for the funding they need to pursue important problems in basic research.

In the past, legislators have been committed to funding biomedical research and the benefits it yields to patients, researchers, institutions, local economies and the nation’s standing as a biomedical leader. Between fiscal years 1998 and 2003, the NIH budget more than doubled, reaching $27.1 billion in fiscal year 2003.

California researchers have consistently been awarded the largest share of NIH funding. In 2007, for example, the NIH awarded California institutions 7,357 grants totalling $3.16 billion—the greatest amount of funding allocated to any state. California’s share was 41 percent more than the second largest recipient, Massachusetts, which received $2.23 billion. As the top NIH funding recipient, California received 15 percent of total NIH funds distributed nationwide in fiscal year 2007.

NIH Funding Under Pressure

As the federal budget deficit soars and legislators pare back discretionary spending, the NIH has come under intense pressure. In the first true budgeted reduction in NIH funding since 1970, the 2007 budget represented a 0.1 percent decrease from 2006 (actually a 3.8 percent decrease when adjusted for inflation). President Bush’s budget

2

request for fiscal 2008 called for $28.9 billion, which was $379 million less than the NIH received in 2007. Moreover, because the president’s budget request included a $201 million funding transfer, the actual 2008 research decreased by $581 million.

Federal deficits, along with growth in defense and entitlement spending and a looming recession, severely threaten the prospects for robust NIH funding over the next few years. Consequently, the improvements in research infrastructure and the investigator pool produced by doubling the budget may not allow our nation to realize the full scientific potential made possible by this investment.

According to the 2008 California Healthcare Institute (CHI)/PricewaterhouseCoopers (PwC) NIH Supplement Survey, the competition for peer-reviewed grants is rising, and investigators see their proposals undergo successive rounds of submissions before applications are funded. Meanwhile, the value and duration of awards are decreasing. Furthermore, funding constraints prohibit faculty from maintaining sufficiently staffed laboratories and limit them from hiring qualified younger researchers. Over time, longer, more tenuous proposal cycles will have negative downstream implications for future local workforce development and, ultimately, sustained innovation.

This report provides contextual information showing the relationship between NIH fund-ing and California’s leading role in developing new biomedical technologies that improve patient health, provide new employment for California’s workers, and new opportunities for Calfornia’s businesses. The report features perspectives of California’s biomedi-cal industry and academic leaders who focus on the state’s groundbreaking work and its implications. The report includes articles highlighting technology transfer success stories and innovations that have gone from academic research to commercial success improving public health. Finally, the report illustrates why NIH funding is central to Cali-fornia’s continued global leadership and biomedical innovation. California’s life sciences community needs advocacy for increased NIH funding to drive fundamental scientific discovery and broad-based medical innovation.

The California Healthcare Institute (CHI) and PricewaterhouseCoopers (PwC) created this benchmark report, which is a supplement to the 2008 California Biomedical Industry Report, in order to quantify ways that funding from the NIH drives healthcare innovation in the state of California. This benchmark report draws on economic research and the 2008 California Healthcare Institute (CHI)/PricewaterhouseCoopers (PwC) NIH Supple-ment Survey and discusses key facets related to NIH funding at prominent California educational institutions. The economic analysis provides trends related to NIH fund-ing. The survey results synthesize insights from more than 450 basic research faculty members across the state relating to NIH funding and how it drives innovation.1

1 See the Methodology section at the end of this report for more information on the survey and methodology for the economic analysis.


Introduction: Innovative Research in California

California’s academic research institutions lead the world in discoveries yielding lifesaving therapies, diagnostic tools, drug delivery systems and medical devices— and cures for hundreds of diseases that affect billions of people.

The state is home to a community of more than 100 leading academic research centers. Dozens of scientists from these centers have earned Nobel prizes for discoveries that have illuminated the way for entirely new ways of thinking and new scientific disciplines. Given the caliber of their faculties, the Golden State’s research centers provide unparalleled learning environments for young researchers—scientists, engineers, mathematicians and physicians.

California leads the nation in grant funding and commercial licensing agreements. The technologies developed within the state’s campuses become platforms for innovative biotechnology, medical device and pharmaceutical companies. Through commercializa-tion, breakthrough ideas become leading-edge therapeutics available to the patients who desperately need them.

Figure 1: Top 15 states for earned doctorates in biological sciencefiscal year 2005

California

New York

Texas

Massachusetts

Illinois

Pennsylvania

North Carolina

Ohio

Maryland

Michigan

Connecticut

Florida

Georgia

Missouri

Wisconsin

604

454

419

217

183

162

152

147

0 100 200 300 400 500 600 700 800

141

133

290

275

269

232

741

Source: National Science Foundation/Division of Science Resources Statistics, Survey of Earned Doctorates, 2005.

California institutions in 2005 granted 741 life sciences doctorates, more than any other state.2 Life sciences students pursue their advanced degrees in California because of the state’s quality university system, the availability of funding and post-graduation opportunities.

“[California] offers the most

collaborative, cooperative

environment I’ve ever worked

in, with endless intellectual

and business resources. The

people are very generous and

interactive. There is no better

place in the world to build a

business…”

— Michael Merzenich, Ph.D.

Francis Sooy Professor in the

Keck Center for Integrative

Neurosciences at the University

of California at San Francisco

2 The latest earned doctorates survey from the National Science Foundation (NSF) uses data from 2005

44

University of California, Davis

Breast CT: A New Alternative to Mammography

Computed tomography (CT) is used extensively to identify tumors and other abnormali-ties in the brain, abdomen and pelvis. In contrast to medical X-rays, which produce a single layer 2-D image, a CT scan records hundreds of images of multiple tissue layers and assembles them into a 3-D representation. A team working at University of California Davis Cancer Center has developed a breast CT device they believe provides a more comfortable and potentially more sensitive alternative to X-ray based mammography to detect breast cancer.

The breast CT device, currently in a Phase II investigational trial, is the invention of Drs. John Boone, professor of radiology at UC-Davis, and Thomas R. Nelson, professor of radiology at University of California, San Diego. CT has not typically been applied to breast cancer detection because of concerns over the radiation dose required. The inven-tors solved this problem by designing a CT device that scans each breast while the patient lies face down on a special table. The radiation exposure in the breast is equivalent to that of a traditional mammogram, and the thoracic cavity is not irradiated at all, as it would be in a conventional CT scanner.

The first 21 patients in the ongoing clinical trial reported that the CT breast scan, which does not require breast compression, caused them less discomfort than mammography. The CT detected 19 of the 21 tumors initially identified by mammography, and Dr. Karen Lindfors, Department of Radiology, University of California Davis Medical Center, believes the prototype machine and method of scanning can be modified to improve this detec-tion rate. Once the Phase II trial is complete, a trial directly comparing breast CT and mammography will be the next step in moving the technology forward.

Source: The Better World Project by the Association of University Technology Managers, 2007


Dr. Michael Merzenich, Francis Sooy Professor in the Keck Center for Integrative Neurosciences at the Univer-sity of California at San Francisco (UCSF), was honored by election into the National Academy of Sciences. He has been awarded the Ipsen Prize, Zülch Prize of the Max-Planck Institute, Thomas Alva Edison Patent Award, the Purkinje Medal and Karl Spencer Lashley Award.

Dr. Merzenich earned his doctorate in physiology at Johns Hopkins Medical School and conducted post-doctoral studies at the University of Wisconsin. He later joined the faculty at UCSF as the only basic scientist in the clinical otolaryngology department.

His first group of patents, licensed to Advanced Bion-ics, led to the commercial development of the cochlear implant, a U.S. Food & Drug Administration (FDA)-approved medical device that has restored useful hearing to many thousands of deaf patients.

Additional patents led to the formation of Scientific Learning Corporation, a $40 million software company in Oakland, California that develops software to acceler-ate learning in language- and learning-impaired children. His latest company, Neuroscience Solutions, is using his understanding of the brain processes underlying memory, cognition and movement control to build reme-dial training tools for patients with Alzheimer’s disease and Parkinson’s disease. His story illustrates how basic research findings can make profound differences in people’s lives.

On the cochlear implant

While training as an integrated neural scientist, I became inter-ested in the origins of the brain and how it behaves. I sought to understand how the sensory systems are organized, which can account for behavioral capacity of brains and how remodelling occurs when the brain learns.

The first practical question I asked was, “How is sound encoded in the inner ear?” The answer led to the develop-ment of a prosthetic device that provides substituted hearing by directly stimulating the auditory nerve in the inner ear. This fundamental research ultimately led to the development of the cochlear implant.

When a person goes deaf, fibers of the inner ear survive, at least in some numbers. The reason deafness occurs is that the sensory organ itself dies. The cochlear implant bypasses that

normal sensory apparatus and directly shocks the nerve of the inner ear. It works to simulate activities that encode sounds, such as sounds of oral speech in the normal ear. In some cases, these implants have achieved 95 percent efficacy in restoring hearing.

On scientific learning

In the 1980s, we noticed a change occurring in people who were using the cochlear implant. Initially, the hearing was quite degraded, so sounds were distorted or unintelligible. After approximately three to seven months with the device, patients reported that sounds were less distorted. This speaks to the achievement of the brain rather than the device. We refer to this as brain plasticity, or the ability to adapt during development or learning.

A good model for studying brain plasticity was the somatosen-sory system. Our investigative team began by training animals and altering their brain functions. We then trained monkeys to make sense of tactile and sensory stimuli. Results showed parallel changes in the brain and responses in neurons of the brain, which seemed to indicate specialization in the brain’s operations and accounted for this improvement. Mainstream neural scientists at that point believed primary plasticity occurred only early in life. However, we now know that the brain remodels itself whenever we develop new skills and abilities.

In 1996 I joined forces with Paula Talla to found Scientific Learning Corporation. She studied the behavioral capac-ity of children who were slow to learn language and prone to dyslexia. Further, she described deficits in the speed of processing in the brains of these individuals. My lab showed that the speed of processing could improve under controlled neurological recovery, so I proposed to her that we develop training programs to help these children.

I generated the training tools in my laboratory, and she created a summer school program to evaluate these children in a controlled research setting. We trained the children during a summer in the early 1990s with a goal to renormalize their language abilities to prepare them for successful reading.

In 2007, we trained our millionth child and are now at about 1.15 million. A great majority of these children have experi-enced substantial improvement in their neurology and behav-ioral capabilities. This truly validates the notion that you can use brain plasticity as a strategy to correct errors in brain function.

Perspective

Michael Merzenich, Ph.D.

6

City of Hope

Intravenous Catheter Design Eliminates Risk of Potentially Dangerous Needlesticks

Healthcare workers who suffer accidental needlestick injuries are at significant risk of contracting life-threatening diseases including hepatitis B, hepatitis C and HIV-AIDS. It has been estimated that 600,000 to 800,000 needlesticks and other sharp injuries occur among healthcare workers every year. Not only do these injuries cause anxiety and concern, the follow-up blood testing that is required is expensive and time-consuming.

To alleviate this problem, Dr. J. Martin Hogan, M.D., of the City of Hope, a leading cancer hospital and biomedical research center in Duarte, Calif., invented an intravenous catheter with safety features that protect healthcare workers from accidental needle-sticks. City of Hope was awarded a U.S. patent for the device in 1992.

The catheter’s inner needle is passively covered as it is withdrawn from the catheter after insertion into a patient’s vein. The device shields the healthcare worker from accidental needlestick injury and potential exposure to blood-borne diseases such as hepatitis and HIV-AIDS.



Technology Transfer

To transform a potentially breakthrough discovery in a research lab into a proven and accessible product that can improve patients’ lives requires significant investments of time and money, as well as specific commer-cialization skill sets. Basic research institutions have neither the expertise nor the capital necessary to develop products, which, in the case of drugs, require nearly $1 billion and 12 to 15 years to travel from bench to bedside.

Bayh-Dole legislation, enacted in 1980, provided a clear pathway, encour-aging academic research institutions to transfer proprietary technologies to the private sector for development. The law created a uniform policy by which universities can elect to retain title to innovations produced in federally funded research programs and collaborate with industry. Technology transfer programs not only greatly accelerate commercialization, they enable not-for-profit institutions engaging in innovative basic research to capitalize on their inventions through business relationships with commercial companies.

The first step in technology transfer is for the university or other research institution to file for patent protection. One can gauge technology transfer activity in California by looking at the annual numbers of life sciences patents granted (Table 1).

Table 1: California life sciences patents fiscal years 2002 to 2006

Patent Class Title 2002 2003 2004 2005 2006 Total

Chemical Apparatus and Process Disinfecting, Deodorizing, Preserving or Sterilizing 109 118 99 101 77 504

Chemistry of Inorganic Compounds 37 33 23 14 27 134

Drug, Bio-Affecting and Body Treating Compositions (includes Class 514) 707 774 612 538 722 3353

Chemistry: Molecular Biology and Microbiology 801 650 539 495 585 3070

Chemistry: Analytical and Immunological Testing 96 84 81 74 63 398

Chemistry: Natural Resins or Derivatives; Peptides or Proteins; Lignins or Reaction Products Thereof 106 99 81 90 167 543

Organic Compounds (includes Classes 532-570) 256 201 187 183 228 1055

Multicellular Living Organisms and Unmodified Parts Thereof and Related Processes 68 55 51 39 56 269

Total 2180 2014 1673 1534 1925 9326

Source: U.S. Patent and Trademark Office, Patenting by Geographic Region, breakout by Technology Class, http://www.uspto.gov/web/offices/ac/ido/oeip/taf/clsstc/regions.htm

“The most interesting thing

about academic research

is that it is very early stage

and very cutting edge. We

are far more likely to be a

source of revolutionary and

disruptive technologies.”

— Katharine Ku

Director of the Office of

Technology Licensing,

Stanford University

8

University of California, Los Angeles

Concentric Medical, Inc.: Saving Stroke Victims

Due to a pair of physicians’ innovation and determination, the removal of potentially fatal blood clots in the brain may one day become standard procedure in hospitals around the world. Concentric Medical, Inc., is doing its part to make the Merci Retriever more effective and more available to stroke victims with no time to spare.

Eighteen-year-old Melissa Welch of California serves as a poster child for the medical intervention that saved her life two years ago. Twenty-year-old Marissa Arnold of Connecti-cut made national television because of the dramatic result achieved by the same clinical device. These young women are just two examples of the thousands who can count them-selves lucky.

The enemy in these situations is stroke. The savior is Concentric Medical, Inc.’s Merci Retriever.

The rate of strokes is rising, and according to the American Stroke Association, it is the leading cause of serious, long-term disability in the United States. Stroke is the third largest cause of death, ranking behind heart disease and all forms of cancer, but it is quickly gaining ground as the number two killer.

Close to 80 percent of the 750,000 strokes that occur each year nationwide are ischemic strokes—that is, caused by the blockage of a blood vessel, usually by a clot that forms else-where then travels to and lodges in a blood vessel in the brain. It would seem that the clot-busting drug, tissue plasminogen activator (t-PA), can occasionally work miracles. However, it is effective only if administered within a critical three-hour window of time following the onset of a stroke. Also controver-sial is t-PA’s increased risk of brain hemorrhage.

While a frustrating situation for clinicians who treat ischemic stroke patients, it inspired a dedicated pair of neuroradiologists to invent a tool that offers patients a greater shot at recovery. Just over 10 years ago, University of California, Los Angeles (UCLA) physicians Pierre Gobin, M.D., and J.P. Wensel, M.D., began designing a device that could travel to the site of a blood clot in the brain and actually remove the clot.

Great strides in this concept had already been achieved with coronary arteries. But there are dramatic differences between the heart and the brain, as Gobin attests. “A blocked coronary

artery is caused by plaques that form there and narrow the vessel,” he explained. “In the brain it’s completely different where in most cases the blockage forms from a clot that travels there from somewhere else in the body. Our idea was that if a clot arrives and lodges in a brain vessel, it could be extracted.”

An Idea Becomes Reality

From concept to successful product, today the Merci Retrieval System is comprised of three key components. After a blood clot in the brain is located by angiography, a clinician inserts the Merci balloon guide catheter through a small incision in the patient’s groin. Under X-ray guidance, the catheter is then maneuvered up to the carotid artery in the patient’s neck, and a guidewire, along with the Merci microcatheter, are deployed through the catheter and into the brain where they are placed just beyond the clot. The third component, the Merci Retriever—a corkscrew-shaped platinum wire—is then deployed to grab and ensnare the clot. After capturing the clot, the clinician inflates the balloon guide catheter to temporarily stop the forward flow of blood while the clot is withdrawn and gently pulled into the catheter and out of the body. Once the balloon is deflated, blood flow is restored through the now open vessel.

The development of the Merci Retrieval System relied on critical support from the UCLA Office of Intellectual Property where Drs. Gobin and Wensel filed a patent on their invention. UCLA invested in the domestic rights and Dr. Gobin, believ-ing strongly enough in the device to share the financial risk inherent in patenting such early stage technology, took over the foreign rights. While searching for the right partners to create a spin-off company, Dr. Gobin remained committed to his mission and succeeded in finding interested investors and obtaining venture capital. In 1999 he launched the company Concentric Medical.

“This was a good example whereby the inventor’s dedication and persistence on the commercial front paid off,” said UCLA Office of Intellectual Property’s Director of Licensing Emily Loughran. “While we maintain an active network of potential industry licensees there is no substitute for having a motivated and involved inventor teaming with our efforts. Inventors are often the best source of industry contacts and are the most


appropriate individuals to serve as the catalyst for the formation of a startup around the technology, as was the case here.”

Concentric Medical spent its infancy in a San Francisco Bay Area incubator called the Foundry. According to Gobin, the Foundry was an excellent place to start a company, as it provided engineering expertise and funding. As the company gained financial support, the design of the Merci Retriever continued to improve. A preliminary safety trial of the device was underway within a few years, and the results paved the way for the launch of a pivotal clinical trial.

A veteran business mind with expertise in developing new medical device companies, Gary Curtis came on board as president and chief executive officer of Concentric Medical in 2002. At this critical time the company needed additional venture capital to fund a clinical trial and move forward with commercialization of the Merci Retriever. With more than 35 years of experience in the startup medical device arena, Curtis has played a valuable role in the commercialization of numer-ous major medical tools including total hip replacement and interventional cardiovascular devices.

FDA Approval Spurs Concentric’s Momentum

Now headquartered in Mountain View, Calif., Concentric Medical is still privately held and benefits from an impressive number of major investors, including New Enterprise Associ-ates, ProQuest Investments, Oxford Bioscience Partners, and Schroder Ventures Life Sciences. Curtis said the company has achieved a revenue rate of approximately $1 million a month; he expects to be doubling that and approaching profitability by the end of this year. “We focused on the U.S. marketplace for my first four years, and we’re just starting to explore interna-tional markets and opportunities,” he said. “We have many hopes and expectations.”

The 65 employees of Concentric Medical feel fortunate to be part of a company that is truly saving lives. A major milestone occurred in 2004 when the Merci Retrieval System was cleared by the FDA, making it the first ever FDA-approved medical device for removing blood clots from the brains of ischemic stroke patients.

“With the approval of our product and the development of such interventions, we now help about 250 patients per month,” said Curtis. “It’s a very rewarding way to come to work each day.”

Since the approval of the Merci Retrieval System, there are now close to 250 hospitals in North America that have the product on their shelves, as well as trained clinicians able to use it to treat patients. Curtis estimates that since the device has been available, it has treated about 4,000 patients through clinical trials and interventions. Studies of the Merci Retriever have shown that if blood flow is restored to stroke victims within an eight-hour window of time, then half those patients will regain functional independence within 90 days. Without the means of such an intervention, only one out of 32 people suffering a stroke achieve that independence.

“We really consider Concentric Medical to be one of our big success stories,” said Loughran. “For very early stage technol-ogies such as the Merci Retriever, the number of products that not only make it through FDA approval but are then actually widely used are few. We’re excited to see this become one that is so valuable for the management and treatment of stroke.”

Thankful Patients

Unlike the majority of stroke victims who either die or suffer permanent disability, Melissa Welch and Marissa Arnold were fortunate to enjoy a full recovery. Welch was home from the hospital a week after her stroke just in time to spend Christ-mas with her family. Arnold was back to her full course load and playing varsity soccer as a junior at Mt. Holyoke College in South Hadley, Mass., just two weeks after her frighten-ing episode. The design, development and commercializa-tion of the Merci Retriever serves as a stellar example of how successful technology transfer to the marketplace is making our world a better place.


10

On the Bayh-Dole Act and its Effect On Global Technology Transfer

Dr. Polly Murphy: Worldwide, ownership rights to an invention vary—they may belong to the inventors themselves, the institution where it was discovered, or someone else. This has made commercialization difficult in many countries, as it was in the U.S. before passage of the Bayh-Dole Act. The law says that if you receive federal funding, then your institution has the right to retain title to an invention.

The result of this dramatic change was a revolution in the way government-funded research is commer-cialized. The act is “perhaps the most inspired piece of legislation to be enacted in America over the past half-century,” according to The Economist. “Innova-tion’s Golden Goose,” an opinion piece published in its December 12, 2002, edition, states: “Together with amendments in 1984 and augmentation in 1986, this unlocked all the inventions and discoveries that had been made in laboratories throughout the United States with the help of taxpayers’ money. More than anything, this single policy measure helped to reverse America’s precipitous slide into industrial irrelevance.”

In the realm of global technology transfer, the U.S. has certainly been leading the way, but other coun-tries are starting to catch up and are emulating the principals enacted under Bayh-Dole. Although in the U.S. we sometimes run into a licensee who does not understand the Bayh-Dole Act and its rules, it is never a huge stumbling block. We are generally able to bring them along.

Katharine Ku: Bayh-Dole was the impetus that moved universities to act on technology transfer because it clarified who could—and who could not—retain title to inventions. Prior to Bayh-Dole, obtaining the right to a license or patent was a confusing and difficult process, and few universities had the time or energy to commer-cialize technology.

Bayh-Dole had a positive impact on technology transfer and innovation. And in fact, many countries have already or are currently passing Bayh-Dole-like laws because they recognize the benefits. Globally, I think we will see more universities taking title to their inventions. I also believe the biotech and pharmaceuti-cal industries support university licensing agreements because they understand long development times.

Perspective

Technology Transfer

Katharine KuKatharine Ku is the director of the Office of Technology Licensing at Stanford University. Ku holds a Bachelor of Science degree in chemical engineering from Cornell University and a Master of Science in chemical engineer-ing from Washington University.

Stanford University’s Office of Technology Licensing (OTL) is responsible for licensing state-of-the-art university technologies and industry-sponsored research agreements and collabora-tions. As a result of its notable successes, the office routinely fields technology transfer questions from organizations across the country and serves as a model for many university licensing offices.

On moving innovative ideas and inventions into the marketplace

Innovation works at Stanford like everything else at Stanford—from the bottom up. When researchers make promising discov-eries, we encourage them to submit an invention disclosure. That way we are aware of the invention and we can try to iden-tify a company interested in that particular technology.

But innovation happens in other ways, too. Students and faculty are continually innovating and may even start companies based on their own ideas rather than on Stanford technology. The most interesting thing about academic research is that it is very early stage and very cutting edge—much more cutting edge than corporate research. So we are far more likely to be a source of revolutionary and disruptive technologies than industry is. Unlike companies, we are not focused on specific endpoints.

When deciding how to best move these technologies into the marketplace, we avoid forging deals with companies that will pay to simply tie up the technology. If we know the company wants the technology just so they can sit on it, we will not enter that deal because it does not help move the technology into the marketplace. Our goal is to do what is best to move the technol-ogy into the marketplace.


On Stanford’s most notable successes and contributions to the greater good

The three most noteworthy inventions to come out of Stanford are Google, a Stanford research project before it became a multibillion-dollar company; the Cohen-Boyer DNA splicing device, which netted more than $255 million for Stanford; and a license to a patent for making antibodies invented in 1984 to Centocor (later acquired by Johnson & Johnson).

As for contributing to the greater good, we believe interdisciplinary inventions offer the most promise and highest potential for a successful technology transfer to industry. For example, researchers create physical science embodiments that can solve biological prob-lems. The challenge is to recognize—at such an early development stage—whether the invention will make a difference or solve a market need. We are finding very interesting innovations in areas where industry does not yet exist. Within the Office of Technology Licensing, we are investing in technology because there is a clear value that can be placed on its potential to shape the world we live in today, as well as the world our children will live in tomorrow.

Polly Murphy, Ph.D.As the Senior Vice President for Business and Scientific Services at The Scripps Research Institute (TSRI), Dr. Polly Murphy oversees the commercialization of the technology invented at one of the world’s largest private, nonprofit biomedical research organizations. Before joining TSRI as vice president, while at the Office of Technology Management at the Salk Institute, she and her team were responsible for protecting and commer-cializing Salk technologies.

On the subject of technology transfer, Polly Murphy is well-versed, having served on the Board of Trustees of the Asso-ciation for University Technology Managers (AUTM). She also headed the technology transfer functions at two of California’s foremost biomedical research institutes.

On Scripps’ most notable successes and contributions to public health

All of the biomedical research at TSRI is directed toward expanding our knowledge of the workings of the human body—from the molecular level to complete biosystems—with the goal of improving human health. In just the past few years, Scripps researchers have made progress that may lead to significant therapies or drugs to combat macular degeneration, Friedre-ich’s ataxia, obesity, SARS and “bird flu”, HIV/AIDS, hepatitis B and C, mad cow disease, ovarian cancer, ALS (Lou Gehrig’s disease), Alzheimer’s disease, Gaucher’s disease and many forms of cancer.

The drug HUMIRA is a notable example. And making the devel-opment of that drug possible was our success in phage display antibody technology, which has certainly been important in the development of monoclonal antibody therapeutics. The cancer therapeutic Leustatin and hemophilia treatment Monoclate are two other examples of products that have originated in labs here at Scripps.

12

University of California, Santa Barbara

Researcher Improves Life-SavingBlood Clotting Agent

Marines deployed in Iraq carry what looks like a container of sand but is actually a novel agent used to stop severe bleeding. The granular substance, a product called Quickclot brand hemostatic agent, is manufactured by Z-Medica Corp., which recently licensed intellectual property originating at University of California, Santa Barbara (UCSB) to improve its product.

Originally developed in cooperation with the U.S. military and approved by the FDA in 2002, Quickclot is a novel blood-clotting agent that is helping emergency response personnel and soldiers save lives at home and abroad. Researchers in the laboratory of Dr. Galen Stucky, a professor with joint appointments in materials science and chemistry, studied the molecular properties of Quickclot and used their insights to develop a new formulation.

Quickclot employs mineral material derived from volcanic rock, generically termed a zeolite, to solve the problem of excessive bleeding. The zeolite acts like a sponge to absorb water from blood by funneling and trapping it in tiny pores. Unlike a sponge, however, Quickclot is selective, leaving clotting proteins in blood behind. Because these proteins and platelets are too large to enter the pores in the zeolite, they become more highly concentrated, speeding up the process of clot formation. The UCSB inventors discovered that zeolite surface chemistry also enhances clotting by activating platelets, binding phospholipids, and providing calcium ions, a cofactor for clotting enzymes.

The original formulation of Quickclot generates heat when it comes into contact with water, which can produce unwanted effects. The UCSB team found this exothermic reaction was due to hydrogen bond formation between positively charged atoms in the zeolite and water in the blood. By altering the mix of positively charged atoms in the formulation they were able to eliminate the problem. The new formulation discovered at UCSB includes silver ions, which have known antibiotic activity, further enhancing the product’s usefulness in wound treatment.



Dr. Daria Mochly-Rosen, co-founder of KAI Pharmaceu-ticals, earned her undergraduate degree in biological sciences from Tel Aviv University and her doctorate in chemical immunology from the Weizmann Institute of Science in Rehovot. A professor in the chemical and systems biology department, and professor, by courtesy, at Stanford University School of Medicine’s neurosurgery department, she joined the Stanford University faculty in 1993. Dr. Mochly-Rosen, inaugural holder of the George D. Smith Professorship in Translational Medicine since 2003, currently leads the school’s efforts to advance the fields of molecular pharmacology and chemical biology and their application to translational medicine.

A biochemist by training, Dr. Mochly-Rosen’s work focuses on the study of a family of enzymes called protein kinase C (PKC), which, when activated, regulates diverse functions such as heart rate, the response of the heart and brain to stress induced by heart attack, and the regulation of cell growth in normal and cancerous tissues. Her laboratory generated novel isozyme-specific inhibitors and activators.

Basic science observations in her lab at Stanford Univer-sity led to the design and testing of these novel drugs in humans. One drug has successfully completed Phase IIa clinical trials in patients with acute myocardial infarc-tion. The team also continues to test other therapies for additional diseases, including hyperalgesia, age-related macular degeneration and chronic inflammation. KAI Pharmaceuticals, which she co-founded in 2003, leads this clinical effort. In the following interview, Dr. Mochly-Rosen shares her views on the groundbreaking implica-tions of her research and her mission to promote the transfer of promising academic discoveries to the care of patients.

On PKC

In 1983, Dr. Mochly-Rosen’s interests turned to PKC, an enzyme present throughout the body’s tissues and organs. Several forms of PKC affect cellular functions, and researchers are examining its potential for the treatment of cancer. One phenomenon intrigued Dr. Mochly-Rosen: “Why do many of the same forms of the enzymes present in cells respond to the same stimuli but trigger different reactions? How is selectivity determined?”

Dr. Mochly-Rosen set off to find the answer. “I developed antibodies to the enzyme, and each localized to different parts

of the cells. This discovery led me to believe that this could be the reason they acted differently. This went against common thought, which held that an enzyme moves to the periphery of a cell where the normal activator of the cell occurs.”

She then used inhibitors to deactivate one enzyme but not the other and began working with heart cells in culture. She found that one inhibitor caused the heart cells to beat faster and one to beat slower. “The inhibitors worked against each other and also regulated heart nutrients for ischemia,” she explained. “Dr. Karliner, the chief of cardiology at Veterans Affairs at UCSF encouraged me to focus on heart ischemia and sent a cardiol-ogy fellow from his lab to work jointly with me on this project.

“Encouraged by the idea that my research could make a difference in saving lives, things began to matter.”

Dr. Mochly-Rosen reasoned that the same two enzymes that make the heart beat faster and slower do it at a different time during the ischemic event. This manipulation worked in a dish, but would it work in animals? “Eventually we were looking at heart attacks in vivo and saw the same phenom-enon,” she said.

Patents were written on this technology at Stanford, and after several years of research on different animal models, Dr. Mochly- Rosen’s team was able to provide animal data that indicatedelta inhibitor decreased damage to the heart 70 percent after a heart attack; and damage to the heart decreased 70 percent after a stroke; epsilon activator administered prior to the ischemic event was protective with 60 percent reduction.

On Founding KAI Pharmaceuticals

In spite of the promising research results into PKC, industry was not quick to license the technology. Dr. Mochly-Rosen was not deterred.

“I made a deal with Leon Chen, a student working in my lab, that if Stanford had not been able to obtain a license on the PKC research by the time he graduated, I would start a company with him,” she said. “Unfortunately, or fortunately, Stanford was unsuccessful in its bid to license the technology. I was repeatedly told I should not attempt to found a company but should instead focus on my research. But I kept my word to Leon and raised $17 million in first-round funding, then another $10 million for KAI Pharmaceuticals, and at the end of 2002, we were incorporated.”

Today, KAI Pharmaceuticals is a biology-based, product- driven biopharmaceutical company developing a new class of therapeutics that selectively target enzymes within the PKC family, with an initial focus in acute cardiovascular disease, pain and inflammation.

Perspective

Dr. Daria Mochly-Rosen

14

Dr. Mochly-Rosen led the company through its first year to establish the preclinical science programs and assist in the clinical trial. She met with the FDA, helped prepare the investigational new drug (IND) application, and visited approximately 50 hospitals that carried out the clinical trials in the U.S., Europe and Brazil.

“The one year I spent in industry really humbled me,” she said. “It was a wonderful experience to see so many people excited and involved with working on my dream.”

Dr. Mochly-Rosen then returned to academia and her passions—teaching, lab research and interaction with students.

On Founding the Spark Program

Upon her return to the laboratory and a leadership position at Stanford, Dr. Mochly-Rosen initiated the innovative Spark program, which promotes the transfer of promising academic discoveries to the care of patients. Her impetus for founding the program was in part her frustration trying to get companies interested in her PKC research.

“Spark’s mission is to look at inventions that others have disclosed, and if Stanford University Office of Technology Licensing shops it and no patents are licensed, we exam-ine them ourselves to determine if we can help those inventions get licensed,” she said. “The university then provides selected technologies funding for one year plus, perhaps just as important, mentoring from faculty with industry experience.”

Dr. Mochly-Rosen initially examined 470 biological science-related patents—from civil engineering to small compounds that treat cystic fibrosis—and ruled out devices because of Stanford’s well-established device program, BioDesign.

“Ultimately, my colleagues and I reviewed all 470 patents and pared the list down to nine patents and two inventions, based on our understanding of the needs from industry. Five technologies currently are doing very well, and one moved to industry in part.

“Spark strives to uphold the spirit of academic collaboration,” Dr. Mochly-Rosen explained. “Unlike academic research, companies have no incentive to share what they learn. I like to teach what I’ve learned so that the technology can perpetuate itself.”

“The one year I spent in

industry really humbled

me. It was a wonderful

experience to see so

many people excited and

involved with working on

my dream.”

— Dr. Mochly-Rosen


Lawrence Berkeley National Laboratory

Berkeley Lab and Symyx Technologies:A Winning Combination

With its unique approach to materials identification and analysis, Symyx Technologies is helping powerhouse companies worldwide blaze new trails in the realm of research and development.

Take one brilliant idea, a supportive national laboratory and a savvy technology transfer office, and occasionally the combination will hit the jackpot. It’s all quite fitting given that the essence of this story is a technology based on the concept of combinations. The key elements, when brought together, resulted in the company Symyx Technologies, Inc., which today generates more than $100 million in sales annually.

Symyx was sparked by the innovative research of renowned scientist Peter G. Schultz, Ph.D., who began his career studying DNA, catalytic antibodies and other biological molecules. Professor Schultz was intrigued by the concept that manipulating antibodies in different combinations yielded an exponentially higher number of biological products, thereby opening the door to broader testing for immune-related drugs. As a chemis-try professor and principal investigator at the Lawrence Berkeley National Laboratory in Berkeley, Calif., in the 1990s, he applied the same approach to the growing field of materials sciences.

While conventional materials development involved creating new materials one at a time, and then painstakingly testing each one for desired qualities, analyzing combi-nations of materials promised to revolutionize the process. Professor Schultz and his colleagues at Berkeley Lab invented and reduced to practice a highly efficient and auto-mated process, called high throughput, for simultaneously analyzing 10,000 different materials, or “combinatorial libraries.” Using the techniques of miniaturizing and simul-taneous parallel processing, they designed a technology that allowed them to identify new materials with specific and desirable physical and chemical properties. These lead compounds were then analyzed and characterized to determine their structure.

The scientists achieved their goal of applying the concept of high throughput research to combinatorial chemistry, and applied it to the discovery of new materials – from magnets and super conductors, to catalysts and polymers. When they published this milestone in 1995, it warranted the cover story of the journal Science. That very same year Symyx was founded. “It was a very broad concept with high risk that needed to be developed and commercialized within an entrepreneurial venture,” said Symyx President and CEO Isy Goldwasser. “That’s why Symyx was quickly founded to advance this technology.”

New Strategies for Successful Technology Transfer

The partnership between Symyx and the Berkeley Lab Technology Transfer Department was somewhat unusual, but proved to be beneficial to both parties. According to Viviana Wolinsky, licensing manager at the Berkeley Lab, the Symyx-Berkeley license transac-tion is believed to be the first of its kind whereby a national lab accepted partial payment in the form of equity. This arrangement allowed the startup company, based on the core intellectual property created at the Berkeley Lab, to devote more of its initial capital to developing the promising technology.

“As a Department of Energy lab, we’re always keen to make appropriate choices with licensing,” said Wolinksy. “We realized that Symyx had a great plan from the start— it made the right choices and has really gone far beyond initial plans.”

The original funding for the work was an $80,000 grant to Professor Schultz for his research from Berkeley Lab’s Laboratory Directed Research and Development (LDRD) Program. The LDRD program is a source of discretionary funding that awards grants through a scientific and management peer review process for early-stage projects that are directed to the advanced study of hypotheses, concepts, or innovative approaches to scientific problems.

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By 1998, Symyx had raised $38.7 million from a variety of private and venture sources, including Alejandro Zaffaroni, Bayer INNOVATION, Chemical and Materials Enterprise Associates, Institutional Venture Partners (which is now Versant Ventures) and Venrock Associates. The company, headquartered in Santa Clara, Calif., went public in 1999 and is listed on NASDAQ.

Today Symyx is an impressive example of a federally funded technology that resulted in a vibrant and profitable startup, creating hundreds of high-value jobs. Symyx has more than 375 employees, the majority of whom are high-level scientists and technical staff.

“We’re proud of this job creation, as well as other direct and indirect effects on economic development,” said Wolinsky. “Symyx has become a research powerhouse for other businesses both nationally and abroad.”

Symyx’s performance continues to shine. Last year the company reached over $108 million in revenue. Goldwasser said that as the first company worldwide to offer this technology, it has built a leadership role and therefore gains the most business and the most investments. Currently its equity is worth approximately $750 million, a value that has benefited both the Berkeley Lab and othe Symyx shareholders.

Impacting the Big Industries

The list of materials and technologies that have emerged from the company’s founding technology continues to grow, as does the list of pharmaceutical, chemical, energy and electronics companies that have benefited from Symyx tools, software and research services. Two of the company’s more prestigious clients are ExxonMobil and Dow Chemical, and each has made a long-term commitment to change its organization to conduct research and development the way Symyx does, according to Goldwasser.

“Industry-leading companies like these don’t usually seek help from outsiders, so it’s been a big shift for them,” he said. “This exemplifies how Symyx has changed an industry that is normally very resistant to change.”

The materials that have been developed in the years since Symyx introduced its broad methodology include new polymers, chemical catalysts and specialty formulations. With over 320 issued patents, Symyx has the largest portfolio of any company devoted to high throughput materials discovery.

“Most technologies out of universities and national labs are very early stage technolo-gies that need further nurturing and are not ready to jump out of the lab and into the marketplace,” said Wolinksy. “But Symyx was able to take a very early stage technology, and a great concept, and exploit it to its fullest so that it’s now providing huge value across an entire panoply of industrial sectors. It’s very rewarding to see a licensee that has devoted its resources and creative energies so well.”

Goldwasser, who began his involvement with Symyx as a summer student with Schultz, is perhaps most proud of the way in which Symyx is changing the field of materials sciences.

“We have been very profitable and very fast growing for a small company,” he said. “What’s most impressive for everyone is that we have really achieved what we initially defined as our overall vision—to change the way that research and development is conducted, by making it faster, better and more efficient.”



Funding the Seeds of Scientific Excellence

Academic research often is early stage with discoveries made for discovery’s sake, with no specific endpoint or commercial product in mind. Investors and industry cannot afford to fund work that benefits most from “following the data,” as their business models depend on predictable and timely returns on investment.

Researchers at academic and other institutions rely primarily on government grants and, to a lesser degree, philanthropic support to advance their scientific discoveries. NIH funding, long the backbone of life sciences research in the U.S., is the primary funding source for basic medical research in our nation’s academic laboratories.

Since the 1950s, NIH-supported research has led to discoveries that have vastly improved global public health and saved countless lives. Counted among them are the California examples described in this report. Other notable examples include improved treatments for AIDS, malaria, tuberculosis and many other diseases with devastating global impacts.

By encouraging individual investigators to pursue their interests in specific areas of basic research—free from pressures that would be imposed by business interests and other proprietary funding sources—the NIH has transformed medicine. NIH funding also benefits California’s life sciences industry and general economy by producing inventions that companies can develop into commercial products. These products, in turn, improve public health and save lives.

Types of Research Funded

The NIH encompasses 27 institutes and centers. Each of these institutions funds a wide variety of biomedical research in California. The National Cancer Institute (NCI) tops the list with the largest amount of funding administered ($491 million), followed by the National Institute of Allergy and Infectious Diseases ($480 million) and the National Institute of General Medical Sciences ($379 million). Additional NIH admin-istering organizations include the National Heart, Lung, and Blood Institute; National Institute of Neurological Disorders and Stroke; National Institute of Mental Health; National Institute on Aging; and National Institute of Diabetes and Digestive and Kidney Disorders. The large number of NIH organizations administering funds to California demonstrates the wide range of research that takes place in the state.

California NIH funding recipients

As shown in Figure 2, for fiscal year 2007, 10 of the top 15 recipient institutions in California were universities, including the top four recipient institutions (University of California San Francisco, University of California Los Angeles, University of California San Diego and Stanford University).

Of the non-academic institutions, Scripps received nearly three times the amount of funding ($198 million) as the next institution, Burnham Institute for Medical Research ($70 million). Salk Institute for Biological Studies, National Childhood Cancer Founda-tion and Northern California Institute of Research and Education rank third through fifth, respectively, for non-academic institutions.

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Northern California Institute Res & Educ

National Childhood Cancer Foundation

Salk Institute for Biological Studies

University of Calif-Lawrence Berkeley Lab

California Institute Of Technology

Burnham Institute for Medical Research

University of California Berkeley

University of California Irvine

University of California Davis

University of Southern California

The Scripps Research Institute

Stanford University

University of California San Diego

University of California Los Angeles

University of California San Francisco $439

$373

$316

$305

$198

$167

$158

$122

$104

$70

$54

$48

$47

$44

$36

$0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500

Fiscal year 2007(millions of dollars)

Figure 2: Fifteen largest NIH grantee institutions in California fiscal year 2007 (millions of dollars)

NIH Funding to CaliforniaCalifornia, as a reflection of the excellence of its researchers, consistently is awarded more NIH funding than any other state. In 2007, California received more than $3.16 billion in funding from NIH in the form of 7,357 grants. Nearly 96 percent of that money, or $3 billion, funded research grants. The remaining funds supported activities such as fellowships, training and construction.

Tables 2a and 2b show the amount of NIH funding and the number of grants, respec-tively, that California received by grant type between fiscal years 1998 and 2007. Table 2c lists the dollars allocated for each grant type. Historically, research grants have comprised the bulk of funding that the state receives, both in terms of dollar amount and number of grants.

Although training grants and fellowships increased in absolute terms between fiscal years 1998 and 2005, training grants and fellowships—both nationally and for California—have decreased as a share of total NIH funding in recent years. Nationally, funding declined from 3.9 percent in fiscal year 1998 to 3.7 percent in fiscal year 2007, and from 4 percent in 1998 to 3.7 percent in 2007 for California (Table 3).

Grant type 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Total $1,662 $1,933 $2,248 $2,497 $2,905 $3,386 $3,613 $3,301 $3,143 $3,163

Research grants $1,440 $1,621 $1,865 $2,078 $2,375 $2,654 $2,893 $3,000 $3,025 $3,039

Training grants and fellowships $67 $81 $83 $89 $97 $108 $114 $116 $111 $118

Training grants $55 $66 $67 $73 $79 $89 $94 $95 $90 $97

Fellowships $12 $15 $16 $16 $18 $19 $20 $21 $21 $21

Construction grants $5 $5 $7 $11 $13 $13 $10 $5 $1 $1

Other awards $3 $4 $5 $6 $6 $6 $6 $6 $21 $5

Table 2a: California’s NIH grants by grant type fiscal years 1998 to 2007 (millions of dollars)

Note: numbers may not sum to total due to rounding. Source: National Institutes of Health, Office of Extramural Research

Source: National Institutes of Health, Office of Extramural Research


Grant type 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Total 5,301 5,627 5,969 6,221 6,603 7,015 7,366 7,460 7,235 7,357

Research grants 4,472 4,758 5,086 5,350 5,720 6,106 6,432 6,470 6,428 6,525

Training grants and fellowships 718 742 760 745 754 759 772 794 787 808

Training grants 279 283 277 282 275 282 287 290 285 301

Fellowships 439 459 483 463 479 477 485 504 502 507

Construction grants 7 8 4 8 8 7 4 5 2 2

Other awards 13 13 22 20 20 24 22 25 18 22

Table 2b: Number of California’s NIH grants by grant type fiscal years 1998 to 2007


Grant type Dollar amount Grants awarded

Construction grants $1,259,925 2

Fellowships $21,227,139 507

Other awards $5,379,512 22

Research grants $3,038,818,707 6,525

Training grants $96,566,893 301

Total $3,163,252,176 7,357

Table 2c: Dollar amounts of grants allocated by grant type in 2007

Table 3: NIH grants, total and training fiscal years 1998 to 2007 (millions of dollars)

Notes: Training awards are designed to support the research training of scientists for careers in the biomedical and behavioral sciences, as well as help professional schools to establish, expand or improve programs of continuing professional education. Fellowships are an NIH training program award where the NIH specifies the individual receiving the award. Data are in nominal terms.


1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

United States

Total grants $11,136 $12,804 $14,721 $16,701 $18,947 $21,669 $22,552 $23,117 $20,813 $21,067


Training as a percent of U.S. total 3.9% 4.0% 3.7% 3.6% 3.5% 3.3% 3.3% 3.3% 3.6% 3.7%

California

Total grants $1,662 $1,933 $2,248 $2,497 $2,905 $3,386 $3,613 $3,301 $3,143 $3,163


Training as a percent of California total 4.0% 4.2% 3.7% 3.6% 3.3% 3.2% 3.2% 3.5% 3.5% 3.7%

California’s share of U.S.

Total U.S. grants 14.9% 15.1% 15.3% 15.0% 15.3% 15.6% 16.0% 14.3% 15.1% 15.0%

Training grants and fellowships 15.6% 15.8% 15.2% 15.0% 14.7% 15.0% 15.2% 15.2% 14.6% 15.1%


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University of California, Berkeley

KineMed Offers Kinetic View of the Body

KineMed is a drug development company built upon a new way of seeing the inner workings of the human body and thus predicting clinical outcomes.

Marc Hellerstein, M.D., Ph.D. is a professor of nutrition at the University of California, Berkeley; professor of medicine at University of California, San Francisco; and a physician specializing in diabetes treatment at San Francisco General Hospital. He has long been interested in metabolism. He also has had a lifelong interest in translational medicine, or the process of bringing new tests and therapies out of the labora-tory and into the clinic.

So, he said, he was struck by the differences he encountered between standard medical care and biological laboratory research. “I couldn’t understand why we were not measuring the same cellular and molecular processes in a human being that we could do routinely with cells in the lab,” he said. “I was convinced that the type of tools I had been working on to answer questions in human metabolism could be used in medical diagnostics and drug discovery.”

Hellerstein’s first invention was a method for non-invasively measuring the synthesis of polymers, such as proteins, choles-terol and glycogen, in the body. Prior to the invention, these measurements had some fundamental limitations.

“We could give a non-radioactive isotopic label to a person, but how could we figure out how much of the label really made it into the cells? You never knew how much label got into the biosynthetic machinery that generated a polymer, because it was non-accessible.”

He solved the problem by developing a combined mathemati-cal and mass spectrometric approach to calculate definitively how much of the label was being delivered into the cells. He patented that invention through University of California, Berkeley and today, there are more than 100 patents in the portfolio. Hellerstein and his longtime friend, David Fineman, licensed the core technology as a platform for their biotech-nology company, KineMed, in Emeryville, Calif., which they founded in 1999.

The technology works by measuring the flow of molecules through pathways, like a motion picture capturing the dynam-ics of a good billiards break. “It’s like being able to see the

entire table, and watch all the balls go in different directions, seeing where they hit each other and what path they travel across the table, all at the same time,” said Fineman.

“The molecules in the body don’t just sit there,” said Heller-stein, “yet most diagnostic tests today are static measure-ments. You can see an X-ray or CT scan of a structure, or measure the level of messenger RNA in a cell, but these types of measurements do not show movement, and in truth, every-thing is dynamic. So it was clear that there was a huge gap in the tool kit.”

Applying new strategies for tagging key processes in the body with non-radioactive tracers, combined with new mass spectrometric and mathematical analyses of these dynamic processes, enabled Hellerstein to see the kinetics of various biological pathways and processes. He characterizes most diseases as disorders of kinetics and the control of kinetics.

“Cancer is related to the production rate of cancer cells,” he said. “Liver cirrhosis is about the production and breakdown rates of collagen; AIDS is about the production and death rates of T-cells. Biochemistry is regulated through rate control,” that is, kinetics.

KineMed is now investigating the dynamic basis of various diseases by isolating specific molecules and looking at them through a kinetic lens. The company has hired dozens of researchers with various specialties to develop its own drugs and has relationships with more than 20 drug companies that are using KineMed’s platform in combination with other methods of drug discovery and testing.

“Kinetic medicine adds a new dimension in biology by includ-ing the measurement of time, the element that’s been missing in the area of drug development and molecular biology,” said Hellerstein.

KineMed is already making a difference in research, having developed assays for several major disease states, including cholesterol metabolism, insulin resistance, neuronal dysfunc-tion, fibrosis and inflammation. That’s powerful technology that can lead to more powerful medicine.



Research institutions in California won more NIH grants than any other state, and these funds play an integral role in developing lifesaving and life-enhancing thera-pies. The following sections detail the vital role NIH funds have played in improving human health and creat-ing breakthrough therapies at several California research institutions including the University of California system, the University of Southern California, Stanford University, The Scripps Research Institute and the California Insti-tute of Technology.

University of California

Partnering with the NIH to advance medical science and improve healthcareWilliam Tucker, executive direc-tor of research administration and technology transfer at UC, stated: “The level of government funding for research in the U.S. is phenomenal, far greater than anywhere else in the world. The results demonstrate that we have the most vibrant university-based research environment in the world, primarily because of federal government and NIH funding for biomedical research. Without this funding, there would be no innovation engine.”

UC researchers successfully competed for more than $1.56 billion in NIH funding in 2006. At UC, NIH-funded research drives numerous discoveries and medical developments that steadily improve the quality of healthcare in the United States and throughout the world. These advancements touch our daily lives, allow physicians to identify medical conditions early and provide hope for significant medical challenges. They include:

• Artificiallungsurfactant,whichallowsprematureinfants to breathe

• TheHerceptinantibody,whichisusedforbreastcancer treatment

• Thenicotinepatchforsmokingcessation

• Acatheterdevicetotreataneurysms

• VitaminsEandK

• HepatitisBvaccine

• Anewbreastcancercomputedtomography(CT)scanner to detect tumors much earlier than conven-tional mammography

In addition to these advances, UC has untangled the building blocks of many complicated diseases, creating promise for individuals now suffering from cancer and Alzheimer’s disease. The following important discoveries also were made by NIH-funded UC researchers:

• UCresearchersdiscoveredproto-oncogenes,or normal genes that have the potential to convert to cancer genes. The discovery transformed the way that scientists look at cancer and is leading to new strategies for detection and treatment.

• UCresearchersdiscoveredtheprion,aninfectiouspathogen that causes many fatal neurodegenerative diseases. The discovery could provide insights into the prevention of Alzheimer’s disease.

• UCresearcherswerethefirsttoidentifyanddescribeHIV, a watershed discovery in AIDS research.

Promising developments on the horizon: linking scientific advances to real-world healthcare

UC Davis and UCSF successfully competed for NIH funding to establish clinical and translational science centers. These centers house innovative and collaborative medical research facilities to accelerate the pace at which discoveries in basic science can serve the health of patients and the community. Through the centers, UC Davis and UCSF are finding more effective ways to move medical discoveries from the bench to the bedside.

California NIH-Funded Research Achievements

Hepatitis-B vaccine 15.299

Treatment of intracranial aneurysms 8.763

Dynamic skin cooling device 7.037

Interstitial cystitis therapy 6.439

EGF receptor antibodies 5.750

Top five products based on UC technologyby revenue (in millions of dollars)

UC invention disclosures

2002 2003 2004 2005 2006

UC invention disclosures 1,303

Active inventions 7,513

Inventions reported 973 1,027 1,196 1,304 1,308

U.S. patents issued 300 323 270 310 270

Total UC U.S. patent portfolio

2,502 2,753 3,024 3,275 3,316

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Tackling Alzheimer’s disease

NIH funding helps several UC campuses conduct innovative research to beat back the debilitating impacts of Alzheimer’s disease:

• AtUCLA,researchersdiscoveredthatamoleculebinding abnormal proteins in the brain shows promise for enabling early and reliable detection of Alzheim-er’s disease. This important discovery also may allow scientists to develop therapies to slow or halt progression of Alzheimer’s disease.

• ArecentlyawardedgrantfromNIHsupportstheAlzheimer’s Disease Cooperative Study. This study is led by UCSD and is a 70-site research consortium conducting clinical trials on Alzheimer’s disease. The trials are seeking to identify drugs that effectively treat Alzheimer’s symptoms or slow the disease’s progression.

• AtUCSB,scientistsinitiatedanewapproachtostudying Alzheimer’s disease, which applies special-ized chemical research methods to biology to promote understanding of molecular level changes that lead to the development of the disease.

Improving diabetes and high cholesterol treatment Researchers at UCSD assembled a “virtual human metabolic network” that provides a new way to hunt for treatments of metabolic disorders including diabetes and high cholesterol. This first-in-kind network builds on the sequencing of the human genome and contains more than 3,300 known human biochemical transformations that have been documented during 50 years of worldwide research.

Limiting the spread of avian flu NIH-funded researchers at UC Irvine have made break-throughs in understanding the migration patterns of the avian flu virus. In an innovative study, investigators tracked genetic and geographic virus data spanning the last decade, iden-tifying its origins and regional and international migration patterns. This research will help public health officials develop effective approaches to limit the spread of the virus.

Battling blindnessAn NIH grant allowed UC Berkeley and Lawrence Berkeley National Laboratory to create the Nanomedicine Development Center, which undertakes research to treat the major cause of blindness, the loss of photoreceptors, the light detectors in the retina. UC scientists aim to equip the cells of the retina with photoswitches, essentially helping blind nerve cells see and restore light sensitivity for individuals with degenerative eye diseases.

Developing therapies for diabetes, allergies, asthmaand multiple sclerosisThe Immune Tolerance Network (ITN) is a groundbreak-ing multinational clinical research initiative at UCSF, aimed at advancing the clinical application of immune tolerance

therapies. NIH awarded UCSF $134 million in 1999 to create the ITN and recently renewed the award for more than $200 million. The ITN has made a remarkable contribution to devel-oping immune tolerance therapies, bringing together experts from a variety of disciplines and institutions to focus on devel-oping effective treatments for autoimmune diseases such as diabetes, allergies, asthma and multiple sclerosis.

Improving dental healthResearchers at UCLA created a new smart antimicrobial treat-ment that can be chemically programmed in the laboratory to seek out and kill a specific cavity-causing species of bacteria, leaving the good bacteria untouched.

Understanding how viruses spreadUC Riverside scientists are now studying the mechanisms of virus assembly. Understanding how viruses are assembled is important because viruses such as sexually transmitted HIV and mosquito transmitted West Nile virus are spread only in assembled form.

Promoting women’s healthThe NIH funded UC Davis researchers to conduct an arche-type study to determine the importance of ancestry on the development of diseases in women. Researchers will analyze samples taken from 160,000 postmenopausal women who participated in the Women’s Health Initiative, which focused on some of the most frequent causes of death among post-menopausal women: heart disease, breast and colorectal cancer, and osteoporosis fractures.

Key facts: • 581lifesciencecompanieshavelinkstoUC

• 1in4publicbiotechsarewithin35milesofa UC campus

• 1in6publicbiotechswerefoundedbyUCscientists

• 1in3CaliforniabiotechswerefoundedbyUC scientists

• 57percentofCaliforniabiotechshaveUCscientistsand engineers as executives

• 224CaliforniaR&DcompaniesputUCSB research to work

• All10campusesareconnectedtoR&Dcompaniesthroughout the state

• Approximately75percentofthe$2.6billionannualfederal funding of biomedical research at UC comes from the NIH

Source: California Research University Network Biomedical Research Highlights


University of Southern California

NIH funds fuel medical breakthroughsKrisztina Holly, vice provost and executive director of USC Stevens Institute for Innovation, stresses the importance of NIH funding: “Companies are focusing on development. Universities are the only places where research is happening for the sake of new knowledge—the true spark of innovation. They are not bounded by certain expectations for quarterly returns or outcomes in the short term. It is critical for universi-ties to secure funding to conduct early breakthrough research; otherwise, no one is going to do it. Due to long timelines, if one loses funding now, in 10 to 20 years we will all feel a detrimental impact.”

Key facts

• FiftypercentofUSClicensingincomecomesfromitsmedical school, while 37 percent of licensing deals last year were in the life sciences.

• InFY06,USCreceived$167.3million,or43percentoftheuniversity’s total sponsored research grants, from the U.S. Department of Health and Human Services (HHS), with NIH being the primary source.

• NIH-fundedresearchatUSCistranslatingintohealthcareinnovations in the following ways:

• Stopping cancer by inhibiting DNA methylation Institute: National Cancer Institute USC researchers made the critical link between

inhibiting DNA methylation, a process by which a chemical cluster called a methyl group is attached to the surface of a DNA strand and obstructs DNA transcription, and silencing genes. This research demonstrated the promise of epigenetic therapy and led to the development of two drugs that can inhibit cancer. The FDA has approved Vidaza and related drug Dacogen for the treatment of myeloid dysplastic syndrome, a pre-leukemic condition in older patients.

• Preventing opportunistic pneumonia in HIV-infected infants

Institute: National Institute of Allergy and Infectious Diseases

USC researchers discovered the association between CD4 (T-cells that help protect the body from infec-tions) counts and the opportunistic infection pneu-mocystis carinii pneumonia (PCP) in children. The discovery defined CD4 counts for HIV-infected infants at various stages of disease. In turn, this spurred recommendations for prevention of PCP and was used in the development of the first national guide-lines for antiretroviral therapy for infants and children with HIV.

• Discovering the impact of traffic exposure on lung function Institute: National Institute of Environmental

Health Sciences

In 2007, researchers at USC published a study in The Lancet that found that children who live near a major highway are not only more likely to develop asthma or other respiratory diseases, but their lung development also may be stunted. Researchers discovered that children who lived within 500 meters of a freeway, or approximately a third of a mile, since age 10 had substantial deficits in lung function by the age of 18, compared to children living at least 1,500 meters, or approximately one mile, away. The research was based on a longitudinal study which tracked more than 3,600 children from about age 10 through high school graduation, or about eight years.

• Taking the guesswork out of chemotherapy Institute: National Cancer Institute USC researchers developed a methodology that

allows the extraction of RNA from the small biopsy samples typically taken in physicians’ offices, making it much easier to analyze genetic properties in tumor tissue that can predict which tumors will respond best to certain types of chemotherapy. These researchers then commercialized a new technology that informs patients with certain cancers and their oncologists about which type of chemotherapy drug is most likely to be effective for their specific cancer before treatment even begins. This gives patients the best chance at positive results and avoids other potentially unsuccessful, uncomfortable and costly therapies.

Source: California Research University Network Biomedical

Research Highlights

“Companies are focusing on

development. Universities

are the only places where re-

search is happening for the

sake of new knowledge—the

true spark of innovation...”

— Krisztina Holly, Vice

Provost and Executive

Director of USC Stevens

Institute for Innovation

24

The future of personalized medicine at USC

Personalized medicine is the use of new methods of molecular analysis to better manage a patient’s disease or predisposition toward a disease. It aims to achieve optimal medical outcomes by helping physicians and patients choose the disease management approaches likely to work best in the context of the patient’s unique medical history. Researchers at USC are developing and deploying devices, systems and materials that can translate knowledge and innovation in health issues to the nanoscale in the pursuit of advancing personalized medicine. This research focuses on the integration of nanoscience and medicine, with the ultimate goal of creating technology and therapies that can, within a single human body, detect diseases, deliver treatments with pinpoint accuracy and help re-establish tissue and organ functions.

Current projects include:

• Integrated microdevices to capture and detect circulating tumor cells

Dr. Richard Cote, professor of pathology, and his colleagues are developing the ability to detect the earliest metastatic spread of tumors in a minimally invasive and user-friendly manner that could have a significant impact on the clinical management of cancer patients. Based on earlier work with micropore membranes, the research group is now develop-ing a microchip device for processing blood, and eventually bone marrow and fluids such as pleural effusions or ascites. The outcome of the work will be a cost-effective, easy to use, on-chip system for capture, identification and characterization of circulating tumor cells.

• Mutation detection and gene expression arrays The diagnosis of patients with peroxisome biogenesis

disorders is time consuming, labor intensive and highly specialized because it requires establishing fibroblast cultures and performing biochemical lipid analyses for every individual tested. Dr. Joseph Hacia, assistant professor of biochemistry and molecular biology, is working on novel oligonucleotide microarray-based diagnostics to identify causative mutations in genomic DNA from patients with these disorders. In addition to providing the genetic infor-mation needed for the rational design of therapies, these high-throughput genetic tests will allow for more accurate predictions of clinical outcomes for these individuals and facilitate prenatal diagnosis in future pregnancies.

• Biomimetic microelectronic research Researchers in the USC Viterbi School of Engineering and

the Keck School of Medicine are developing the science and engineering of novel biomimetic microelectronic systems. Such systems will allow bi-directional communica-tion with human tissue, and by doing so enable implantable/portable microelectronic devices to treat presently incurable diseases such as blindness, paralysis and memory loss.

• Retinal prosthetic system Dr. Mark Humayan, professor of ophthalmology, and his

colleagues have been working for several years to develop

a retinal prosthetic system that could provide vision to millions of blind persons. At the 2007 American Association for the Advancement of Science annual meeting, research-ers at USC’s Doheny Eye Institute announced the next step in their efforts to advance technology to help patients with retinitis pigmentosa and macular degeneration regain some vision using an implanted artificial retina. The FDA recently approved an investigational device exemption (IDE) to conduct a clinical study of the new device, dubbed the Argus II Retinal Prosthesis System.

• Neuromuscular prosthetic system Dr. Gerald Loeb, professor of biomedical engineering, and

his research group are focused on the development of sensorimotor prostheses that could accelerate rehabilita-tion, reduce disability and prevent complications in stroke and spinal cord injury survivors. The basic requirements of such systems are to detect a desire to move and act on this desire by electrically activating the muscles. Work on first-generation systems will initiate a movement by sens-ing the intent from the proximal remaining motor function (e.g., shoulder movement as a trigger for arm extension). As cortical interfaces become available, the next-generation systems will initiate movement based on neural activity recorded from the motor cortex.

• New medical devices and technologies The Alfred E. Mann Institute at USC is a nonprofit organiza-

tion that supports research, development and commer-cialization of biomedical devices and other technologies. The institute provides philanthropic support for biomedical device development that can significantly impact health-care. Projects under way in the institute include: develop-ment of implantable bionic neurons that can provide reani-mation through electrical stimulation to paralyzed muscles; creation of a cardiac output monitor using modern optical technology for minimally invasive monitoring; and develop-ment of implantable microsensors for monitoring patient chemistry.

Start-Ups

• Response Genetics Inc. was founded in 1999 to commer-cialize medicines based on USC breakthrough patented technology for extracting genetic information from formalin fixed paraffin embedded clinical trial samples. Prior to the discovery of RGI’s patented method, it was only possible to extract meaningful genetic information from RNA through fresh frozen specimens, not those fixed and stored in paraf-fin. Currently, some of the world’s largest pharmaceutical companies outsource pharmacogenomic analysis to RGI.

• Abraxis BioScience Inc., an integrated biopharma company, was granted an exclusive worldwide license by USC to develop and market a portfolio of diagnostic protein biomarkers for therapy response, therapy toxicity and disease recurrence in colorectal cancers. These protein-based nanoparticle chemotherapeutic compounds (ABRAX-ANE) are based on a proprietary tumor targeting system.


Stanford University

NIH-funded research yields promising discoveriesIn 2006, Stanford University secured $315 million in NIH funding, which contributed to advancing a number of major research discoveries. Of 5,386 inventions, 1,422, (about 26 percent) were funded by the NIH. Of the 1,422 treatments, 340 (24 percent) were licensed commercially.

Katharine Ku, director of the Office of Technology Licensing (OTL) at Stanford University, provides insight on promising areas of innovation. “We believe the interdisciplinary inven-tions connected to biology and medicine are the most promis-ing. Often there are physical science embodiments developed to solve a biological problem, so we’re finding very interesting innovations where there isn’t really a developed industry as yet.”

Stanford research drives quality-of-life improvements in thefollowing areas:

• Downsyndrome Institute: National Institute of Child Health and

Human Development Stanford researchers discovered that treatment with

pentylenetetrazole improved learning and memory skills and enabled the mice to better identify novel objects and navigate a maze using a mouse model of Down syndrome. These findings suggest that pentylenetetrazole might help treat humans with Down syndrome. Planning is under way to consider a clinical trial in humans.

• RNApolymerase Institute: National Institute of General Medical

Sciences, the National Institute of Allergy and Infec-tious Diseases, and the National Cancer Institute

Stanford researcher Roger Kornberg discovered the mechanism behind the operation of the enzyme RNA polymerase, which is responsible for transcription, the transmission of information in DNA into RNA. Kornberg’s findings, for which he was awarded the Nobel Prize, have had a profound impact on biology, helping to explain how cells operate normally and abnormally.

• RNAinterference Institute: Institute of General Medical Sciences Stanford researcher Andrew Fire discovered RNA interfer-

ence (RNAi), whereby researchers can selectively silence a particular gene, preventing its expression. Fire was awarded the Nobel Prize for his work. Trials are already under way in animals in RNAi-based treatments for high cholesterol, cancer, HIV and hepatitis.

• Diabetes Institute: National Institute of Diabetes and Digestive

and Kidney Diseases Stanford researchers discovered that a protein called

calcineurin promotes the development of insulin-produc-ing beta cells in the pancreas and regulates 10 genes that have been shown to be associated with diabetes. Under-standing the role calcineurin plays in diabetes could lead to new drugs and possibly even stem cell treatments.

• Braindevelopment Institute: National Institute on Deafness and Other

Communication Stanford researchers discovered that adult owls adapt better when taught in small steps as opposed to a single larger dose of training. The owls were fitted with special glasses that shifted their view of the world, making it difficult for them to match up their auditory and visual maps. Owls whose vision was shifted in gradual steps did better at making adjustments than those whose vision was changed in a single, large step. This finding could help doctors devise better treatments for adults with brain injuries; for instance, it may help physical therapists treat adults more effectively after a stroke.

• Asthma Institute: National Cancer Institute Stanford researchers discovered a novel gene family,

called the Tim family, that appears critical to the devel-opment of asthma in mice. They are now investigat-ing whether the same gene family is also linked to the development of asthma in humans. They also found that the Tim-1 gene encodes the hepatitis A receptor gene, which may explain why hepatitis A infection is associ-ated with prevention of atopy and asthma. The finding could enhance treatment and diagnosis of the more than 15 million Americans who suffer from asthma, and may also explain why incidence rates have climbed rapidly in industrialized countries during the past two decades as hepatitis A infection rates have dropped.

• Usingmicroarraytechnologytoaddresscancer Institute: National Cancer Institute Using the DNA microarray technology developed at

Stanford in 1995, researchers were able to examine 8,000 human genes in 60 different cancers to determine patterns of gene expression. The technology helped them sort the cancer cells by type and also helped determine which of the cells were more sensitive to different drugs.

26

As scientists better understand the nature of each type of cancer cell, doctors can develop more effective, targeted treatments for the various types of cancer.

• Skincancer Institute: National Institute for Arthritis and

Musculoskeletal and Skin Diseases Researchers isolated the gene for basal cell carcinoma, a

form of skin cancer that affects about 750,000 Americans each year. The gene, known as patched, acts in opposition to another gene that controls cell growth and develop-ment. Pinpointing the gene responsible for this type of skin cancer makes it possible for scientists to develop more effective therapies. The following year, the researchers developed the first mouse model for the disease, which indicated that basal cell carcinoma could result from a single mutation. The finding suggests that basal cell carcinoma could be easier to conquer than other forms of the disease.


Research Highlights

The Scripps Research Institute

NIH funds help transform pure research into healthcare applicationsDr. Polly Murphy, senior vice president for business and scien-tific services at The Scripps Research Institute (TRSI), oversees the commercialization of technology invented at one of the world’s largest private, not-for-profit research organizations.

TSRI has been very successful in obtaining large program grants from the NIH. Approximately 74 percent of the total funding to TSRI comes from the NIH. This totalled $214.3 million in 2006.

Major TSRI scientific achievements funded with NIH supportTSRI researchers have conducted numerous seminal studiesinto the basic biology of molecules and cells. The following listrepresents a few of TSRI’s most significant advances of thepast decade:

• Developedandsuccessfullytestedtheanti-leukemiadrug2-Chlorodeoxyadenosine (2-CdA, trade name: Leustatin).

• Demonstratedthatrheumatoidfactorisaproductofananti-body gene that has maintained its “germlike” arrangement, explaining why so many rheumatoid factors are so similar.

• Developedanewandefficientmethodtoproducedisease-fighting proteins, called monoclonal antibodies, an advance that is expected to have a profound impact on pharmaceu-ticals and the treatment of disease.

• Determinedthecomplete,three-dimensional,atomicstruc-ture of the poliovirus.

• Pioneeredtheconceptthatsmall,syntheticpeptides—thebuilding blocks of protein structures—can replace larger peptide chains of bacteria and viruses to make vaccines.

• Clonedthegenefortheenzymethatisdeficientinpeoplewith Gaucher’s disease and developed a method to predict the severity of the disease (a potentially fatal inherited disorder).

• PurifiedtheantihemophilicFactorVIII,acoagulationproteinlacking in people with hemophilia A. Monoclate, the purified concentrate of Factor VIII, enables hemophiliacs to receive blood plasma that is free of virus contamination.

• Synthesizedsurfactant,alungmaterialthatkeepsairsacsopen and prevents respiratory distress syndrome, a major cause of death of premature babies and adults.

Stanford license agreements

2006

Stanford new license agreements 109

Royalty revenue $61.3 million

Royalty producing inventions 470

Active inventions 2,600


Product Company Indication

Humira Abbott arthritis, psoriasis

Monoclate Behring hemophilia

Leustatin Johnson & Johnson hairy cell leukemia

Monolert Meridian Diagnostics Epstein Barr virus diagnostic test

CMV-FA Meridian Diagnostics CMV diagnostic test

Ortho-Mune Ortho Diagnostics Epstein Barr virus diagnostic test

Products on the market based on TSRI technology

Yearly start-ups:

Total licenses granted:

2002 2003 2004 2005 2006

4 4 6 0 4

2002 2003 2004 2005 2006

67 80 99 105 105

• Pioneeredthedevelopmentofcatalyticantibodies—antibod-ies designed to function as enzymes in catalyzing specified chemical reactions—opening new possibilities for protein synthesis and the rational design of new drugs.

• Mappedtheprohormoneforsomatostatininthebrainandassociated it with the primary neuropathic signs of Alzheim-er’s disease.

• Discoveredacellreceptorforallergy-inducingIgEantibod-ies on lymphocytes, a finding that redirected research on the control of allergic diseases.

• Designedandsynthesizedanewclassofmolecules,knownas enediynes, which represent some of the most potent anticancer agents ever tested and demonstrate unusual selectivity in their ability to destroy cancer cells while leaving healthy cells intact.

• Solvedthethree-dimensionalstructureoftheenzymesuperoxide dismutase (SOD), thereby establishing a direct link between mutations in the gene for SOD that lead to an unstable, less active enzyme and can cause amyotrophic lateral sclerosis (ALS), or Lou Gehrig’s disease.

• Completedthetotalchemicalsynthesisoftheanti-cancerdrug Taxol, approved by the FDA for the treatment of ovarian cancer.

• Solvedthethree-dimensionalstructureoftheTcellreceptor,a key component of the immune system. Understanding its structure and function may enable scientists to enhance the effectiveness of the immune system through the develop-ment of new, highly targeted therapeutics.

• ElucidatedtheX-raycrystalstructureofamembranetrans-porter protein, a finding that could be useful for improving cancer therapy and fighting antibiotic resistant bacteria.

28

California Institute of Technology

NIH funds spur innovative approaches to treatmentNIH-sponsored research at the California Institute of Technology (Caltech) in Pasadena benefits society in important ways includ-ing targeting and personalizing cancer therapy, creating more effective means to address nicotine addiction, unlocking the secrets of how we grow, raising hope for rejuvenating human cognition after brain injury or disease, and paving the way for development of sensitive diagnostic tools.

Nanomedical cancer therapy developedNational Cancer Institute funding has made possible the development of custom-designed, cancer-fighting nanopar-ticles by Mark Davis, Ph.D., the Schlinger professor of chemical engineering at Caltech. The nanoparticle treatment, currently being used in clinical trials at nearby City of Hope hospital, are built to deliver chemotherapy drugs to tumors in such a way that the adverse effects of the drugs on the rest of the body are minimized, such as loss of hair or suffering nausea. Less than one-thousandth the diameter of a human hair, the particles are big enough to avoid being washed out of the body by the kidneys and small enough to pass easily through the new veins and capillaries of a tumor, where they can unload their chemical treatment.

Confronting addiction at the genetic levelWith a five-year, $4.6 million grant from the National Institute on Drug Abuse, Caltech is leading a program aimed at discover-ing medications aimed either at helping people avoid nicotine addiction or at helping smokers to quit. Henry Lester, Ph.D., the Bren professor of biology and current chair of the Caltech faculty, is directing the project, which is called a “National Cooperative Drug Discovery Group in Smoking Cessation.” Lester’s group is developing new strains of mice, each exagger-ating the action of a particular nicotinic receptor subtype. The researchers plan to define the behavior of the mice and of nerve cells in these mice as they respond to nicotine and to candidate smoking-cessation drugs. Dr. Lester’s group has an established track record in the study of nicotine addiction. Experimental results with “knock-in” mice, published in Science in November 2004, indicated that specific drug interventions for addressing nicotine addiction are, in principle, very possible to design.

Imaging developmentally important genesAn $18 million grant from the National Human Genome Research Institute has created a Center of Excellence in Genomic Science at Caltech, which is headed by Marianne Bronner-Fraser, Ph.D., the Ruddock professor of biology and principal investigator of the five year program. The center’s goal will be to image and mutate every developmentally important gene in vertebrates. Working with co-investigators Sean Mega-son and Scott Fraser, Ph.D., in Caltech’s Division of Biology, and Niles Pierce, D.Phil, an assistant professor of applied and computational mathematics and bioengineering, Dr. Bronner-Fraser says the center’s work will initially focus on the zebra fish because of its transparent embryo and its rapid development.

“Our goal is to create the digital fish,” says Dr. Megason, and “this will be a computer model of the genetic orchestra that transforms an egg into an embryo.” This objective is one of the primary challenges of the Center for Excellence in Genomic Science program, established to “encourage innovation and build a powerful new framework for exploring human health and disease,” according to NHGRI Director Francis S. Collins, Ph.D.

‘Thinking cells’ discoveredNational Institute of Neurological Disorders and Stroke Research Support contributed to the new understanding of individual neurons as “thinking cells,” discovered by neuroscientists from Caltech and UCLA. The discovery that a single neuron can recognize people, landmarks and objects—even letter strings of names for the same objects—was made by a research team headed by co-senior investigators Christof Koch, Ph.D., the Lois and Victor Troendle professor of cognitive and behavioral biology and professor of computation and neural systems at Caltech, and Itzhak Fried, M.D., Ph.D., a professor of neurosur-gery at UCLA’s David Geffen School of Medicine and a profes-sor of psychiatry and biobehavioral sciences at UCLA’s Semel Institute for Neuroscience and Human Behavior. The findings indicate neurons are able to function less like on-off switches and more like sophisticated computers. These results also may portend a day when cognitive prostheses can be constructed to replace functions lost due to brain injury or disease.

Molecular chemistry driving diagnostic sensor developmentNational Institute of General Medical Sciences funding for research undertaken at Caltech by Jacqueline Barton, Ph.D., the Arthur and Marian Hanisch professor of chemistry, has produced breakthroughs that provide the basis for sensitive diagnostic assays for cancerous transformations in tissue. As the first woman to receive the Willard Gibbs Award (2006) since Marie Curie in 1921, Barton was cited for her “major impact on the understanding of the molecular chemistry of DNA and its relevance to the development of a variety of diseases and inherited abnormalities.” Her pioneering application of transition metal complexes as tools to probe recognition and reactions of double-helical DNA has provided a new approach to the study of DNA structure and dynamics.


Research Highlights


Translational research in action

RNA technology research translates into promising medical therapies

Scientists first described RNA interference (RNAi) in the 1990s, and laboratories across the globe have been rushing to adopt this groundbreaking technology ever since. RNAi is a phenomenon whereby double-stranded RNA promotes gene-specific silencing. Cells recognize double-stranded RNA as an unwanted invader and trigger a series of responses to destroy it. Without RNA, genes cannot produce proteins and are effectively silenced. This powerful new technology shows tremendous promise for scientists seeking to better understand diseases and design medical treatments.

The potential applications of this research are vast. Investigators are testing RNAi-based treat-ments in many animal models of disease, including high cholesterol, HIV, cancer and hepatitis. Researchers also have launched clinical trials in humans suffering from specific types of macu-lar degeneration and pneumonia.

Dr. Andrew Fire, professor of pathology and of genetics at the Stanford University School of Medicine, shares the 2006 Nobel Prize in Physiology or Medicine for discovering RNAi. Dr. Fire’s research team found that certain RNA molecules can be used to “turn off” specific genes in animal cells.

“These advances affirm the importance of basic fundamental research, which often yields new insights into human biology,” said Philip Pizzo, M.D., dean of the Stanford University School of Medicine. “This discovery is already unfolding in new directions that may translate into discov-eries of new diagnostic and therapeutic approaches for a variety of human disorders.”

NIH funds supported all of the major work conducted in Dr. Fire’s laboratory, and several other prominent California researchers have made significant progress in the area of RNAi therapy and advancing the technology, all with the support of NIH funding.

Dr. Mark Kay, professor of pediatrics and genetics at Stanford University School of Medicine and director of Stanford’s program in human gene therapy, published the first results demon-strating that RNAi was an effective gene-therapy technique in mice. That finding launched widespread RNAi gene therapy research in both academic and industrial research groups.

A leader and pioneer in RNAi research, gene and nucleic-acid drug delivery and gene therapy, Dr. Kay was the first researcher to develop and demonstrate the efficacy of small interfering RNA (siRNA) in whole mammals. Scientists recognize Dr. Kay’s work on siRNA’s use to inhibit hepatitis B as a seminal step in the advancement of this technology. Dr. Kay attributes NIH funding for the success of this work.

“NIH funds have been critical and life supporting to me, allowing my research team to conduct the majority of our work,” Dr. Kay explained. “However, the current environment for NIH funding is the worst I have ever seen—much to the detriment of academics, which feeds the biotech and pharma pipelines.”

Perhaps most importantly, Dr. Kay explained, is that NIH funding cuts diminish California’s and the nation’s leadership roles in developing pharmaceuticals that help drive innovative technologies. “So much damage has been done; we have lost many exceptional scien-tists to other countries and are discouraging the best and brightest from enrolling in U.S. research programs.”

“Basic research yields major breakthroughs that ultimately lead to technologies that benefit public health,” Dr. Kay said. “Basic research truly drives innovation and will ultimately affect humanity. Researchers didn’t initially conduct RNAi research to discover disease treat-ments. This came afterward. Now we’ve discovered potentially widespread use of RNAi to treat human disease.”

When Dr. Kay came to Stanford in 1998, he was excited to learn that the institute was building a translational bridge between basic research and the clinic.

Dr. Kay was the scientific founder of the California-based company Avocel, which employed RNAi technology to precisely destroy RNA viruses and silence the expression of defective genes. NIH funding supported all of the research that lead to Avocel’s founding, and Stanford’s technology transfer process enabled the next step in the technology’s development.

30

The experience gave Dr. Kay a new perspective. “In academia,” he said, “the goal is to publish, mentor and educate. In biotech, the goal is to commercialize a product.”

NIH funding and collaboration

John Rossi, Ph.D., director of the department of molecular biology and dean of the Graduate School of Biological Sciences of the Beckman Research Institute of the City of Hope, is a world leader in the development of therapeutic applications of RNAi and HIV/AIDS clinical research.

Dr. Rossi’s major scientific contributions include furthering the understanding of RNA process-ing and metabolism inside the cell. One of his most notable projects is in the area of ribozyme research in AIDS, leading the research team that first suggested applying ribozymes to treat HIV infection. This research program led to two clinical trials in which ribozyme genes were trans-duced into hematopoietic stem cells for autologous transplant in HIV-infected individuals.

“Genetics and gene expression fascinate me, and I’ve long been interested in the promise of RNA technology,” Dr. Rossi said. “The NIH granted me a merit award for my ribozymes and HIV research and has continuously funded my research over 18 years.”

Dr. Rossi believes government funding plays a crucial role in fostering a collaborative envi-ronment. “Some program grants require industrial partners,” he explained. “Academic labs provide the fruits of labor to create a product, and industry reaps the benefits of great research. However, intellectual property issues are often problematic. Everyone wants to profit from IP.”

Dr. Frank Bennett, a company founder and senior vice president of research at Isis Pharma-ceuticals, is responsible for preclinical antisense drug discovery research. Dr. Bennett was involved in the development of antisense oligonucleotides as therapeutic agents, including research on the application of oligonucleotides for inflammatory and cancer targets, oligo-nucleotide delivery and pharmacokinetics. He also runs the company’s antisense mechanism program, which focuses on RNase H development, RNAi, micro-RNA and splicing.

Dr. Bennett believes strongly that the indirect benefits received from NIH funding are critical to Isis innovation, as well as to all biotechnology.

“The NIH funds the basic research upon which the industry is built,” Dr. Bennett explained. “Without this foundation, there is no industry. The NIH funds investigators, those investigators make discoveries related to disease, and as an industry we take this information and convert it into therapies that benefit patients.

“Scientists earn their degrees through NIH-funded institutions, and it is unlikely that I would be where I am today without its funding,” Dr. Bennett said. “Furthermore, post-doctorate gradu-ates go on to conduct further studies in NIH-funded labs under more specialized training. This environment has led to the discoveries that laid the foundation for industry, and it’s the mecha-nism for both education and products.”

Dr. Rossi adds that the NIH offers various funding mechanisms for industry that allow his research team to conduct high-risk projects that a company might have an interest in but does not consider a high priority. “This allows employees to pursue these ideas, and if they are successful, the company will pursue them further,” he explained. “If the researcher is not successful, the company loses no money.”

Dr. Rossi is also encouraged by recent scientific advances in the area of RNA silencing, which has been Isis Pharmaceuticals’ focus for 18 years.

“This gives us another way to develop therapeutics,” Dr. Rossi explained. “Because the biology behind this new RNA silencing pathway is very intriguing, it attracts top-tier scientists who can accelerate the ability to develop products that will help patients in the future. These are not just incremental improvements in human health, they are revolutionary transformations.”

Dr. Rossi said the company’s goal is to revolutionize how diseases are treated rather than simply creating “me too” drugs. “Ultimately, when laboratories develop therapies that transform medicine, these therapies translate to commercial success.”


Impacts of Cuts in NIH Funding

NIH National Funding

Between fiscal years 1998 and 2003, NIH funding more than doubled to $27.1 billion benefiting the research projects described in this report, as well as hundreds like them. This funding increase reflected a growing U.S. economy, a federal priority placed on research as a tool to improve health outcomes and an interest in exploiting fresh lines of research opened up by the Human Genome Project. During the period, growing scientific opportunity led the number of NIH grant applications to grow 44 percent, from 24,151 in 1998 to 34,710 in 2003, as shown in Figure 3.


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

0

5

10

15

20

25

30

35

Num

ber

of g

rant

s

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Fiscal year

Suc

cess

rat

e (p

erce

nt)

Figure 3: Research project grant success rates fiscal years 1998 to 2007

By 2004, the tide had turned. Although the agency’s $28 billion budget for 2004 amounted to a 3.3 percent increase over the prior year, it was flat when adjusted for inflation. President Bush’s budget request for fiscal 2008 called for $28.9 billion, which was $379 million less than the NIH received in 2007. Moreover, because the president’s budget request included a $201 million funding transfer, the actual 2008 research decreased by $581 million.

Even while the budget stalled and began to erode, the number of grant applications continued to rise to a new high of 47,455 in 2007. The percentage of applications the NIH funded dropped sharply, to 21 percent in 2007 from 32 percent in 2001. The swelling number of grant applicants, along with rising research costs and increases in the aver-age size of grants awarded, has meant that NIH resources are increasingly stretched. This severely hampers fundamental scientific research and limits the flow of medical innovation capable of transforming healthcare.

Also of growing concern is the age distribution of NIH research project grantees compared to medical school faculty from 1980 to 2006. The Research Project (R01) grant is a four- to five-year NIH award that supports discrete projects in areas representing the investigator’s particular interest and competencies, based on the mission of the NIH.3 The first public

3 National Institutes of Health, Office of Extramural Research

32

grant faculty members earn is a critical step in their academic careers. The average age at which an investigator first obtains R01 funding has increased by five to six years (to 42 years old for Ph.D. degree holders and 44 years old for M.D. and M.D./Ph.D. degree holders) since 1980.

In addition, although the overall numbers of new R01 investigators have increased, the proportion of R01 grants awarded to new investigators has remained at approximately 6 percent of the total R01s awarded throughout the doubling of the NIH budget. Industry analysts advise that both the NIH and universities should work to increase the proportion of first-time investigators who receive funding. Without a healthy influx of new investi-gators who bring fresh ideas and pioneer novel areas of investigation, the pipeline for biomedical innovation is at risk.

The 2008 CHI/PwC NIH Supplement Survey revealed important differences with regard to who was most able to obtain funding. All applicants had low success rates with their first submittals and, overall, the data showed an 18 percent increase in the average number of submissions required to receive NIH funding. The data further showed that the average number of submissions for experienced faculty (those with more than 10 years of experience) increased by 23 percent from 1998 to 2004. In the same period, developing faculty (those with fewer than 10 years of experience) saw a 10 percent increase in required submissions.

Figure 4: On average, how many submissions did you write before receiving funding from NIH?

Experiencedfaculty

Developingfaculty

Allfaculty

Average 1998 to 2003

Average 2004 to 20070.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Table 4: Average number of submissions needed to receive NIH funding



Percent increase

> 10 year faculty 2.56 3.14 23%

< 10 year faculty 2.39 2.64 10%

All faculty 2.46 2.91 18%


Overall, the increase in submissions prolongs the time it takes faculty to win funding by nine to 12 months. As a practical matter, this means that established scientists must spend more time preparing grant applications—not conducting critical scientific research—and, on average, must submit applications two or three times to obtain an award.

NIH funding by state

The NIH supports research in every state in the United States. In 2007, California received more NIH funding than any other state, with 7,357 awards totaling $3.16 billion. While still the largest allocation in the U.S., this figure represents virtually flat growth compared to 2006.

Figure 5: Top 10 NIH grant funding recipient states fiscal years 2006 and 2007 (millions of dollars)


California

Massachusetts

New York

Pennsylvania

Texas

North Carolina

Washington

Illinois

Ohio

$3,143$3,163

$2,204$2,236

$1,898$1,935

$1,392$1,399

$1,077$1,083

$933$931

$813$786

$694$724

$627$628

2006

2007

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500

Maryland $999$977

Total NIH grant funding (all awards)

California’s share of the funding was 41 percent more than the second-largest recipient state, Massachusetts, which received $2.23 billion (Figure 5). As the top recipient of NIH funding, California received 15 percent of all NIH grants distributed nationwide in 2007. All states consistently received less NIH funding from 2005 to 2006, and, as shown in Figure 5, funding remained virtually flat for every state from 2006 to 2007.

Between 1998 and 2003, NIH funding to California more than doubled, in nominal dollars, in line with national increases in NIH funding. Beginning in 2005, however, NIH funding to California decreased and, in real terms, adjusted for inflation, was below 2003 fund-ing levels, as shown in Table 5. The downward trend in funding continued in 2007 and is expected to remain on this path until Congress increases funding to the NIH.

34

As shown in Figure 6, California’s share of total U.S. NIH funding decreased from 16 percent in 2004 to 14.3 percent in 2005 and to 15.1 percent in 2007. The transfer of a major Science Applications International Corporation (SAIC) grant out of state was the primary reason for the sudden decrease of California’s share of total U.S. NIH funding between 2004 and 2005.

Although training grants and fellowships increased in absolute terms between fiscal years 1998 and 2005, training grants and fellowships—both nationally and for California—have decreased as a share of total NIH funding in recent years. Nationally, funding declined from 3.9 percent in fiscal year 1998 to 3.7 percent in fiscal year 2007, and from 4 percent in 1998 to 3.7 percent in 2007 for California (see Table 3, page 19).

Grant renewal and duration

The 2008 CHI/PwC NIH Supplement Survey revealed that 235 survey respondents have 10 or more years experience working on NIH grant projects, covering two sub-periods of NIH activity: 1998 to 2003 and 2004 to 2007.

Another clear demonstration of the impact of diminished NIH funding on the state appeared in the survey participants’ responses to questions about the amounts, dura-tion and renewal efforts associated with NIH grants awarded for the periods 1998 to 2003 and 2004 to 2007 (Figures 7 through 9). When comparing the two periods, respondents

Table 5: California’s NIH funding fiscal years 1998 to 2007 (millions of dollars)

California’s NIH funding 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Nominal amount $1,662 $1,933 $2,248 $2,497 $2,905 $3,386 $3,613 $3,301 $3,143 $3,163

Real (2007 dollars) amount $2,114 $2,406 $2,707 $2,923 $3,348 $3,163 $3,996 $3,505 $3,291 $3,163


200713

14

15

16

17

Sha

re o

f U.S

. fed

eral

fund

ing

(per

cent

)

20062005200420032002

15.0%15.1%

16.0%

15.6%

14.3%

15.3%

2001200019991998

15.0%

15.3%15.1%

14.9%

Year


Figure 6: California’s share of total U.S. NIH grant funding


Figure 8: Average duration of grants versus duration applied for between the time frames 2004 to 2007 and 1998 to 2003

Longer Same Shorter0

10

20

30

40

50

60

70

80

90

Per

cent

of r

esp

ond

ents

Figure 7: Average value of NIH awards received versus awards applied for between the time frames 2004 to 2007 and 1998 to 2003

Higher Same Lower0

10

20

30

40

50

60

70

Per

cent

of r

esp

ond

ents

noted that the value of awards received was more often lower than what was applied for between 2004 and 2007 (Figure 7). While there was no significant change from year to year in the number of respondents receiving higher awards, in 1998 to 2003, almost double the number of respondents received an award equal to that for which they applied. In 2004 to 2007, this trend shifted, and nearly double the number of respondents received awards lower than the amount for which they had applied.

Figure 8 illustrates the duration of the NIH grants for the periods 1998 to 2003 and 2004 to 2007. More grantees in 2004 to 2007 reported receiving NIH funding for a shorter than requested duration. As the NIH budget continues to diminish, grant durations will also continue to shorten, leading researchers to spend more time reapplying for NIH funding, reaching out to additional sources of funding or abandoning valuable projects altogether. As a result, research suffers as more time is spent locating and securing funding sources.

36

Yes No0

10

20

30

40

50

60

70

80

Num

ber

of r

esp

ond

ents

Figure 9: For work that has come up for renewal in the periods 2004 to 2007 and 1998 to 2003, did you have to submit multiple times before being awarded a renewal?

Figure 9 illustrates the grantee effort associated with obtaining grant renewals for the periods 1998 to 2003 and 2004 to 2007. Among the NIH grantees who obtained renewals, multiple submissions generally were more common in the period 2004 to 2007. Survey responses indicate a dramatic shift between the two periods—in 1998 to 2003 approxi-mately one-third of grantees had to submit multiple times to receive funding for renewals, but in 2004 to 2007, more than two-thirds of the grantees had to submit multiple times to receive renewals.

Data from Figures 7 through 9 indicate that the NIH is granting a high percentage of awards for shorter periods of time and for lower than expected amounts. Simultaneously, the process requires multiple submissions to secure funding. These factors indicate that biomedical innovation may slow in the coming years as investigators spend more time preparing grant applications and have fewer assurances in their planning, scheduling and budgeting processes.


Dr. Paul Schimmel is a leading expert on molecular biology, biochemistry and enzymology. As a member of the faculty of The Scripps Research Institute (TSRI), Dr. Schimmel’s work has focused on decoding genetic information in translation, protein-RNA recognition and the connections between translation and cell signal-ing. Dr. Schimmel is one of the few scientists to study both nucleic acids and proteins, and his laboratory was one of the first to identify the operational RNA code for amino acids—perhaps the original code of life. Dr. Schimmel is the Ernest and Jean Hahn Professor of Molecular Biology and Chemistry at The Skaggs Institute for Chemical Biology at TSRI. He was formerly the John D. and Catherine T. MacArthur Professor of Biochemistry and Biophysics in the Department of Biology at MIT. As a distinguished author or co-author of more than 400 scientific papers and a widely used, three-volume textbook on biophysical chemistry, Dr. Schimmel was honored with membership in the Ameri-can Academy of Arts and Sciences, the National Acad-emy of Sciences, the American Philosophical Society and the Institute of Medicine.

Long interested in the application of basic biomedical research to human health, Dr. Schimmel is a co-founder or founding director of 11 biotechnology companies, of which three were sold in private transactions, one is still privately held and seven are publicly traded. These companies are developing groundbreaking new thera-pies for human diseases and disorders. In recognition of these efforts, Dr. Schimmel was awarded the Chinese Biopharmaceutical Association’s Brilliant Achievement Award and named the “Best Entrepreneurial Scientist of the USA” by the Europe-based Science Alliance and Technopolicy Network.

On the significance of NIH funding to scientific research

NIH funding has transformed medicine. It enables individual investigators to focus on important scientific questions rather than on a company mission to appease shareholders and increase profits. The knowledge gleaned through NIH-funded basic research finds its way to society and improves human health; however, the biotech industry devotes very few of its research dollars to basic science. For example, at Merck, about 1 percent of its $5 billion budget was allocated to basic research. Conversely, at TSRI, nearly $200 million in NIH funds supported basic research.

Virtually the entire biotechnology industry was built on NIH funding; it’s the backbone of the industry and of clinical research. The NIH is perhaps the most successful government agency dedicated to the public welfare. This is a clear case of

taxpayers investing dollars and seeing tremendous returns on their investment, considering the hundreds of thousands of jobs NIH funding has created and the millions of people who owe their health—if not their lives—to NIH-funded discoveries. When legislators cut budgets, NIH funding is certainly the last place they should look.

The NIH is the core of research innovation, and private foun-dations and other sources of funding add layers to the core infrastructure that the NIH has built during the past 50 to 60 years. Without the NIH and its proactive funding of individual investigator awards, the system cannot function—at least not as we have known it. And it certainly cannot function as it was originally envisioned back in the Eisenhower/Kennedy era.

On a personal level, the NIH has supported nearly 100 percent of my research. The research I have conducted and the discoveries I have made would not have been possible without NIH support.

On the long-term, unintentional effects of reduced NIH funding in California

I think the biggest effect I have seen—and my laboratory is pretty typical—is that seven or eight years ago, U.S.-educated Americans comprised 80 percent to 90 percent of my students. Since that time, the ratio has reversed completely. Now, 80 percent of my students are foreign-born, and I expect this number may soon reach 100 percent. Interest in biotech research among American-born students has diminished tremendously because potential students are discouraged by the limited research funds, and believe there is no future in publicly funded research. Therefore, talented American students are increasingly deserting the public research arena for the private sector. This migration of American talent has created great opportunities for students from Asian countries, who are quickly filling the research positions in our institutes.

The talent emerging from Asia is phenomenal, fostered by robust government-funded programs. Singapore for example contributes $500 million to educate their best students for eight years of study at the top universities in California. That, combined with the diminished NIH funding for American students, is causing U.S.-born students to ask themselves, “what’s the point?” They cannot secure financial support and they have to compete with a very talented pool of foreign students.

Perspective

Dr. Paul Schimmel“American students are

discouraged, and I believe

that cutting NIH funding has

created a tremendous unin-

tended effect that legislators

need to understand. Unfor-

tunately, I do not think this

trend is going to change.”

38

Call to Action for California’s Continued Scientific Excellence

California has long been the chosen destination of inventors and contrarians, the ambitious and the restless, the creative, the curious and the brilliant. It is fitting, then, that the Golden State has become renowned for its research and innovation. The more than 100 academic research centers that call California home, and the thousands of researchers—students and faculty alike—have endowed the state with a reputation for breakthrough discoveries, disruptive technologies and revolutionary inventions that have benefited human life around the world.

While California researchers have changed every facet of human endeavor, the focus of this report is on biomedical advances. Here we celebrate the lifesaving therapies, diagnostic tools, drug delivery systems and medical devices that have flowed from our universities and research centers. We are awed by the contributions California scientists have made to scientific knowledge. We applaud the foresight and entrepreneurial spirit that has spawned entire new disciplines of science and conceived previously unimag-ined biomedical industries. And we are committed to supporting California’s continued leadership in science, engineering and medicine in the most effective and proven way we know: sufficient funding of basic research at the university level.

As we have illustrated through interviews and summaries in this report, academic research grants enable highly talented researchers to make discoveries that lead to products and therapies that serve patients everywhere. Simultaneously, those grant dollars accomplish so much more. They create a learning environment for current advanced degree students. They improve the educational facilities and opportunities for future scientists, doctors, mathematicians and engineers. They yield discoveries that can be patented and out-licensed, raising critical funding for the universities. They define technology platforms that become the launch pads for new companies and for new industries that employ workers from every sector of the economy. Added jobs and vital products help drive the state’s and nation’s economies.


Since the 1950s, NIH grants have provided stability for the research community and a backbone for state and local economies. The period from 1998 to 2003 saw a doubling of the NIH budget and the initiation of a new wave of enthusiasm and success among researchers. The added funds and opportunities encouraged young scientists to pursue careers in academic research. More funding enabled researchers to “follow the science” in countless new directions. And the NIH’s encouragement of multi-disciplined teams saw the creation of highly complex and highly productive projects.

Since 2003, however, funding has flattened out and, given inflation, actually begun to drop. Currently, with a soaring federal deficit, growth in defense and entitlement spend-ing and a looming recession, NIH funding over the next few years is severely threatened.

The NIH funding cuts significantly impact investigators as the earlier doubling of the budget drew record numbers of applicants. Competition is fierce and diminishing funds mean researchers have a lower chance of getting their projects funded. Those that do succeed must first make numerous submittals to gain approval. And the grants are more likely to be for lesser amounts and for shorter time frames than originally requested.

Over time, longer, more tenuous proposal cycles will have negative downstream impli-cations for future local workforce development and, ultimately, sustained innovation. Furthermore, funding constraints prohibit faculty from maintaining sufficiently staffed laboratories and limit them from hiring qualified younger researchers.

We believe that NIH funding is critical to California’s continued global leadership and biomedical innovation. We urge legislators, policy makers and thought leaders to support us in advocating for increased funding for basic research through the NIH and other agencies to speed fundamental scientific discovery and broad-based medical innovation.

40

Methodology and Sources

Survey

PricewaterhouseCoopers, with support from the California Healthcare Institute, administered a survey for the NIH Supplement to the 2008 California Biomedical Report. Pricewater-houseCoopers provided a secure and confidential Web-enabled questionnaire. Participants’ data were captured by the Web site and loaded into a database, which was then downloaded for formatting and analysis by PwC. The survey was conducted in the fall of 2007. A total of 468 academic researchers including 274 males (60 percent) and 184 females (40 percent); 10 persons (2.1 percent) did not indicate gender. Data were obtained from five prominent institu-tions, geographically dispersed throughout the state of California: Burnham Institute for Medi-cal Research, California Institute of Technology, Stanford University, University of California System and University of Southern California.

The faculty exhibited balanced lengths of total service as faculty members, distributed as follows: one to three years (22 percent), four to six years (15 percent), seven to 10 years (12 percent), 10 to 15 years (17 percent) and more than 15 years (34 percent). Faculty members with less than 10 years experience total 49 percent of the respondents, while faculty members with greater than 10 years of experience as faculty were at 51 percent.

NIH funding

DataData for this analysis come from the National Institutes of Health Office of Extramural Research, available at http://grants2.nih.gov/grants/award/awardtr.htm. The data include all awards to California from NIH, some of which do not necessarily fund basic biomedi-cal research. For example, some grants were used for training programs and projects that are designed to support the research training of scientists for careers in the biomedical and behavioral sciences, as well as to help professional schools to establish, expand, or improve programs of continuing professional education. Other grants were used to fund health policy or behavioral science research. Despite these caveats, overall the NIH grant funding demon-strates the federal commitment to health science research in California. MethodologyData are summarized by state and congressional district over time. In the case of state data over time monetary time series data are adjusted for inflation using the CPI. Nominal dollars are inflated to real 2006 dollars using the calculation at http://data.bls.gov/cgi-bin/cpicalc.pl. The most recent year for which NIH grant data to states is available is 2006.

Life sciences patent data

Information on life sciences patent data was obtained from the U.S. Patent and Trademark Office, Patenting by Geographic Region, breakout by Technology Class, http://www.uspto.gov/web/offices/ac/ido/oeip/taf/clsstc/regions.htm.

Life sciences doctorate degrees per 100,000 people

This information was obtained from the National Science Foundation’s report on 2005 Doctorate Awards, www.nsf.gov/statistics.

The Better World Project

The Association of University Technology Managers launched the Better World Project in 2005 to promote public understanding of how academic research and technology transfer have improved lives and made the world a better place. The project is composed of in-depth articles about successful startup companies, spin-offs from academic research that have changed the world and technology transfer success stories—innovations that have gone from academic research to realization in the market. For this report, we obtained permission to reprint several accounts (as noted on their respective pages) that exemplify successful launches from California institutions. The highlighted projects depended on NIH funds for most of their preliminary research.

Report Authors

David L. Gollaher, Ph.D. President and CEO California Healthcare Institute

Tracy T. Lefteroff Global Managing Partner Life Sciences Industry Services PricewaterhouseCoopers LLP

Project Team Nicole Beckstrand California Healthcare Institute

Molly Ingraham California Healthcare Institute

Writing Nicole Stephenson PricewaterhouseCoopers LLP

David SalineroPricewaterhouseCoopers LLP

Copyediting Robert Cone PricewaterhouseCoopers LLP

Economic Analysis Jack Rodgers PricewaterhouseCoopers LLP

David CoppersmithPricewaterhouseCoopers LLP

Andrew PorterPricewaterhouseCoopers LLP

The California Healthcare Institute

The California Healthcare Institute is a non-profit public policy research organization for California’s biomedical R&D industry. CHI represents more than 250 leading medical device, biotechnology, diagnostics and pharmaceu-tical companies and public and private academic biomedical research organizations. CHI’s mission is to advance responsible public policies that foster medical innovation and promote scientific discovery.

California Healthcare Institute1020 Prospect Street, Suite 310La Jolla, California 92037phone: (858) 551-6677fax: (858) 551-6688

www.chi.org

PricewaterhouseCoopers Pharmaceutical and Life Sciences Industry Practice

Through our long-standing leadership in the pharmaceutical and life sciences industry, PricewaterhouseCoopers has the resources, the expertise and commitment to help you grow and prosper. We provide assurance, tax and advisory services, as well as specialized capabilities to help our clients access financing, attract and retain key talent, manage risk and regulatory compliance, improve performance, and support transactions. The firm draws on the full knowledge and skills of more than 145,000 people in 150 countries who connect their thinking, experi-ence and solutions to build public trust and enhance value for clients and their stakeholders.

For more information, please contact:Tracy Lefteroff, PartnerPricewaterhouseCoopers LLP10 Almaden Blvd.San Jose, CA 96113Phone: (408) 817-3700Fax: (408) 827-5050

www.pwc.com/pharma

NIH Study Group

Andrea Moser Vice President, CommunicationsBurnham Institute for Medical Research

Ann GosierVice President, Government Affairs and Public PolicyBD Biosciences

William RhodesPresident, Cell AnalysisBD Biosciences

David BrownUniversity of CaliforniaDirector of Health and Clinical Affairs

David GollaherPresident and CEOCHI – California Healthcare Institute

Hall DailyAssistant Vice President, Government and Community RelationsCalifornia Institute of Technology

Janet Lynch LambertVice President of Government RelationsInvitrogen Corporation

Jeff HallOffice of Health AffairsUniversity of California

Jennifer GrodskyDirector, Federal RelationsUniversity of Southern California

Polly MurphySenior Vice President, Business and Scientific ServicesThe Scripps Research Institute

Ryan AdesnikDirector, Government Relations, School of MedicineStanford University

Todd GillenwaterVice President – Public PolicyCHI – California Healthcare Institute

Tony LakavageDirector, Government Affairs and Public PolicyBD Biosciences

www.pwc.com/pharma© 2008 PricewaterhouseCoopers. All rights reserved. “PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. BS 08-0376

www.chi.org

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The National Institutes of Health (NIH): Fueling Healthcare Innovation in California · 2017. 3. 13. · The National Institutes of Health: Fueling Healthcare Innovation In California