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by zozbot234
2380 days ago
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> Most academic institutions don't have a mechanism for doing something "on credit" and hoping to win a prize that covers the costs and then some. Some do, actually. It's called an "endowment". Unless by mechanism you meant an internal policy to allow for this - but that's the sort of stuff that can be changed with relative ease. |
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The median Phase II trial costs about $10M and has a 30% success rate; Phase III costs a lot more (say 2x that), but has better odds (58% advance to approval, and 85% of those get approved). Neglecting Phase I and everything before it, the expected cost is therefore about $16M (over ~3 years) and gets you an approved drug 15% of the time.
There are only 11 individual universities (plus three university systems) with endowments over $10B, but a surprising number with endowments in the $1B range. The draw rate on endowments is usually capped at 5% so that the principal remains intact, giving you around $50M for the entire university's endowment income.
A single trial would therefore consume about 10% of the endowment income per year--and with a 15% success rate, it's probably not going to win anything. There's no way a university president is going to let a group of researchers make a gamble like that.