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Building A Biotech Nation

Emory University teams with the South African government to lay the groundwork for a biotech industry

by Lisa M. Jarvis
September 15, 2008 | A version of this story appeared in Volume 86, Issue 37

Business guidance
Credit: Steve Sencer
Emory's Walton (from left), Towry, and Sencer at the executive education program in Cape Town, South Africa.
Credit: Steve Sencer
Emory's Walton (from left), Towry, and Sencer at the executive education program in Cape Town, South Africa.

AS ANYONE WHO regularly opens a newspaper knows, Africa is in desperate need of better, cheaper, and more readily available drugs to treat several infectious diseases that are ravaging the continent. Yet few major drug companies are interested in devoting R&D resources to cures for the likes of tuberculosis and malaria, diseases that primarily affect people who can't afford to pay a premium for medicines.

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Building A Biotech Nation

Nonprofit organizations such as the Bill & Melinda Gates Foundation have made significant headway in creating incentives for companies to target underserved populations. Ultimately, though, the best way for Africa to overcome its drug drought may be for Africans to take matters into their own hands; that is, for those lifesaving drugs to be discovered and sold by African companies.

Although enterprising small drug companies are springing up across the globe, there are virtually no such biotech firms in Africa. So how do you start an entire industry from scratch? If you're Dennis C. Liotta, an organic chemist at Atlanta's Emory University and coinventor of several antiviral drugs, including Gilead Science's Emtriva, you do it one scientist and one entrepreneur at a time.

Liotta and a slew of researchers, executives, and lawyers from the Atlanta area are working with South African government and scientific agencies to lay the foundation for a sustainable African biotech industry. Sophisticated science does take place in South Africa today, but it is largely housed within universities focused on basic research.

Through the Emory Global Health Institute, an internal grant-making organization led by former Centers for Disease Control & Prevention director Jeffrey P. Koplan, Liotta and his colleagues are trying to formally train a generation of South African scientists in the art of drug discovery and the business of getting those drugs—as well as other biotech-based products—onto the market.

Starting up a biotech industry is an ambitious project that, even if it succeeds, will take many years to realize. Yet everyone involved seems to be working diligently toward this goal—and often without any real incentive other than to see South Africa prosper.

The first seeds of the Emory/South Africa program were planted in the late 1990s, when Tony Barrett, an organic chemist at London's Imperial College, told Liotta about the relationship he had developed with South African universities. Barrett was seeing good South African postdoctorate students come through his lab and had sent one of his own students down to the University of Cape Town to teach for a year. But he didn't always have positions available when promising students came along. Barrett suggested forming a consortium of universities to keep up the scientific exchange he started.

A group of professors traveled to South Africa to meet with university and government officials about the potential for exchanging students and postdocs. "At that point, we realized there was this real gap in terms of their ability to do drug discovery," Liotta remembers. "They had a lot of smart people, a lot of good organic chemists, but not many, at least in the academic setting, who knew about drug discovery."

At the time, disputes about rights to AIDS drug patents were making headlines, and the relationship between big pharma and world health agencies was growing increasingly contentious. Liotta looked at the situation and realized that even as philanthropic sources put more money into supplying Africa with effective drugs, the commercial sector would never be seriously interested in addressing diseases that promise little financial reward.

"If the people of sub-Saharan Africa are in the long run to address their health care needs, my opinion is that they're going to have to do it themselves," he says. "And the only way they can do that is if we provide them with the expertise."

A loose consortium was established, and Liotta started bringing South African chemists over to work in his labs at Emory. But he began to worry that he was inadvertently hurting, rather than helping, the situation. It turned out that his well-trained students were returning to a land of little opportunity. Government jobs were available but, according to the students, paid poorly. With no drug industry opportunities to speak of, many good scientists were simply leaving the country for jobs in Western pharmaceutical companies. "In a well-intentioned way, we might have been creating a brain drain," Liotta says.

In response, the Emory chemist started thinking bigger and broader. He turned to the Emory Global Health Institute, which was established in 2006 with some of the $540 million the university received when it sold its share of royalties from the HIV drugs that Liotta invented (C&EN, March 10, page 56).

Credit: Jon Rou/Emory University
Liotta is trying to kick-start an industry in South Africa.
Credit: Jon Rou/Emory University
Liotta is trying to kick-start an industry in South Africa.

LIOTTA ASKED for a grant to actively seek out South African scientists for fellowships throughout the Emory chemistry department. He wanted to cooperate with the South African government to bring a steady stream of chemistry and pharmacology scholars to Atlanta for hands-on experience in translational research. The professor was awarded $1 million, a sum organizers say should last about three years, and the South African government came up with matching funds. Last summer, Liotta started developing what is now formally called the South Africa Drug Discovery Training Program.

As recruiting for the fellowship began, Liotta heard from his South African friends and colleagues that basic science learning wasn't enough. Scientists needed to be trained not only in the art of drug discovery but also in the practicality of commercializing their inventions.

Last September, Liotta convinced Stephen D. Sencer, Emory's deputy general counsel, to accompany him to Cape Town. The two met with leaders of the South African government's Department of Science & Technology to discuss expanding the program's scope to include a South Africa-based business training component. The government had taken its first steps toward developing a biotech industry five years earlier when it established several regional biotechnology innovation centers. Now, representatives were ready to get on board.

"They were enthusiastic, and within a matter of months we had put together the framework of a program that involved a series of workshops and a business plan competition," Sencer says. Thus was born the Emory/Republic of South Africa Biopharmaceutical Initiative, a South African companion to the Emory drug discovery training program.

The first part of the initiative was a series of free, two-day workshops on starting up a biotech firm held in three South African cities—Cape Town, Pretoria, and Durban. The idea was to cover basics such as technology transfer, intellectual property law, raising capital, and market research while also helping attendees understand when an invention is just a neat idea, and when it is a commercially viable proposition.

The initiative's second component was a business plan competition modeled after one organized in the southeastern U.S. by the Atlanta-based biotech entrepreneur Frank R. Hunt. The South African competition, however, was designed to be more of an education tool for entrepreneurial scientists than a formal competition. "Through an outreach program, we try to find people with legitimate technologies that can be the basis for starting up a company," Hunt says.

Ideas started turning into action this year. Six South African scientists, selected by South Africa's National Research Foundation, arrived at Emory in late January and completed a six-month stint in labs across the chemistry department.

Four fellows came from South Africa's Council for Scientific & Industrial Research (CSIR): Pamisha Pillay, a doctoral candidate in organic chemistry, focused on finding HIV drugs from medicinal plants; Malefa Tselanyane, a pharmacologist, screened natural products for malaria treatments; Simon Moleele, an organic chemist, also targeted antimalarials; Chris van der Westhuyzen, another organic chemist, filled out the CSIR quartet. Two fellows were from the Medical Research Council of South Africa, in Cape Town: Nchinya Benedict Bapela, a pharmacologist working on tuberculosis treatments, and Duduzile Molefe, who recently got her Ph.D. in organic chemistry and has been researching combinations of indigenous plants that could be used to treat HIV.

Meanwhile, Liotta and Sencer recruited a group of Atlanta-based biotech entrepreneurs and intellectual property law experts and sent them to South Africa in late April to launch the business workshops. The Americans were uniquely qualified to speak about starting up an industry because they had already played key roles in establishing the biotech cluster that exists in Atlanta, Hunt says.

Being in South Africa, "reminded me a bit of what Atlanta was like in 1991," says David G. Perryman, chief executive officer of Buford, Ga.-based Zirus. "Good universities, good research, and people were energized and understood what they needed to do to build real companies, but there hadn't been any commercial successes."

THE SOUTH AFRICAN scientists attending got one-on-one time with the experts of their choice to discuss the commercial viability of their ideas. The sessions in the three cities were effective: The group received about 38 viable applications for the business plan competition, the majority from people who had attended the workshops, Hunt says. That pool was narrowed to eight finalists, who were recently assigned mentoring teams made up of both U.S. and South Africa-based individuals with business start-up expertise. With the help of their mentors, the finalists will build a commercial concept, put together a formal business plan, and create a PowerPoint presentation to help them master the art of the five-minute pitch, an essential tool for approaching venture capital groups.

The finalists got free passes to an executive education program held in Cape Town last week by three professors from Emory's business school—Steve Walton, Michael Sacks, and Kristy Towry—and professors from the University of Cape Town. It's the same weeklong crash course given to corporate clients such as Home Depot and Coca-Cola, Sencer says. Meanwhile, the South African government, signaling it is serious about supporting the biotech industry, has offered roughly $2 million in seed money for the winning team, which will be chosen in December.

It's only the first year, and there are many kinks being worked out in the Emory/South Africa project, particularly for the fellowship program in Atlanta. For starters, the fellows showed up at the end of January, several weeks after classes had begun at Emory, which meant they weren't able to benefit from all the resources the university has to offer. "We are the guinea pigs," notes Tselanyane, the CSIR pharmacologist.

Furthermore, matches between the fellows and research labs were not always perfect. For example, Tselanyane came to Emory in hopes of learning new HIV assays. Instead, she was placed in a lab that was primarily focused on cancer research. Still, Tselanyane says the cancer assays she worked on helped expand her general knowledge, and she is excited to have been trained to use a flow cytometer, an instrument she has access to in labs around South Africa.

And all the fellows agree that six months simply isn't enough. "By the time you start to enjoy the experience, it's time to go home again," Moleele says. The weeks spent adjusting to their new environment—getting used to Atlanta's cold and wet January weather, being far from loved ones, dealing with new allergies, and boning up on their new research projects—left precious little time to accomplish something substantial in the lab. "It takes three weeks just to adjust to the time change," Pillay notes. "It's not enough time to learn enough and make a valuable contribution."

Liotta would like to see fellows come to the U.S. for a year and, perhaps more importantly, would like interested fellows to be able to do a rotation, if not their entire sabbatical, at a pharmaceutical company.

Aside from tweaks to improve the fellows' lab experience, there are some personal issues that need to be addressed before the next group of scientists arrives in Atlanta. One hurdle has been transportation; although the fellows lived next door to one another in furnished apartments near the university's shuttle bus stop, they struggled to get around without a car. It was weeks before they realized they were even near a shuttle stop, and they laugh recalling the times they shuffled through the cold together to get groceries at the local Publix supermarket. Liotta says future fellows will be signed up for Zipcar, an hourly car-share service.


And while the young scientists clearly benefited from the research experience at Emory, they are also keen to learn how to start their own businesses. Led by Bapela, the group entered the business plan competition, but their project was not chosen for the second round. The group says it would have benefited from the basic presentations made in South Africa.

Credit: Courtesy of Emory University
Tselanyane (from left), Bapela, Pillay, Molefe, Moleele, and van der Westhuyzen.
Credit: Courtesy of Emory University
Tselanyane (from left), Bapela, Pillay, Molefe, Moleele, and van der Westhuyzen.

The organizers agreed that the fellows, particularly given their newfound role as ambassadors of the Emory program, should benefit from the business lessons that were offered while they were away. The organizers opened up last week's executive education program to all six scientists, and four were able to attend. For the next group of visiting scholars, Liotta hopes to incorporate a formal class on commercialization, complete with case studies from scientists who have successfully started up companies.

As for improving the South African business development competition, the instructors say they now have a better handle on what kind of information should be presented at their workshops and on how best to present it.

MENTORSHIP IS ALSO an issue. Hunt acknowledges that he struggled to find suitable mentors for the eight finalists, a problem he hasn't encountered in running the U.S. biotech competition. He says the program is open to any qualified mentors, from Atlanta or beyond, and expects the matching process will get easier in future competitions once a network of participants is in place.

And the Atlanta group is keenly aware of the challenges for potential entrepreneurs in South Africa. The money from the South African government for the business plan competition is a start, but it will take time before venture capital firms arrive to fund all the opportunities out there.

Despite the daunting task at hand, participants in both the U.S. and South Africa are focused on the next steps. Five years down the road, Liotta would like the program to be self-sustaining and multicentered. In addition to looking at partnerships with drug companies, he is talking with other universities, starting with Imperial College, the seed of the entire project, about expanding the network of institutions where fellows can be placed. The goal is to maximize the value of the experience, and Liotta says he is open to discussions with all qualified and interested participants.

"We don't have a monopoly on expertise," Liotta stresses. "If our purpose is to transfer expertise and build capacity, then we should be considering doing that as broadly as possible."

For their part, the fellows say they are ready to take on the role as ambassadors of the program. Although they all concede that high-paying jobs in big pharma are tempting, they seem committed to giving back to their homeland. "If this works then it means South Africa will be getting good scientists who really help the country," Bapela says. "If it works then we gain as a country."


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