By Rich Soll, Senior Advisor, Strategic Initiatives at WuXi AppTec (@richsollwx)

Over the last several years, the translation of academic research into new drugs has become a much riskier and challenging process. Projects are often perceived as too early for partnering by biopharma companies and biotechnology investors but are too advanced in scope for most academic researchers. 

Enter NYU Langone Medical Center’s drug discovery accelerator, the Office of Therapeutics Alliances (OTA), an innovative program that advances the discovery of novel therapeutic projects by combining the scientific strengths of the center’s investigators with the expertise of external professional drug discovery and development partners in the biopharma industry.

Leading this unique collaboration model to overcome the “translational gap” is Nadim Shohdy, Ph.D., Assistant Dean, Therapeutics Alliances, NYU Langone Medical Center. Since its founding in late 2013, the OTA has been on a mission to translate new discoveries into developmental therapeutics, including establishing contract research organization collaborations and engaging subject-matter experts. The virtual accelerator sets itself apart from other academic commercialization models by using an efficient, proactive approach to identifying projects with potential for addressing unmet medical needs. In doing so, the OTA delineates and executes de-risking activities by working with contract research organizations (CROs), VCs and other outside consultants to maximize the likelihood of success.

During a recent conversation with Shohdy – also a research assistant professor in the Department of Cell Biology at NYU School of Medicine – he shared OTA’s successful strategy in de-risking and fast-tracking stellar academic science to industry and ultimately to patients.

Rich Soll: What is OTA all about and how did it evolve?

Nadim Shohdy: OTA was initially founded as a program that came out of the Office of Industrial Liaison, which is NYU’s tech transfer office where I used to be. It stemmed from the challenges of out-licensing academic therapeutic assets.

Investors are always wanting to see more, and academic projects, in their eyes, are usually considered too early and too risky to in-license then invest resources to build the company, conduct the drug discovery, etc. When I was in the tech transfer office, I was focused on out-licensing NYU’s therapeutic assets, and despite the fact that I managed to get a few good deals under my belt, there was also a lot of frustration as many good projects were having a tough time getting partnered with partners who have the resources and expertise on how to build a company and take a program all the way through clinical development. The reason they weren’t being partnered was not because they were bad projects; rather they were good projects, but were missing extra validation such as animal data, more chemistry, a starting compound or antibody, more data demonstrating a link between the animal models and human disease – whatever that is, that missing piece of data was holding back that project from being the basis for a quality partnership with a biopharma or an investor to launch a well-resourced startup.  Eventually, we realized that we needed to combine the best academic expertise we have in disease biology with the best industry expertise and capabilities in drug discovery to generate that extra, much needed validation.

Rich Soll: So, you want to try to do a deal as early as possible with more seasoned developers. But novelty has more risk. How does that end up balancing out with trying to do deal making in the early stage?

Nadim Shohdy: That’s a great question and it’s a real balancing act. It’s understood in industry the longer a startup holds onto an asset and can advance it with its own resources, the greater the valuation of that asset when it comes time to partner with pharma. However, that model doesn’t necessarily hold when you’re trying to de-risk assets within the academic environment. And the reason is because unlike a startup company that has one or two or even three assets, an academic medical center, especially a major one like NYU, has a very fertile environment where new disease targets are continuously identified by our faculty, resulting in new projects consistently entering OTA’s pipeline. Even if we are very stringent and work only on the most compelling projects, we still have a constant influx of new projects coming in with relatively limited resources. This unique dynamic explains our balancing act with regard to how long we can hold onto projects, setting the stage for partnership offers, and then seizing on those opportunities to partner them.

Rich Soll: How do you decide how far to take a project before handing it off to industry?

Nadim Shohdy:  We never lose sight of the fact that we are an academic medical center and not a drug company. OTA’s goal is to do enough quality drug discovery to hand off to industry who really have the proper resources and expertise to advance therapeutic projects to the clinic.

Rich Soll: So, it’s fair to say you keep your focus on the discovery and the commercialization goes to the professionals.

Nadim Shohdy: Exactly. The bread and butter of NYU’s researchers is to generate new insights into disease biology. OTA takes that one, two or three steps further to then partner off with industry. We do not believe that we are going to ever substitute industry.

Rich Soll: How do you solicit ideas, how many requests do you get per year, and how many do you roughly fund?

Nadim Shohdy: Our process is unorthodox for academic circles where we don’t really have a once-a-year RFP to solicit proposals from PIs that then culminates in a check given to the PI and hoping for the best. Rather, our typical process is akin to a venture capital firm’s scouting and due diligence process. We constantly engage our faculty on their research. Sometimes, the tech transfer office alerts us to a potential opportunity not on our radar, or in some cases, industry comes to us with interest in an area. Sometimes we’ll talk to faculty about great ideas that aren’t ready for us to jump in yet but we’ll touch base with them every few months until it reaches a point where we think there may be a path forward.

Regardless of how the idea is sourced, we start with a preliminary due diligence that involves a lot of back and forth with PI’s and our own competitive intelligence to evaluate what any venture capital firm would assess such as how strong is the target validation (via the PI’s own data and the literature), the feasibility of drugging the target, the unmet need, and the intellectual property position. If there are no red flags we continue the same analysis on a much deeper level, utilizing our consultants, advisors, in parallel to actively sampling investor and biopharma sentiment. In fact, we shop around our projects even before they are bona fide OTA projects. That’s how early the business development happens. And of course, we endeavor to conduct very thorough reviews on the science. We are so plugged into the science with the PI before and during the work plan, where we help them design experiments, evaluating the raw data, considering new directions and troubleshooting; we’re really part of the project team. Ultimately all this iterative diligence helps us assess how “hot” a project is, and what are the gaps that need addressing to get it across the finish line. Is it more animal data? More chemistry? The goal is to build a work plan that everybody feels is the right plan for this project, and then OTA funds and manages that plan with the PI and the rest of the team.

Since late 2013, we’ve evaluated about over 50 projects and worked on about 30. Our steady state pipeline is between 15 to 17 projects. Every year, we take on maybe three or four new projects and about a similar number leaves the pipeline, either for good reasons (i.e. partnerships) or we terminate them for lack of progress, which we’re not shy about doing.

Rich Soll: What kind of funding model do you have?

Nadim Shohdy: It’s highly variable because we’re funding specific activities to get to an exit. We can fund one activity and if it looks good, we fund a second activity and so on. We can fund as little as $15,000 for a two-month experiment in the PI’s lab to do a short cell culture study, to as much as $400,000 to develop a high throughput screening campaign with our CRO partners, and everything in between. It really depends on the project and what we think is the shortest path to get to a deal. Furthermore, we mitigate the risk by tranching our large investments, so even a $300,000 project is going to be broken up into lots of smaller pieces.  But where we do have a limit to is the stage; we don’t want to take projects later than the lead optimization stage, not only because of finite budgets and resources, but also if we are playing our cards right by doing our homework properly in picking the right projects, and doing the business development efficiently from day one, then we should have partners lined up for those projects whose data we are generating is compelling, without a need for us to take it further on our own.

Rich Soll: What is the OTA’s success rate?

Nadim Shohdy: Nine of our pipeline projects have been partnered with investors or biopharma. To be completely candid, not all of them are homeruns, but we have had a couple of homeruns, and a bunch of triples, doubles and singles, but that’s okay because our goal is to take projects that would have otherwise been deemed too early by investors and stagnated on the shelf at NYU. The goal is to transfer projects to industry who then carries the risk of getting them to commercial success.

Rich Soll: Regarding success rates, you received 50+ proposals, committed to 30 and now have 9 projects in industry vehicles, so what you’re showing here is about a third success rate.  That’s quite a milestone actually.

Nadim Shohdy:  Yes.  Last year was a real banner year and we’re hoping this year is also a very successful year, but, fingers crossed, we’ll see how that turns out.

Rich Soll: You mentioned that CROs are a critical component to your operation. Can you elaborate a little bit more on that?

Nadim Shohdy: CROs are essential for our activities for a number of critical reasons, including capability, quality, network, and independent validation.  We have master service agreements with numerous CROs, granting us the ability to customize on a project-by-project basis depending on that project’s needs, for example, developing an assay, screening a small molecule library or validating a certain protocol. Further, the CRO becomes an unbiased source of validation using industry standards, thus coupling the ability to test the hypotheses from the high-quality biology at NYU with the best capabilities in drug discovery through this third-party mechanism. You know as well as I do the reproducibility issue in academia— Investors and biopharma are more convinced on the validity of that data package when it’s validated by an impartial third party, especially if the VC or big pharma knows that third party CRO’s capabilities. It’s really a win-win-win situation that greatly increases the likelihood of quality partnerships for our assets.

Rich Soll: Let’s talk about ecosystems a little bit. You mentioned at the outset NYU is a very rich source of biomedical research, especially as one of the bigger recipients of NIH dollars as I recall. Historically, New York City hasn’t been a place of biotech innovation per se where companies have spun out on a regular basis, and only in recent history we’ve started to see this surge of interest in doing so. How has NYC fostered that environment and how has NYU and the OTA benefited from that ecosystem?

Nadim Shohdy: For the record, we want our projects to find happy homes with industry, wherever they may be and whether they’re new startups or partnerships with existing biopharma.  We actually don’t have (yet) a project that has been spun out into a New York City-based startup but I am confident it’s going to happen. Our startups– i.e. deals that are not with existing biopharma companies– have been either virtual or based in places like Boston and Canada. Where our startups are based in really depends on the circumstances, the resources, and the appetite of the investor ready to take on our project. With that said, the growth of the New York City ecosystem has greatly benefited us because it has increased our interactions with early stage investors. We’re constantly reviewing our pipeline with the VCs that have set up shop in New York City. That’s definitely been very helpful for OTA in order to better understand and stress test our assets’ commercial potential. New York City’s endeavors to provide additional resources for translational projects have also benefited us where two of our OTA projects have had the benefit of non-dilutive funding from New York City programs that supplemented our own investment. This approach of leveraging other funds to supplement our own, allows us to stretch our dollars and drug discovery activities immensely, and mitigates the risk not just for us, but also those third-party co-funding sources.

At the same time, we think we’re helping the New York City ecosystem by doing more quality deals with investors who are either setting up in New York City, or those who may want to increase their presence there.  In other words, attracting more investors to NYU can also help the greater community as well.

Rich Soll: Another thing that is inspiring is the way NYU promotes entrepreneurialism. How does the OTA fit into that?

Nadim Shohdy: One of NYU’s academic medical center’s major strengths is high quality biomedical science.  Our senior leadership recognized that to translate this quality science into commercial opportunities, the spirit of entrepreneurialism needed to be instilled. OTA is just one facet of realizing that goal by directly enabling translating the science into industry partnerships and startups. Additionally, the Biomedical Entrepreneurship Program was recently formalized, which is a set of courses for postdocs, graduate students, and even faculty clinicians, that also allows us to intersect our other entrepreneurial activities, such as internships for students and postdocs.

Furthermore, about a year-and-a half ago, NYU and Biolabs announced the incubator BioLabs@NYULangone in downtown Manhattan.  These examples support the NYU’s view that entrepreneurship and translational development of our great science are very important components to doing business.

Rich Soll: What fuels and inspires you on a daily basis?

Nadim Shohdy:  This has truly been such a fun, if challenging, gig. One of our unofficial mottos at OTA is “this stuff’s complicated…but we get stuff done,” whether it’s validation of exciting but complicated disease pathways, conducting feasibility studies or assay development, identifying early drug candidates, juggling the management of resources, logistics and people, and weaving all this with our business development efforts.  With the OTA team, we have had the pleasure of building projects from scratch, and the opportunity to advance innovative academic projects to industry partnerships. To do this kind of exciting early stage work requires a very deep and intimate involvement on both the science and the business end of things, which for me personally is double the fun since it’s nowhere near as thrilling to work on one without the other.  But most importantly, we are passionate about never losing sight of what our mission is all about, despite the challenges, complexity and inherent risk, which is to accelerate the research from the bench to the bedside, for the ultimate benefit of patients.