| Posted: December 19, 2007 |
Northwestern fetches $700 million for drug |
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(Nanowerk News) Northwestern University's ownership of the key ingredient in a popular painkiller paid off handsomely Tuesday as it sold a portion of royalty rights to the drug Lyrica for $700 million.
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The university will continue to collect some royalties on the drug, which is marketed by Pfizer Inc. to treat nerve pain associated with diabetes, shingles and fibromyalgia.
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Northwestern chemists were the first to synthesize the chemical compound pregabalin, which is the basis of Lyrica.
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NU sold the rights to Royalty Pharma, a New York-based firm with a history of buying royalty rights from research universities.
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Northwestern has been using some of its Lyrica royalties bonanza to fund its drive to become the nation's top nanotechnology research center. The university has vowed to hire more scientific superstars in the coming year, relying on the prestige of its nanotech team and cash from royalty payments to attract more talent.
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This summer it recruited J. Fraser Stoddart and his team of 20 researchers from the University of California at Los Angeles. Next month Stoddart will join NU stars Chad Mirkin, Mark Ratner and Sam Stupp at the university's nanotech center.
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By accepting a lump sum and depositing most of it in NU's $6.6 billion endowment fund, the university can grow the amount by earning interest, said Eugene Sunshine, Northwestern's senior vice president for business and finance.
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"You get a big chunk of money now and put the money to work for you," said Sunshine. "We'll be able to do more with it than we would've been able to do otherwise. It provides more resources to be more competitive in capturing the professor Stoddarts of the world."
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A $95 million life sciences chemistry center, Silverman Hall, is under construction at NU, named for Richard Silverman, the chemist who developed pregabalin. Royalties are being used to help pay for it.
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The bulk of the $700 million will go into NU's endowment, but some portion will go to the chemists who synthesized pregabalin.
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Typically, the university draws about 5 percent annually from its endowment to support financial aid to students, construct buildings and laboratories, and pay start-up costs for adding new research teams, Sunshine said.
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The university didn't specify what portion of its royalty rights were sold to acquire the lump sum and what portion of royalty rights it retains. The size of the payment suggests the market's expectations for Lyrica's future sales.
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NU's Lyrica rights are by far the most lucrative bit of intellectual property the university owns, Sunshine said.
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"This is the kind of thing a research university may get once in a generation," he said. "We have a lot of other things in the pipeline. Who knows if any will approach this magnitude."
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