Recommended Principles to Guide Academy-Industry Relationships

Part VI: Targeted Principles: Strategic Corporate Alliances (SCAs) (36–48)

194 DETAILED DISCUSSION OF THE 56 RECOMMENDED PRINCIPLES Part VI. Targeted Principles: Strategic Corporate Alliances (SCAs) (36–48) What is an scA? A strategic corporate alliance (SCA) is a formal,comprehensive,university -managed research collaboration with an outside company sponsor (or several company sponsors) centered around a major, multi-year financial commitment involving research, programmatic interactions,“first rights to license” intellectual property, and other services. This definition is adapted from one developed by Cornell University.550 An SCA is distinct from an Industrial Research Consortium (IRC), in which it is customary for a group of some ten or more companies to pay yearly membership fees to jointly fund a broad research goal or technology development objective that all the subscribers have a common interest in supporting. Research results developed within the IRC are usually shared among the sponsoring members under nonexclusive licensing terms. Research results in an SCA, by contrast, are commonly licensed exclusively to the sponsor. The structure of an SCA is different from most industry-sponsored research agreements. Traditional industry sponsored grants involve smaller dollar amounts (usually under a million dollars); they also tend to be episodic and grow out of an individual faculty member’s direct relationship with a company. An SCA, by contrast, is larger in scale, may last longer, and has greater scope and influence. SCAs are often negotiated to last three to five years in the $1 million-to-$25 million range; others may run ten years or longer in the $50 million-to-$250 million range.SCAs are usually negotiated through a central university development office in tandem with a group of faculty, an entire academic department, or many academic departments. Unlike most industry-sponsored grants, SCAs frequently require new governing structures for management and oversight. Yet SCAs are not new. Some campuses, like MIT, have been administering them since the 1950s; MIT reports receiving roughly 45 percent of its total corporate research support in this form.551 Though most US universities have less experience with SCAs, they are growing more common, and many universities are now actively pursuing such alliances, especially with pharmaceutical , agricultural, and energy research companies. DETAILED DISCUSSION OF THE 56 RECOMMENDED PRINCIPLES 195 In the pharmaceutical sector,companies and universities are experimenting with new types of SCA collaborations in which academic researchers are more commercially engaged, participating not only in early-stage drug discovery, but also in more “translational” work—turning a drug into a marketable product.Translational work was traditionally performed in industry, not academia.The FinancialTimes reported it in this way in 2008: Colleges and universities have become the next generation research and development labs for drug makers at a time when they are battling increased generic competition for top-selling medicines, and a dearth of drugs in the pipeline. . . . Pharmaceutical companies have a long history of partnering with universities for drugs research and technology, but these new entrepreneurial arrangements represent a departure from the traditional model. In previous industry-academic partnerships, pharmaceutical companies engaged university researchers for a certain line of research that benefited their projects, and that research was carried out exclusively by the university scientist . New ventures, however, tend to involve teams of university and industry scientists working together on wide-ranging experiments to advance new drug discovery and stimulate basic research.552 examples of scAs in the energy and Pharmaceutical sectors • InAugust 2006,Chevron signed a five-year,$25 million alliance with UC Davis to develop low-cost biofuels for transportation. • In April 2007, ConocoPhillips signed an eight-year, $22.5 million research collaboration with Iowa State University to study and develop biofuels. • In March 2007, the University of Colorado at Boulder launched an alliance with 27 large firms (including Archer Daniels Midland, Chevron,ConocoPhillips,Dow Chemical,E.I.du Pont de Nemours, and Royal Dutch Shell) to finance the Colorado Center for Biorefining and Biofuels (C2B2), a consortium to develop biofuels that has brought in $6 million over three years.This collaboration appears to be a hybrid that melds an Industrial Research Consortium with an SCA. 196 DETAILED DISCUSSION OF THE 56 RECOMMENDED PRINCIPLES • In 2007, BP, the U.K.-based oil giant, signed the largest SCA to date, a 10-year, $500 million SCA, known as the Energy Biosciences Institute , with three public institutions: UC Berkeley, University of Illinois at Urbana-Champaign, and Lawrence Berkeley National Laboratory.The EBI is primarily targeting next-generation biofuels research and oil discovery...