Texas institute is spending $3 billion in taxpayer money to fight cancer

In 2007, 61% of Texas voters approved Proposition 15, thereby authorizing the state government to issue up to $3 billion in bonds over 10 years to fund cancer prevention, research, and product commercialization efforts. Their votes also created the Cancer Prevention & Research Institute of Texas (CPRIT, pronounced see-prit) to coordinate this initiative.

The first call for applications went out in 2009, and CPRIT began awarding funds in 2010. But within two years, the institute was engulfed in a controversy over its peer review process. The storm involved scientific, commercial, and political interests and caused a halt in funding for about a year. Ultimately, legislative reforms that addressed the grant and oversight processes got CPRIT running again in 2013.

Despite the setback, CPRIT’s mission has remained expediting “discoveries and innovations across Texas to reduce the burdens of cancer.” So far, third-party contractors report that the institute’s investment in research, screening, and related activities has been generating substantial economic impacts. Ten years after the vote, CPRIT says it is helping position Texas as a national leader in cancer research.

Texas is not the first state where voters have chosen to fund scientific R&D. In 2004, 59% of voters passed the California Stem Cell Research & Cures Initiative. The act authorized $3 billion in bonds and created the California Institute for Regenerative Medicine, which has disbursed about $1.4 billion toward research and facilities.

What makes CPRIT different is its disease focus. “We strive every year to demonstrate that we are creating a cancer research ecosystem in which the research is leading to meaningful impacts and translation into practice,” Chief Scientific Officer James K. V. Willson says. This ecosystem includes research programs, prevention services, clinical studies, companies, education, and jobs.

Recipients so far include 98 academic institutions, nonprofit organizations, and private companies, all located in Texas. CPRIT can distribute up to $300 million in grants per year for a total of $3 billion by 2021. The institute reached the $1.5 billion halfway point in 2016. Bills are in the Texas legislature to push the sunset date from 2021 out to 2023, which would give CPRIT time to disburse the full amount.

About 10% of CPRIT’s annual merit-based grant funding goes toward prevention activities, and about 18% targets product development. The remaining 72% is put into academic research. It’s an amount roughly equal to what is invested in Texas by the National Cancer Institute (NCI) annually.

About two-thirds of CPRIT’s academic research awards are to individual investigators, and the rest are to institutions for recruiting scientists. The success rate is about 10% for individuals and closer to 30% for facility and faculty recruitment grants.

“CPRIT funds have catalyzed something quite extraordinary that happened in Texas in the past five years,” Willson says. The state’s major academic institutions, including several University of Texas sites, have dramatically boosted their cancer-related research expenditures. These gains have come not only through CPRIT but also increasingly from sources outside Texas.

As a former cancer center director at the UT Southwestern Medical Center, Willson witnessed firsthand a transformation he says was enabled by CPRIT seed funding. Since CPRIT’s founding, centers at UT Southwestern and Baylor College of Medicine have been recognized as comprehensive NCI centers. The UT MD Anderson Cancer Center was the only Texas institution to already have the designation. Along with the UT Health Science Center at San Antonio, Texas is home to four of 69 NCI centers and ranks fourth after California (10), New York (seven), and Pennsylvania (five).

CPRIT has also raised Texas’s profile by providing $385 million to help state institutions recruit 127 cancer researchers, including seven National Academies members, Willson points out. Through its Scholars program, single awards of up to $6 million—and sometimes a bit more—target the move of prominent established investigators, rising stars, and first-time, tenure-track faculty and their labs to Texas.

This funding helps add to research infrastructure and the ability to train new scientists. UT Austin, for example, is building a cryo-electron microscope facility after CPRIT grants brought in Daniel J. Leahy, a prominent structural biologist previously at the Johns Hopkins University School of Medicine, and David Taylor, who was a postdoc at the University of California, Berkeley, working on structural studies of CRISPR gene-editing systems. The institute has also supported 30 multiuser facilities.

Meanwhile, CPRIT’s product development program has invested $329 million through 31 grants, mostly to small companies. About 10% of applicants are selected for awards. As part of the final contracts, grantee matching funds have added another $165 million, and the follow-on funding that these companies have raised totals more than $1.3 billion.

Most of CPRIT’s commercial investments support new drugs, along with some diagnostics and medical devices. “Research provides the scientific underpinnings upon which technologies are developed, but until those technologies are developed, we don’t advance cancer care,” says Mike Lang, CPRIT’s chief product development officer.

Houston-based Bellicum Pharmaceuticals, which has licenses to technology from Baylor College of Medicine, has received two grants from CPRIT. A $16.9 million grant awarded in November will support Phase II clinical studies of its lead T-cell therapy, BPX-501. A three-year, $5.6 million grant in 2011 supported preclinical development.

The first award helped catalyze Bellicum’s Series B financing in 2014 and the expansion of the company, says Chief Executive Officer Thomas J. Farrell. “The level of diligence that CPRIT had done provided some reassurance to the private investors we were working with at the time,” he recalls. By the end of 2014, the company went public. CPRIT support “was directly and objectively instrumental in getting to where we are today,” he says.

Aravive Biologics is literally where it is because of CPRIT. In accepting a $20 million grant last year, the company, formerly known as Ruga Corp., agreed to relocate to Houston. The money will help move its high-affinity, soluble Fc-fusion protein, Aravive-S6, to the clinic as a possible treatment for acute myelogenous leukemia and solid tumors.

With technology originating from Stanford University, Aravive is looking forward to partnering with academic centers in Texas to conduct clinical trials, CEO Ray Tabibiazar says. “Texas has a very good track record of being able to recruit patients and do the clinical research required for successful drug development.”

“There is an amazing amount of knowledge and expertise in cancer and outside of cancer,” along with capital to support the science, says Tabibiazar, who has a medical and venture investing background. But unlike established bioscience hubs, Texas currently lacks a management base with a track record of creating and building multiple companies, he says. That expertise may develop given time.

Beyond its primary mission, Lang says, “CPRIT also has the opportunity to be an economic stimulus to the state, and we endeavor to do that.” In fact, CPRIT has relocated 10 companies to Texas and says it has helped create nearly 400 jobs while maintaining more than 4,000. In 2015, CPRIT’s activities generated about $378 million in combined state and local tax receipts, according to an outside analysis.

Returns to the state are baked in, participants say, because CPRIT’s grants come with strings attached. As with many academic licenses, access to intellectual property for research purposes may be stipulated. And for companies and institutions, milestones are set along with return obligations, often in the form of royalties on sales of any eventual products aided by CPRIT funding.

Companies describe a multistep application process that is extensive, tightly managed, and up to a year long. It involves a review of the company’s science, intellectual property, business, and development plans, as well as any impacts on Texas. To minimize conflicts of interest, multiple panels of out-of-state experts review each aspect.

The whole submission and review process is probably more extensive than those required for a lot of venture investments, Tabibiazar says. “But it is understandable because it is taxpayer money and, at the end of the day, you are accountable to the people of Texas.”