A team of high-powered scientists and billionaire investors said Friday that they’re launching a biomedical institute in Cambridge’s Kendall Square with $500 million in private funding with the aim of shortening the path from research breakthroughs to life-saving medicines.
The institute, called Arena BioWorks, will put drug discovery and company creation under one roof, upending the traditional model where academic research and venture-backed drug development are separate.
Backed by deep-pocketed investors including Steve Pagliuca, the former co-chair of Bain Capital and Celtics co-owner, and high-tech mogul Michael Dell, Arena has already lured top scientists from academic labs with lucrative compensation packages, but so far has publicly named only a few.
But already Arena’s hiring spree has raised some concerns of a brain drain at universities, leaving them to struggle to compete for the top researchers and train new generations of scientists.
Arena has been in the planning stages for more than two years. For the past six months, it has operated in stealth mode at 399 Binney Street, near the Landmark Kendall Square Cinema, with an initial staff of about 50 scientists, most plucked from academic labs at universities in Massachusetts and across the country.
It’s being led by cofounder and chief executive Stuart Schreiber, a Harvard scientist who was also one of the founders of the Broad Institute of MIT and Harvard. Schreiber recently stepped away from his Broad role and Harvard teaching post to devote his time to building Arena.
On Friday, a Broad spokesperson, Allessandra DiCorato, said the institute was “excited to see this new addition to Kendall Square“ and would explore opportunities to collaborate with Arena.
“The world needs both nonprofit research institutes and for-profit companies to power progress and improve human health,” she said.
Schreiber and his Arena colleagues have enticed scientists to leave tenured posts at universities for bigger salaries than those offered by academic labs, which rely heavily on government grants. Arena scientists will deploy next-generation technologies, from gene editing to machine learning, to tackle cancers, brain diseases, immune system disorders, and maladies linked to aging.
“We fund the basic science, we build drug discovery capabilities with a laser focus on disease, and try to get at unique understandings of disease we think is translatable” into medicines, Schreiber said. “It turns out that human biology and fixing disease is really, really, really hard . . . [but] we can get the very best academic researchers and biotech researchers and have them work on problems that can’t be solved in a short time frame.”
Two other Arena cofounders will join Schreiber on the institute’s management committee: Pagliuca, who will be executive chair, and Tom Cahill, founder of venture capital firm Newpath Partners.
Arena will launch with a core scientific team that includes Schreiber and J. Keith Joung, an innovator in the gene editing field who left a job at Massachusetts General Hospital to join Arena. The institute said it will announce other scientists on its team at a later date.
Pagliuca said the idea for Arena, which takes its name from a Teddy Roosevelt quote lionizing “the man who is actually in the arena,” sprang from a 2020 conversation with Schreiber and Cahill. The trio, who had advised the state and federal governments on fighting COVID, asked whether the warp-speed development and rollout of vaccines could be replicated in more normal times, Pagliuca said.
“We learned that discovery can be a lot quicker in a crisis,” he said. “Why can’t it be a lot quicker anyway so we can cure more diseases?”
That, they concluded, would require overhauling the current research model where basic discoveries at academic labs are turned over to other organizations to commercialize.
Arena plans to compensate scientists in part from revenue generated by all of the companies it spawns, not just those in the scientists’ research areas, said Pagliuca, who has invested in health care for three decades.
Schreiber said the $500 million commitment from Arena’s investment team is just the start. Arena is talking to other investors about its plan to combine basic research with launching companies
Up to 30 percent of the profits from the companies it creates will go to investors, Schreiber said. The remainder will be used to compensate scientists and company employees, support Arena operations, and bankroll an endowment to fund ongoing research. “The model would enable continued funding beyond 10 years,” Schreiber said.
Schreiber’s involvement in a new for-profit venture was rumored for months. In September, the Broad confirmed that he was scaling back his work at the renowned biomedical center and “transitioning his status . . . as he enters the next phase of his career.” But the Broad had provided no further details.
Arena’s model, if embraced more widely, could disrupt the teaching and incentive structures at traditional institutions, potentially reducing reliance on university technology transfer and venture capital outlays.
Ruth Lehmann, head of the MIT-affiliated Whitehead Institute for Biomedical Research, a nonprofit, said she was disappointed that veteran Arena scientists were leaving academia and depriving students and post-doctoral researchers of the mentoring essential to producing a new generation of scientists.
“Somebody has to educate the next generation, and that’s happening at universities,” said Lehmann, who also teaches biology at MIT. The new profit-driven entity, she said, “was creating haves and have-nots, and it’s a shame that universities have to say now that we’re the have-nots.”
Robert Langer, the prolific inventor and biomedical engineering professor at MIT, has been involved in scores of startup biotechs. He agreed with Lehmann about the importance of nurturing younger scientists in academic settings, estimating that 400 of his former students and postdocs are now professors around the world.
But “I don’t think it’s necessarily an either or,” said Langer, whose lab is located in the nonprofit Koch Institute for Integrative Cancer Research at MIT. “I think what the Whitehead does is fantastic, but this is great too.”
Langer said he just wants to see money going into cutting-edge research “that can save people’s lives.”
Arena has set up shop in a neighborhood chockablock with nonprofit research institutes affiliated with universities. Among them are the Broad, the Whitehead, the Koch, the McGovern Institute for Brain Research at MIT, the Picower Institute for Learning and Memory, and the Johann Radon Institute for Computational and Applied Mathematics.
The new institute will be fueled by a group of investors that, in addition to Pagliuca, and Dell, founder of Dell Computer, include Michael Chambers, founder of life sciences manufacturer Aldevron; Jim Breyer, founder of venture firm Breyer Capital; and, Elisabeth DeLuca, the widow of Subway cofounder Fred DeLuca.
Robert Weisman can be reached at robert.weisman@globe.com. Jonathan Saltzman can be reached at jonathan.saltzman@globe.com.