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Big Pharma, Short on Blockbusters, Outsources the Science

French drug giant Sanofi SA is betting that a biotech partnership named after a Star Trek premise will help it crack one of the biggest mysteries in pharmaceutical research: molecules that drive diseases, including some cancers, that have been considered “undruggable” because of their shape.

Four-and-a-half years in, Sanofi now believes its partnership, Warp Drive Bio, is close to getting its first new drug candidate. But the path has been painful. The venture has gone through three CEOs, two organizational structures, dizzying shifts in priorities—and so far, no marketable products.

Such challenges are playing out around the drug industry, which had long relied on their own scientists to discover new products. With a string of expensive failures, Big Pharma has come to realize over the past decade that the science was getting too complex for anyone to master alone.

Companies like Sanofi, Johnson & Johnson and others have been re-engineering how they find new treatments, striking partnerships with bright university researchers and deals with promising biotechs. They have even agreed to work with one another to better understand diseases.

“You can’t do it alone. You have to say, ‘Hey, we might have been good in the past, but we need insights from others,’ ” says Paul Stoffels, chief scientific officer at J&J.

About 70% of the industry’s new sales today come from drugs originated in small companies, up from 30% in 1990, according to the Boston Consulting Group. And new-drug approvals are up from the low levels of just a few years ago.

Yet pharmaceutical companies and their partners have struggled to reconcile different personalities, distinct ways of working and sometimes, competing goals.

“How do you stimulate innovation without killing it in the process?” says Elias Zerhouni, Sanofi’s research and development chief.

The collaboration began in Paris in 2011, when Dr. Zerhouni was just months into his new job, following stints at Johns Hopkins University’s medical school and 6½ years running the National Institutes of Health.

Sanofi’s top sellers like the sleep aid Ambien and the blood-thinner Plavix were losing patent protection. Yet since 2008, the company had launched just three new products whose sales could offset the losses.

Dr. Zerhouni, a physician and biomedical engineer who had started five companies while in academia, figured that if Sanofi was going to cure its innovation ills, it needed to collaborate with world-class scientists outside of Big Pharma.

So one afternoon in May, he sat down with Harvard University professor Gregory Verdine at the College de France in Paris. Dr. Verdine had made groundbreaking discoveries at the crossroads of biology and chemistry, and had formed seven companies that developed drugs for hepatitis C and lymphoma.

Dr. Zerhouni grew excited as he listened to Dr. Verdine, hunched over a computer in a small conference room, sketch out his idea for an eighth company. He proposed a Holy Grail of drug research: targeting proteins that are relatively flat and inside cells.

These proteins play pivotal roles in a lot of diseases, including many cancers. But their flat surfaces protect them from the current crop of biotech drugs, which typically work by locking onto deep pockets in the proteins, outside cells, to stop them from connecting to other important molecules.

They were considered “undruggable” because researchers had failed to find a way to link a drug to one of these flat proteins inside a cell.

Mother Nature had, though. A few bacteria, including one found in the soil of Easter Island, did in certain situations make molecules that could cross cell walls and connect with the flat proteins inside. These molecules were the basis for drugs to help patients recover from organ transplants.

Dr. Verdine was hoping to use the latest gene-mapping technology to scour databases of bacteria for other similar bacteria. Some, he figured, had to be able to hook to flat proteins and point the way to new drugs.

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