The Rise of Pharma-lanthropy

An increasing number of nonprofit foundations are partnering with pharmaceutical companies to speed development of targeted treatments for cystic fibrosis, Parkinson’s, leukemia, and more.

By Leslie Minora featured image Illustration by Oliver Munday

As a pediatric intensive care nurse at MassGeneral Hospital for Children, Kimberly Cheevers cared for cystic fibrosis patients in varying degrees of health. She saw how the inherited disease, which causes thickened mucus in the lungs, pancreas, and intestines, made patients prone to severe respiratory infections. She saw children coping with symptoms but living relatively normally; in other cases, she saw the disease at its worst, ending lives that had barely started.

As a mother, Cheevers cares for two daughters, 15-year-old Laura and 12-year-old Cate, who were both born with cystic fibrosis. She and her husband are carriers of a gene mutation that causes the disease, but they do not have it themselves. Odds were low that both daughters would suffer from it. When that ultimately became the case, Cheevers’ colleagues at the hospital shielded her from nursing other patients with the disease.

Devastated. That’s how she felt at her first daughter’s diagnosis. At the time, available treatments reduced symptoms and lengthened life expectancy, but only to patients’ late 30s. Cheevers learned from her doctor that promising treatments were developing, and she clung to that hope. Meanwhile, the Cystic Fibrosis Foundation was funding research for targeted drugs aimed at correcting the disease’s genetically dictated cellular malfunctions.

At around the time Cate was born, the Cystic Fibrosis Foundation began a novel approach, investing tens of millions of nonprofit dollars over several years to fund commercial pharmaceutical research. Over time, this venture philanthropy model caught on as more nonprofits adopted similar strategies, including organizations dedicated to finding treatments for Parkinson’s disease, multiple myeloma, and juvenile diabetes. The financial risk of funding pharmaceutical research is high, but the implications for more specialized disease treatment are vast.

For the Cheevers girls, every day of childhood meant a barrage of enzymes, vitamins, physical therapies, nebulizer treatments, and, at times, antibiotics. For many years, coughing made it difficult to sleep at night. Yet, even with constant treatments and interruptions, both girls managed lives full of friends and activities, and they excelled in school.

Still, bouts of illness would periodically sideline the girls from everyday life. Laura was hospitalized several times for a “clean-out” with high doses of antibiotics to treat infection. Gradually, the bacteria in her lungs became resistant; there were increasingly fewer effective antibiotics. This worried her mother. With Cate, there was plenty of coughing, but complications were less severe.

Cheevers wanted to do everything she could to ensure cystic fibrosis research was funded and expedient. “I couldn’t find a cure; I’m not a scientist. But I’m connected, and I’m eager, and I’m hardworking,” she says. She began fundraising for the Cystic Fibrosis Foundation and, working with other families like hers, has raised more than $1 million.

In 1989, long before Laura and Cate were born, a genetic cause of cystic fibrosis was discovered through research supported by the Cystic Fibrosis Foundation. For a moment in history, it seemed that the newly pinpointed faulty gene would reveal an obvious cure. Instead, further research showed that there are nearly 2,000 distinct mutations in that gene that could cause the disease, meaning a cure was much more complex.

As CEO of the Cystic Fibrosis Foundation, Robert Beall, a former biochemist, has always had his sights set on a cure. To him, that means reducing the financial risks of early-stage drug development through investments in pharmaceutical research. In 2000, he led the foundation to launch Cystic Fibrosis Therapeutics Inc., the part of the organization dedicated to drug discovery through collaborations with for-profit companies.

“It grew out of frustration. … The biggest risk for us was not taking an opportunity to move forward,” he says. The thinking was: “If we don’t do it, no one will.”

According to Richard Hamermesh, a Harvard Business School professor and chair of the school’s Healthcare Initiative, the cause of Beall’s frustration and the need for his funding are tied to the fact that early-stage biotechnology investment money has gradually been drying up, especially following the economic recession. “So the question is: Who is going to fill that gap?” he says. Increasingly, the answer is nonprofits like the Cystic Fibrosis Foundation.

Joe O’Donnell, a successful Massachusetts businessman and philanthropist who lost his 12-year-old son to cystic fibrosis in 1986, started The Joey Fund, which primarily funds biotech research and also provides assistance to families caring for children with the disease. The charity is independent but inseparable from the Cystic Fibrosis Foundation. O’Donnell is chair of the organization’s Milestones to a Cure fundraising initiative, which has pumped more than $175 million into medical research, education, and care. Clearly, this is no small endeavor.

In 2000, the Cystic Fibrosis Foundation began its collaboration with Aurora Biosciences, which was later acquired by Vertex Pharmaceuticals. The company had laboratory technology capable of a high level and volume of testing small-molecule drugs. Beyond the funding stream, the foundation also had connections to patients for clinical trials of these highly specific treatments.

Through the research at Vertex, one compound, VX-770, which would later be called Kalydeco, surfaced first as the most promising development. Clinical trials began in 2006. Kalydeco targeted a specific chromosomal mutation — G551D — that causes about 4 to 5 percent of cystic fibrosis cases by preventing chloride from passing through otherwise intact cellular protein passages.

Cheevers recalls it was sometime in 2009 or 2010 when she first heard mention of this new medication and its upcoming clinical trial. About six months later, her daughters’ doctor at MassGeneral approached them about participating in a study of VX-770.

Not only was the study taking place at the hospital where Cheevers worked and took her children, but also both girls had the exact chromosomal abnormality, G551D, that the treatment targeted.

“It was like a needle in a haystack,” Cheevers says. “It was a complete miracle for us, actually.” But it was a trial; the twice-a-day pill was promising but unproven.

On top of that, she says, “It was a double-blind study, so we just didn’t know who was getting what.” Within six weeks, Cate had more energy, her cough essentially disappeared, and her pulmonary function test, which gauges lung capacity, improved dramatically. She gained 16 pounds in six months.

But Laura, whose condition was more severe, remained the same. After the 48-week trial, they found out that she had been given the placebo. She then began taking the medication and gained 10 pounds in six months. Her symptoms improved dramatically. The entire family began sleeping much better. Colds and flus were no longer cause for alarm, and now Cheevers can’t recall the last time either daughter was on an antibiotic.

In 2012, the FDA approved Kalydeco, the drug formerly known as VX-770 and generically as ivacaftor.

Laura is on the dance team and runs track. Cate plays basketball and soccer. Even with Kalydeco, they continue taking enzymes and vitamins, more as a precaution, and they use a nebulizer a few times a week instead of at least once daily. Cheevers is stunned by the turnaround.

“I think this is just the beginning … and I don’t think it’s a cure right now, but I do think it’s a fabulous treatment,” she says.

Beall, of the Cystic Fibrosis Foundation, is widely considered the founding father of the venture philanthropy model. The success of Kalydeco, which treats the underlying causes instead of just symptoms, fuels the foundation’s desire to stay on course pursuing research opportunities with the biotech industry. It also helps financially. The foundation receives royalties on the sales of Kalydeco and reinvests that money in similar research.

Now that Kalydeco has been released, “There’s just so much more interest in the concept of venture philanthropy,” Beall says. “We’re all in this together; there’s room for a lot of people to participate in this.”

7 Nonprofit Groups Using the Venture Philanthropy Model To Help Fund Drug Development

1. Cystic Fibrosis Foundation
In almost all discussions of venture philanthropy, the Cystic Fibrosis Foundation is upheld as the organization that pioneered the model for rare diseases and has been most successful with it. Its drug development model aims to reduce the financial risk of early-stage drug development of targeted treatments by working with pharmaceutical companies and reinvesting the resulting funds into further research. The discovery and approval of Kalydeco, which treats a root cause of the disease, was a major milestone, and the science behind it has unlocked new research and development that may eventually lead to a cure for cystic fibrosis.

2. Michael J. Fox Foundation
Michael J. Fox established his namesake foundation with the goal of developing better treatments and finding a cure for Parkinson’s disease. As part of its efforts, the organization has invested $100 million in funding nearly 225 pharmaceutical-industry projects. As with many other organizations, the Michael J. Fox Foundation’s pharmaceutical partnerships are part of a nuanced approach that offers funding, research tools, networking, and recruitment assistance for clinical trials.

3. Multiple Myeloma Research Foundation
As part of a widespread approach, the Multiple Myeloma Research Foundation partners with the pharmaceutical and biotech industries to develop new treatments. The organization funds early-stage development, which is often a prohibitively expensive step in pursuing targeted disease treatments. The MMRF Biotech Investment Awards program began in 2006 and has committed $11 million to biotech research and development. Research funded by the MMRF resulted in several new treatments, with more than 20 others in various stages of clinical trials in the development pipeline.

JDRF, the leading global organization funding type 1 diabetes research, focuses on translating research into therapies that will improve lives and eventually cure type 1 diabetes. With an approach that includes partnering with pharmaceutical companies, the goal is to “decrease barriers to commercial development.” The organization pursues this goal through key partnerships with “the academic sector, NIH [National Institutes of Health], other funders and foundations, industry, investors, regulatory agencies, and healthcare payers” to deliver treatment breakthroughs to patients.

5. Leukemia & Lymphoma Society
The Leukemia & Lymphoma Society partners with several organizations, including Onconova Therapeutics, Celator Pharmaceuticals, and Acetylon Pharmaceuticals, to expedite the drug-development process. The organization’s Therapy Acceleration Program, launched in 2007, funds initiatives with potential to change and accelerate the standard care for patients with blood cancer. The program aims to shepherd therapies from discovery to clinical testing to increase the likelihood of a beneficial treatment reaching the market. Through its partnership with Onconova, LLS funded a phase 3 clinical trial for patients with relapsed or refractory myelodysplastic syndrome, a type of blood cancer. This marks the organization’s first “approval-track clinical trial.”

6. Alzheimer’s Drug Discovery Foundation
The Alzheimer’s Drug Discovery Foundation is a biomedical venture philanthropy nonprofit aimed at developing treatments, and eventually a cure, through a diverse portfolio of programs. The ADDF focuses its funding on early-stage research and clinical trials to reduce the financial barriers that prevent promising medications from reaching the public. Many of its grants are structured as investments; the returns are then directed toward new research. The ADDF partners with Merck, Pfizer, and others. It funded early research for what became Amyvid, a diagnostic test for Alzheimer’s disease that was approved by the FDA in 2012.

7. Autism Speaks
Autism Speaks advocates for autistic individuals and funds research to further understand the condition and develop treatments that could lead to a cure. In 2012, it launched Delivering Scientific Innovation for Autism (DELSIA), an independent nonprofit affiliate. DELSIA works with for-profit organizations, including biotech companies, to expedite the development of treatments, devices, diagnostic tools, and other products. As with many venture philanthropic arrangements, its partnerships include profit-sharing arrangements for successful products, and any returns are directed toward further research and development. DELSIA is an additional approach to the scientific research already funded by Autism Speaks. It aims to convert laboratory research into practical applications for those with autism spectrum disorder.

To some, a nonprofit funding for-profit research may seem like a betrayal of the charitable spirit. Yet, it’s a major step in treating diseases, especially those that aren’t widespread enough to attract commercial investors. O’Donnell, of The Joey Fund, tends to approach such concerns head-on: “You’ve got a better idea?”

“There’s no guarantee we’re going to get that other 95 percent,” O’Donnell says, meaning the majority of cystic fibrosis patients for whom Kalydeco is not currently considered a silver bullet. Then, he adds, “But if you’re a betting woman, you may want to get your money on that.”

With cases like the Cheevers girls as a testament to what this research can accomplish, it’s certainly an appealing bet. Or, as O’Donnell puts it, “Kids are breathing like racehorses now.”

In late February, the FDA approved Kalydeco for the treatment of eight additional cystic fibrosis mutations, significantly widening its scope. Other clinical trials are underway for drug combinations that include Kalydeco and other compounds, and that could have treatment implications for a greater number of cystic fibrosis patients. The development of one treatment, it seems, is working as a springboard for the development of others.

Another organization taking a similar approach is the Multiple Myeloma Research Foundation. Its founder, Kathy Giusti, is in remission from multiple myeloma, a fatal blood cancer. Diagnosed in 1996, when she worked for pharmaceutical company G.D. Searle, Giusti looked to the pharmaceutical pipeline to see whether any promising treatments were in development. Unfortunately, she didn’t find much hope. This “silent killer,” as she calls it, needed the attention of biotech developers.

A Harvard Business School graduate with pharmaceutical experience, Giusti knew what had to be done and how to do it. Her foundation went on to develop a genomic initiative that increased the basic biological understanding of the disease. With genetic targets in mind, the foundation funds early-stage pharmaceutical research. Like the Cystic Fibrosis Foundation, Giusti’s organization takes a widespread approach, pursuing treatment models for multiple variations of the disease simultaneously.

As for the progress that has been made, Giusti says, “We’ve already conducted nearly 50 phase 1 and 2 trials. We’ve seen six drugs approved by the FDA.” The five-year survival rate for multiple myeloma patients has also more than doubled in the past 10 years.

FasterCures, an organization with a mission to “remove barriers to medical progress,” acts as a repository of information and resources. It emerged in 2003 as an information-sharing hub for best practices, including those related to partnerships between nonprofits and pharmaceutical companies. Over the past several years, the National Institutes of Health, the FDA, pharmaceutical companies, and academic researchers have become keenly aware of certain disease-based nonprofits and the research funding and clinical trial participants they can provide, says FasterCures Executive Director Margaret Anderson.

Referring to partnerships between nonprofits and pharmaceutical companies, Anderson says, “It’s not that it’s a marriage of convenience; it’s a marriage of necessity. There’s an increasing awareness of that.”

This partnership method of pharmaceutical development is a constant balance of risk and potential. And even when a drug like Kalydeco is developed, there’s a realization of how much more is needed.

Still, there are people like Laura and Cate, who are living proof of what’s possible. Their mother sees the potential every single day. “Never give up when you’re faced with something like this in your life,” Cheevers says.