Gates Foundation debuts nonprofit biotech firm at BIO

The Gates Medical Research Institute will develop products for malaria, tuberculosis, enteric and diarrheal diseases.

Biotechnology is one of the hottest areas in business and investing, so it might seem a bit counterintuitive that a new biotechnology firm just launched that won’t seek to make any profit. But the new nonprofit drugmaker seeks to do precisely that, in order to tackle some of the worst health crises in the developing world.

The Bill and Melinda Gates Medical Research Institute – itself a subsidiary of the Bill and Melinda Gates Foundation – debuted this week, coinciding with the Biotechnology Innovation Organization meeting in Boston. Gates Foundation CEO Sue Desmond-Hellman and Gates MRI CEO Penny Heaton took part in a fireside chat to discuss the organization’s mission of developing products for diseases that plague developing countries, particularly malaria, tuberculosis and enteric and diarrheal diseases.

The Gates Foundation announced its intention to launch the Gates MRI last year, with an annual operating budget of $100 million, 80-120 full-time employees and locations in Boston and Seattle, where the Gates Foundation is based.

In a video interview on BIO’s YouTube channel, Heaton said the Gates MRI will collaborate with the private sector to apply the latest technology and tools to combat the aforementioned diseases, as well as with governments to co-fund large Phase III clinical trials.

The Gates Foundation is not alone in coming up with the idea of a non-profit drug company to tackle health issues that for-profit drugmakers might not. Earlier this year, several hospital groups that had been struggling with high prices and shortages banded together to form their own non-profit organization to manufacture generic drugs. The effort was lead by Salt Lake City-based Intermountain Healthcare, along with Ascension and SSM Health – both based in St. Louis – and Livonia, Michigan-based Trinity Health, with the Department of Veterans Affairs playing an advisory role. The organizations together represent more than 450 hospitals.

In addition to not being the lone effort, the Gates Foundation’s idea isn’t exactly new, either. In a 2005 article, executives from the San Francisco-based Institute for OneWorld Health explored the idea and challenges confronting nonprofit pharmaceutical companies developing and distributing drugs for infectious diseases common in the developing world. Comparing the nonprofit model with public-private partnerships, the article concluded that early successes – namely the organization’s own experiences in malaria, Chagas disease and visceral leishmaniasis – raised hopes that such nonprofits could work. The institute’s efforts have also received funding from the Gates Foundation.

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Photo: Alaric DeArment, MedCity News