NEWS OF TH E WEEK
NIH ADAPTS GRANT RESUBMISSION RULE SEEKING SUCCESS Falling grant success rates have in part prompted NIH to allow applicants to submit rejected grants a second time.
RESEARCH FUNDING: Community concern that too much good science was being rejected fuels change
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HE NATIONAL INSTITUTES of Health will al-
low scientists whose research grants have been rejected to resubmit funding requests a second time, the agency announced earlier this month. Applicants who have rewritten their research grants once (stage A1) and had them rejected Success rate for NIH grants, % will be able to submit essentially the 25 same application a second time. But they will have to submit the application as though it is a new grant (A0), 20 with no reference to suggestions from previous peer reviewers. 15 The move comes in response to an 2004 05 06 07 08 09 10 11 12 13 outpouring of concern from the sciNOTE: Success rates are for grant applications entific community that limiting grant NIH wide. SOURCE: NIH submissions forces scientists—especially vulnerable early-career researchers—to abandon successful research pathways. The issue has become even more pronounced in recent years, as NIH grant
HOSTILE BID FOR ALLERGAN BUSINESS: Activist investor joins Valeant in seeking maker of Botox for $47 billion
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$47 billion cash-and-stock offer to buy specialty pharmaceuticals maker Allergan in a deal backed by activist investor William A. Ackman. Adding Allergan’s $6.3 billion in 2013 sales to Valeant would create a firm with revenues of $11.7 billion. Valeant would save some $2.7 billion by combining headquarters, eliminating duplicative operations, and cutting research spending. Allergan, the maker of Botox wrinkle reducer, says it is examining Valeant’s proposal. However, on April 22, the same day that Valeant made its hostile bid, Allergan also adopted a shareholder rights plan intended to make a deal more costly for a hostile acquirer and to provide Allergan’s board more time to assess the Valeant offer. The combined firms would be a leader in SHU TTERSTOCK
Allergan expects sales of more than $2 billion in 2014 for Botox botulinum toxin.
ALEANT PHARMACEUTICALS has made a
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success rates have dropped to record lows because of federal budget cuts. “We wanted to be supportive of your concerns,” NIH Deputy Director Sally Rockey explained in announcing the policy change. “We believe this is a very positive move for our applicants.” Until five years ago, grantees were allowed to submit essentially the same grant application multiple times. NIH changed that policy in 2009 in an attempt to lessen the burden on peer reviewers and to encourage reviewers to fund good grants the first time around. “The policy that allowed only two strikes was very harmful to early-career investigators who were just learning their craft, and it was unfair to people who barely missed the payline,” says Howard Garrison, public affairs director for the Federation of American Societies for Experimental Biology. The result was that scientists were often rewriting grants to make work they thought was important look new, even if it wasn’t. Now, “you don’t need to artificially reinvent the science,” says Seth M. Cohen, chair of the department of chemistry and biochemistry at the University of California, San Diego. As a member of an NIH study section, which will likely receive an increase in applications, Cohen says, “It is probably a good policy change and a good compromise.” But it could force NIH funding rates even lower because of an increased number of grants. “It could make what is a difficult situation even worse.”—ANDREA WIDENER
ophthalmology, dermatology, aesthetics, and dental markets, according to Valeant CEO J. Michael Pearson. Together, the two companies can achieve “significant synergies by applying Valeant’s unique operating model to a combined set of assets,” he says. That model, applied in previous acquisitions, involves radical cost cutting and a sharp reduction in R&D. In Allergan’s case, Valeant would eliminate earlystage research programs. On its own, Allergan plans to increase R&D spending from about $1 billion in 2013 to $1.5 billion by 2018. Valeant, in contrast, anticipates a $300 million R&D budget for the combined firm. Ackman, who heads private equity firm Pershing Square Capital Management and has amassed just under 10% of Allergan’s shares, says the proposed deal is “the most strategic and value-creating transaction I have ever analyzed.” He has committed his shares to the takeover. The activist investor has influenced others firms including Air Products & Chemicals, which in September decided to replace its CEO, John E. McGlade. But the Allergan bid marks the first time that Ackman has formed an alliance with an acquirer to target another firm. In a note to clients, Marc Goodman, an analyst with investment banking firm UBS, says he doesn’t believe Allergan’s management has any interest in selling. But if Valeant succeeds in its bid, “it should be a wake-up call to the investment community that no company is untouchable.”—MARC REISCH
APRIL 28, 2014
