Bill and Melinda Gates Foundation Spins Out a Nonprofit Biotech Company

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The Bill & Melinda Gates Foundation has spun off a biotech company called The Bill & Melinda Gates Medical Research Institute (MRI) located in Boston. Although it found its temporary space in Cambridge, Massachusetts in January, it “officially” launched Thursday at the BIO International Convention in Boston.

The Gates Foundation apparently had planned to launch a medical research institute within the first few years of its inception, but chose to wait. However, as more and more biotech and pharmaceutical executives were drawn to the foundation, the idea began to coalesce. According to Trevor Mundel, head of the Gates Foundation’s global health operations, the decision was made during a phone call from Bill and Melinda Gates in Seattle when he was in London. As Forbes reports, “They chose to put their names on the new effort, making it not just something the foundation is doing but central to its efforts.”

Mundel handpicked Penny Heaton to direct the “biotech-within-a-charity.” Her pedigree is terrific—formerly director of the Gates Foundation, and prior to that, Global Head Clinical Research Clusters for Novartis Vaccines and Diagnostics. Before joining Novartis, Heaton was the chief medical officer and vice president of Development for Novavax, with earlier work with Merck & Co. and the Centers for Disease Control and Prevention (CDC).

In an interview with STAT, Heaton said, “We don’t have to worry about revenue, return on investment. Our bottom line is lives saved. So it’s a pretty exciting place to be.”

If Heaton’s background wasn’t enough of a clue, MRI’s focused is on diseases that disproportionately affect the poor around the world, such as malaria, tuberculosis, and enteric diseases, which are caused by viruses, bacteria or parasites. Enteric diseases affect the digestive system causing serious and life-threatening diarrhea.

The MRI has plans to have a staff of about 120 in the next three years. Its focus won’t be drug discovery, but instead expects to work with academic laboratories or biotech firms to help shepherd those programs through the early-to-middle stage drug development. At that point, MRI will hunt for commercial partners to take over.

Because of this not-for-profit approach, MRI isn’t focused on buying or owning intellectual property. That isn’t to say it doesn’t want the projects to pay for themselves or even fund further work, but that’s not the priority. STAT notes, “But any products it passes on to commercial partners will come with strings attached—commitments that the products will be made available at affordable prices, in the needed volume, and within a specified time frame.”

Heaton points out that one reason the Gates Foundation decided to found MRI was simply a look at the facts. “TB, still 1.7 million deaths every year,” she told STAT. “You look at malaria, nearly 500,000 deaths every year. You look at enteric disease and while the rotavirus vaccines have done amazing things, we still have 500,000 deaths from enteric diseases every year in children under five. And so we were thinking about: What can we do to start to accelerate finding solutions for these areas?”

The lead project for MRI is testing if giving adolescents the Bacillus Calmette-Guérin (BCG) vaccine, which infants already receive, can increase their resistance to tuberculosis. There was already a study performed in South Africa and the scientists found that there was a 45 percent decrease in sustained infection rates among the adolescents who received the booster vaccine.

So part of MRI’s approach will be similar to regular biotech companies—run clinical trials and herd drugs toward regulatory approvals. Sometimes it will hold the regulatory ownership of a drug and other times it will act as more of a consultant and partner.

Heaton told STAT, “Our mission is to develop products that will enable the end of diarrheal disease deaths, eradication of malaria … and to accelerate the end of the TB  epidemic.”


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