Ed McDermott grew this institute’s business offerings to bring new hope to cancer research.

Failure is not usually a major component of a business strategy. In the case of the NY-based Ludwig Institute for Cancer Research (LICR), failure is only the beginning. Ed McDermott, president of the research institute, knows when dealing with complex biological problems, the chances of a drug succeeding are one in a thousand, but the important piece of the puzzle is the clinical discovery.

“In the transition between laboratory and animal models to humans, we felt there was a missing link, which we call ‘clinical discovery,’” said McDermott. “There needed to be the same scientific rigor and open mind to failure that exists in the laboratory in these early periods when you’re evaluating a response in humans. We felt being a discovery institute and a research institute that facilitates clinical discovery filled a critical void in exploring therapy strategies. We’re not simply asking if the therapy worked. We’re exploring how and why it did, or did not, work in humans.”

Three things distinguish LICR from other research institutes in the country. Firstly, the organization is singularly focused on cancer research. Secondly, the organization is global, with sites in Europe, North and South America, and Australia. Thirdly, the institute has made a commitment to evaluating the clinical applications of its own discoveries and developed an infrastructure to do so. For the past 15 years, the institute has worked on developing a cancer vaccine to stimulate the immune system and, at the same time, developed a stronger business model than was in place when it first began.

Developing a plan
In the early ’80s, discoveries emanated from the institute’s research operations in Brussels, Belgium, New York, and Lausanne, Switzerland that all pointed to the possibility of therapeutic cancer vaccines. Scientists at these locations discovered certain antigens and proteins were present in particular cancer types but not in normal tissue.

“As these discoveries were made we realized we needed to become more aggressive and sophisticated on the intellectual property front,” said McDermott. “Almost coincident with these discoveries we began to develop our inhouse capability to manage our intellectual property. Although almost every university research institute has that today, it wasn’t common in the ’80s.”

With these discoveries, LICR developed an intellectual property office. They then entered into arrangements with different companies, granting them an option to select a number of proteins to license. Because the institute wanted to ensure a company was committed to developing the proteins, the exclusive rights were not immediately handed over.

The institute introduced an option arrangement so any discoveries made by the partner company would be available to LICR locations across the globe for their own research purposes as well. “We became committed to the concept of cancer vaccines and continued to pursue the evaluation of these molecules on our own,” said McDermott. “We had also reached a point where we could meet the regulatory standards to begin introducing them in humans ourselves.”

At the time, the cost to manufacture proteins was between $3 million and $5 million. As a non-profit organization those prices were beyond the institute’s resources. The financing needed to develop the proteins was another deciding factor in partnering with another company. However, when the institute found the partner company was not making as many of the proteins as anticipated, McDermott and his team decided to set up their own production facility.

Growing the business
In keeping with the global philosophy introduced by its founder, Daniel Ludwig, LICR has research operations around the world. In the mid-90s, an opportunity arose with its Melbourne, Australia branch to construct a biological production facility in conjunction with a partner research hospital. The facility was structured to make small quantities of the material, which reduced the expense.

“It was one of the few, if not one of the first, academic production facilities that had been brought on stream in the field of cancer research,” said McDermott. “We then began manufacturing our own clinical products.”

Typically, when a research institute uses outside sources to manufacture its clinical products, they also have to sell the rights to the molecule. By making its own products, LICR keeps the rights to the molecule. Importantly, LICR is able to do its own early-phase, clinical discovery trials to both explore the human response to the vaccine and also to optimize vaccine formulation and delivery.

“This is an extremely important point for the institute because our objective is to not only improve the understanding of cancer,” said McDermott. “We want to do something to alter the course of the disease.”

In the process of developing, following, and moving ahead these discoveries, by the early ’90s LICR had developed an intellectual property program, production facility, and a capacity to monitor the trials, evaluate the patients, and collect the data. “We also equipped ourselves to meet the regulatory requirements associated with introducing a drug in humans, whether it be US regulations or equivalents outside of the US,” said McDermott.

Although it can take 15 years and about $1 billion to develop a drug in the cancer field, and only one in 99 potential candidates succeeds, potential failure only opens the door to other possibilities, which is ultimately LICR’s goal.

“It remains to be seen if therapeutic cancer vaccines will be a new and effective form of treating cancer,” McDermott said. “If it does emerge, and we are certainly hopeful that it will, it will not only be a new cancer therapy but also a new way to treat cancer. By focusing on clinical discovery, we are ensuring the possibilities of our research.”