Deerfield and UNC form drug discovery partnership

Deerfield Management, a health care venture firm, will put $65 million into Pinnacle Hill, a company it created with the University of North Carolina at Chapel Hill to translate UNC drug discovery projects into drug candidates. This is Deerfield’s third large academic pact: Last year, the firm made similar deals with Broad Institute of MIT & Harvard and Johns Hopkins University.

The collaboration with UNC came together quickly after executives from Deerfield and UNC connected in June during the Biotechnology Innovation Organization’s annual meeting in Boston. Similar to Deerfield’s pacts with Hopkins and Broad, projects pitched by UNC scientists will be chosen by a steering committee with equal representation from each organization.

The committee reviews short proposals twice a year, although it could eventually move to a rolling review, says James Flynn, managing partner at Deerfield. A year into the Broad and Hopkins alliances, Deerfield is seeing between 30 and 50 proposals per cycle, Flynn says. Deerfield’s goal is to have a discovery pipeline that, across its partnerships, spans at least 50 projects.

Funded projects are nurtured to the point of having a drug candidate ready for testing in humans. At that stage, a program could be licensed—in which case, profits are split between UNC and Deerfield—or a company could be spun off.

Pinnacle Hill will bring several advantages for UNC, says Kay Wagoner, associate director of the university’s Eshelman Institute for Innovation. It gives researchers a new avenue for translating their ideas into drugs while also potentially bringing funding to UNC labs. For example, Pinnacle Hill might contract with an outside firm to do high-throughput screening or chemical optimization, but a UNC researcher might be funded to develop an assay.

And for a university with significant drug discovery activities but situated away from the big biotech hubs, Deerfield can support projects that might otherwise languish. Although local investors do exist, “the reality is, this is not Boston or the Bay area,” Wagoner says.

In the end, she adds, “It’s not just the money. It’s also the development plans, the expertise, and the momentum to move projects forward that have an impact.”