Case | HBS Case Collection | October 2007 (Revised July 2013)

Vertex Pharmaceuticals and the Cystic Fibrosis Foundation: Venture Philanthropy Funding for Biotech

by Robert F. Higgins, Sophie LaMontagne and Brent Kazan

Abstract

In 2001, Vertex Pharmaceuticals Incorporated acquired the San Diego-based biotech company, Aurora Biosciences. The combination of Vertex's and Aurora's technologies would improve the flow of novel drug candidates into development. However, several questions related to the integration of Aurora into Vertex were still unresolved, the most pressing being Aurora's major collaboration with the Cystic Fibrosis Foundation (CFF). Were venture philanthropy and foundation deals an appropriate funding mechanism for a public company like Vertex? How could the board of Vertex and the CFF fundamentally align the objectives of a for-profit company with those of a non-profit institution? Those were the questions faced by the Vertex executives.

Keywords: philanthropy; philanthropy funding; innovation; funding model; Venture Capital; Partners and Partnerships; Financing and Loans; Investment Funds; Acquisition; Giving and Philanthropy; Biotechnology Industry; Pharmaceutical Industry; San Diego;

Citation:

Higgins, Robert F., Sophie LaMontagne, and Brent Kazan. "Vertex Pharmaceuticals and the Cystic Fibrosis Foundation: Venture Philanthropy Funding for Biotech." Harvard Business School Case 808-005, October 2007. (Revised July 2013.)