Drugmaker Pfizer Inc. said Wednesday it is starting a major research collaboration with Boston area scientists, putting them in charge of their own projects to speed up and improve discovery of new medicines.
The world's biggest pharmaceutical company by revenue said it is setting up labs in a Boston medical campus where its scientists will work side by side with university and hospital researchers from eight prominent Boston-area institutions. Pfizer is pledging a $100 million investment over the next five years, a tiny fraction of its roughly $8.25 billion annual R&D budget.
The new Center for Therapeutic Innovation is Pfizer's third in the U.S., with the others in San Francisco and in New York, Pfizer's base. The Boston site will be the headquarters for all the centers, part of a new twist on how industry and academic collaborations are typically run.
Analysts were split on whether the new approach is a bargain investment that could bring a big payoff or window dressing to impress investors.
Either way, the company needs some big successes after years with a high number of failures by its in-house researchers _ as generic competition looms for its $11 billion-a-year cholesterol fighter Lipitor and other drugs.
The center's research projects will come from ideas generated by doctors and university scientists in the Boston area, which has long been a hotbed for medical research.
But instead of them dropping out after potential drug compounds are tested in lab dishes and animals, those scientists will stay on board through the first small tests in people, project head J.C. Gutierrez-Ramos told The Associated Press. It often takes 10 to 15 years from the time a scientist first theorizes how a molecule might fight a disease until human testing starts, mainly because of the difficulty of raising steady funding, he said.
"What we hope is that we accelerate by five or six years the time to do that," said Gutierrez-Ramos, Pfizer's head of BioTherapeutic Research and Development.
That unit creates biologic drugs, which are produced in living cells and injected into patients, as opposed to traditional pills made by synthesizing chemicals.
Gutierrez-Ramos will oversee all three therapeutic innovation centers.
He said that once new experimental drugs go through the first small-scale tests in people, Pfizer will decide whether to take over and conduct the multimillion dollar, years-long testing in increasingly larger groups of patients. If not, it could turn the projects back over to the academic researchers or set up partnerships with other pharmaceutical companies or venture capitalists to share risk by jointly funding the research needed for regulatory approval to sell a drug.
"The basic premise is that if we don't option it, it's free and clear" for the original scientists to pursue, with Pfizer retaining only a "really minor" interest, such as future royalties from an eventual product, said Gutierrez-Ramos.
"We will not encumber another party to come in," he said. "This was key" to signing on the academic institutions.
Those are: Harvard University, Tufts University, Tufts Medical Center, University of Massachusetts Medical School in Worchester, Boston University School of Medicine, Children's Hospital Boston, Beth Israel Deaconess Medical Center and Partners HealthCare.
Erik Gordon, an analyst and professor at University of Michigan's Ross School of Business, said he thinks the main benefit to Pfizer will be that if a potential new molecule exhibits major side effects or other problems in initial human testing, the researchers at those institutions will be more likely to find a solution to save the project than Pfizer's in-house staff.
"It's a real coup for Pfizer, because they have ... first option on an awful lot of really good science" for only $100 million, Gordon said.
But analyst Steve Brozak of WBB Securities sees the investment as too small to do much more than cover some university overhead. He said Pfizer needs to spend far more than $20 million a year to create new products.
Pfizer announced the new center at a news conference attended by Massachusetts Gov. Deval Patrick and Boston Mayor Thomas M. Menino.
It will be at the Longwood medical campus in Boston, amid many top-tier medical research institutions, and initially will have about 40 staffers, mostly Pfizer scientists and graduate student researchers from the participating institutions.