Is it possible to solve a developing-world pandemic or other similar disease that afflicts the poor and still get rich?
One might have to choose between one or the other, say experts. Certainly, the biotech industry is full of doctors and scientists who are passionate about solving developing world problems and have humanitarian concerns. New England — the Boston-Cambridge area in particular — offers perhaps unmatched resources to solve the developing world’s health problems.
“We pride ourselves that we’ve built this ecosystem here to do science, and the best and brightest come here,” said Nina Dudnik, CEO of Cambridge-based Seeding Labs. This nonprofit acts as a third party to connect resources, such as used laboratory equipment and talent, between more developed nations and poor, rural and emerging countries.
On the other hand, these projects require money and years of work both in research and development, and then in sales and distribution. Venture capital companies that bankroll biotech startups are not necessarily looking to improve the world as part of their primary goal. “From a pure run-of-the-mill venture capitalist perspective, we get paid by people who are expending money for a return and if they can’t find that, the economic model is hard to prove,” said Terry McGuire, managing partner at venture capital firm Polaris Venture Partners. One venture capitalist and CEO was even more blunt. “You shouldn’t use investor dollars for humanitarian work, because you have a fiduciary duty to try to maximize return on investment,” noted Douglas Fambrough, CEO of Dicerna Pharmaceuticals Inc., based in Watertown. He is also a venture partner in the venture capital firm Oxford Bioscience Partners, based in Boston. “The only way you could do such work is if it did not have any material effect on your business. For a large pharma you can make that argument, for a small biotech you cannot.”
Indeed, devoting resources to such charitable tasks generally is beyond what a startup is even capable of, noted Geoff MacKay, president and CEO of Organogenesis Inc. The Canton-based biotech manufactures skin treatment products and reports that it is already profitable. “It’s usually not something we focus on when we’re trying to prove the viability of a technology. Young companies are struggling to match great science to a proven business model,” he says.
For those inventors that perhaps want to develop a low-cost vaccine or other minimal cash return on an investment-based solution, there are some avenues. One way to do it is through launching a nonprofit organization that doesn’t expect a big payoff, said Robert Lanza. Lanza is chief scientific officer of Advanced Cell Technology Inc., a biotech founded in Worcester that recently moved to Marlborough that develops regenerative stem cell products. However, with a nonprofit firm, one faces the problem of limited resources.
“It’s tough to really make a huge effort without the usual traditional resources of a large company or a foundation,” he said. “It’s too bad, there really should be ways to have other resources for those efforts.”
On the other hand, a lucky few scientists do work at large companies that can freely devote resources to a given cause, such as curing leprosy. Giant pharmaceuticals can absorb such efforts in the “broader budgets of the company,” noted MacKay. However, distribution of high-end drugs or biotech products is also complicated. The patients themselves need to be properly diagnosed before they can receive some treatments. For instance, in the case of Organogenesis’ Apligraf ulcer treatment technology, said MacKay, it’s not just a matter of making it available to the Third World. It also requires specialized and trained staff to apply it. In fact, the company wanted to donate the product to Haiti’s earthquake victims, but the level of wound care available there was simply too basic for it to have been feasible, he said.
For those that are still determined to do public good, one starts by reviewing one’s business model, according to Dudnik. For instance, if a drug is applicable globally (perhaps an HIV vaccine), companies could partner with non-governmental organizations to get it to the Third World markets at a lower price than it would be available in Europe or North America.
Presumably, if a firm were able to distribute enough of a given drug for a widespread problem like malaria, it is also possible that economies of scale might make it profitable, she said. This applies to existing commodities, such as shampoo bottles today, and the economic principle would no doubt work with biotechnology, as well.
Similarly, companies can donate their intellectual property to a group such as the World Health Organization, said Dudnik. (For instance, in 1987, pharmaceutical giant Merck and Co. donated its drug ivermectin to treat river blindness on an as-needed basis). The pharmaceutical would be responsible for the cost and efforts around developing the drug, while WHO would see to delivery.
Moreover, a researcher might consider applying for government grants or turning to charitable institutions, such as the Bill & Melinda Gates Foundation, noted McGuire. Some of those foundations specialize in treating specific ailments, such as a cystic fibrosis, so a startup or company seeking to find a cure to that disease might find a ready partner.
That is what ACT has done through its joint venture, Stem Cell & Regenerative Medicine International (SCRMI), said Lanza. Together with Sanaria Inc., a Rockville, Md.- based biotechnology company focused on malaria treatment, ACT applied for a grant with the Gates Foundation to use ACT’s cells for a malaria vaccine. “On our end, there is nothing in it for us. We put our resources into the grant and pushed it for humanitarian reasons,” said Lanza. Such activities depend on a company’s culture, and the mindset of its board of directors and other officers, he notes. Not every company is so inclined.
On a smaller scale, Organogenesis also supports charitable efforts in a number of ways. For instance, there are patients that “fall through cracks” in terms of being able to pay for Apligraf. Organogenesis offers an access program so that virtually anyone who needs the tissue product will receive it. It also sells Apligraf at a highly reduced cost for cosmetic product testing in Japan, which means animals that might be injured or killed in tests are spared, explains MacKay.
Ultimately, it’s up to individual companies to choose to make an effort. “You don’t have to be one of the largest companies to have a social impact,” said Dudnik.
“Smaller companies can have enormous impact too. Not just by giving away their products or partnering with international organizations but by reaching out to their counterparts — scientists and doctors from the developing world — and working together.”