The $50 million question

Can UC-Berkeley keep its independence from corporate pressures and accept a huge new biotech research grant?

By Kristi Coale
October 15, 1998 11:00PM (UTC)
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Experimentation is what you'd expect at the University of California at Berkeley, but one high-profile experiment taking place there this fall is raising fears among faculty and students about the future of academic research free from commercial concerns.

The experiment in question is a pending financial deal between UC's College of Natural Resources and the Swiss biotechnology giant Novartis. The deal promises to bring in an estimated $50 million to the university in research grants, facilities improvements and access to proprietary genomic databases that are vital to conducting plant genomic research. The proposed deal is being billed as an experiment mostly because of the unusual way in which it is structured -- all of the research dollars are going to just one department within the college -- the department of plant and microbial biology.


Corporate-university partnerships have become common in the '90s, since government has been getting out of the business of funding academic research, leaving an opening for private firms to fill. Until recently, these public-private partnerships typically have resulted in research relationships between a professor and a corporation. Therefore, the decision by a corporation to fund research in an entire department is unusual, notes Robert Spear, a professor of environmental health who serves as vice chairman of UC-Berkeley's academic senate, a body that serves as the faculty representative in cases such as this.

The concerns of faculty and students focus around one central question: Will the university be able to retain its traditional autonomy as an institution where honest research occurs, or will it ultimately have to alter its academic standards and research projects to meet the goals of the corporations that fund it?

If past is prologue, there may be cause for concern in this regard with Novartis. A few years ago, one of the companies that later merged to form Novartis overstepped the boundary between pure science and private industry in a deal with another California research institution. That deal involved Sandoz -- the Swiss biotechnology company that joined with Swiss-based Ciba-Geigy in 1996 to form Novartis, which is now the largest biotech firm in the world -- and the Scripps Research Institute.


From its picture-postcard home on the hills of the tony San Diego suburb of La Jolla, Scripps went hunting for a corporate partner in 1993 to replace an expiring agreement it had with Johnson & Johnson. It found Sandoz Pharmaceuticals Corp., the U.S. subsidiary of a Swiss biotech company with a keen interest in immunology, neurological disorders and cardiovascular disease -- the very areas that Scripps wanted to explore.

The original deal between the two parties had Scripps selling the commercial rights to all discoveries made during a 10-year, $300 million research partnership. One problem with this arrangement was that Scripps derives about 60 percent of its annual $120 million budget from federal sources -- mostly the National Institutes of Health. So in agreeing to the deal, Scripps had sold the rights to nearly $1 billion worth of federal research that a Swiss biotechnology company could potentially profit from.

The deal also raised concerns about corporate control over publicly funded research. Sandoz was to oversee all consulting arrangements by Scripps scientists, to have rights to review scientific publications from Scripps scientists and to have the ability to pull projects from the institute.


These details caught the attention of a congressional subcommittee, as well as the National Institutes of Health, which conducted an investigation into the proposed relationship. As a result of the pressure from this inquiry and the subcommittee, Sandoz and Scripps decided to scale back the deal. The new agreement, cleared by the federal government in 1994, called for Sandoz to provide $20 million annually for five years. In return, it gained the right to review all inventions from Scripps and the right to license nearly half of them. But Sandoz gave up all the rights to control the activities of Scripps scientists themselves.

This chapter from Novartis' history is very much on the minds of students and faculty at Berkeley these days as they debate the Novartis deal. "We've made sure that all academic senate members are aware of the (Sandoz/Scripps) situation as they review this deal," said Spear.


On the surface, the Berkeley proposal seems to answer the questions raised by the Scripps affair. Of the proposed $50 million, $3.3 million would go to the department of microbial biology each year for five years to fund research. Novartis would have the first right to negotiate a licensing agreement on discoveries resulting from this research; Berkeley would hold the patent rights. But Novartis would only be able to gain negotiating rights to a percentage of the inventions based on its annual financial contribution.

The annual budget of the department is roughly $12 million, according to university officials. The $3.3 million would be added into this figure, so Novartis would have rights to a little over 20 percent of the total research conducted by the department.

Novartis is to have additional roles within the department, however, including representation on two key committees. One, which will set up the guidelines for the research program, will have three Novartis scientists and three Berkeley faculty. The second committee, which will have power to decide which projects will receive the funding from the annual grant purse, theoretically will be in the control of the university, as three Berkeley faculty will sit on the board with two Novartis scientists.


One detail that remains up in the air is whether any Novartis scientists will become adjunct faculty; the proposal calls for as many as three Novartis employees to be candidates for adjunct faculty. University officials stress that these positions are not automatically created by the deal. The scientists will have to be nominated by faculty and their candidacy will fall under the same scrutiny that other faculty candidates do.

Perhaps the biggest question that remains unanswered to date is whether academics will end up getting compromised under a deal like this. Gordon Rausser, dean of the College of Natural Resources, argues that the Novartis deal brings more freedom than any alternative scenario. "If we don't do this, then you know what Novartis will do? They'll just go and cherry pick the faculty," says Rausser. "They won't have to provide any infrastructure support, and they won't be accountable to anyone. And the professors will be answerable only to Novartis. That's a world I want to get away from."

Faculty and students outside the department of microbial biology see the situation differently. They fear that the emphasis within the college will focus on that which generates research dollars, work that gets funded by corporations that results in products. Research that focuses on discovering and developing low-tech, natural methods of pest control such as biological control, for example, which doesn't yield a salable product, might receive less funding and less emphasis. This will mean that opportunities for students will be skewed toward biotechnology and away from biological control, warns biology professor Joe Hancock, a professor of plant pathology who has served on the Berkeley faculty at the college for 30 years.


A change that would emphasize biotechnology research -- research that results in a commercial product, would also alter the curriculum at the university. "Because [Novartis] is looking for research, and research and academics are closely tied, then academics will likely change," said Susan Langland West, a doctoral student in the department of environmental science and policy management.

Spear concedes that this issue is not one that can be answered when parties are discussing a deal -- everything is still too hypothetical. Like any experiment, you have to let it run its course to draw the proper conclusions. "This is one of the things we'll have to monitor as the research goes on," he said.

Kristi Coale

Kristi Coale is a San Francisco freelance journalist who covers science. She is currently working on a project on the environmental impact of agricultural biotechnology for the Center for Investigative Reporting.

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