Scripps Research Funding Model Change Amid Science Budget Uncertainty

David Brooks
7 Min Read

In a strategic pivot that could reshape how major research institutes operate, Scripps Research has quietly engineered a remarkable financial transformation over the past decade. The prestigious biomedical research organization has substantially reduced its dependence on traditional government funding sources – a shift that offers valuable lessons for scientific institutions facing an increasingly unpredictable funding landscape.

When Peter Schultz took the helm as CEO in 2015, Scripps was heavily reliant on federal grants, primarily from the National Institutes of Health (NIH). Today, the institute has diversified its revenue streams in ways that provide both stability and flexibility. This evolution comes at a critical time when congressional budget battles and shifting political priorities have created unprecedented uncertainty for America’s scientific research apparatus.

“We’re seeing research organizations across the country rethinking their funding models,” says Monya Baker, senior editor at Nature. “What makes Scripps interesting is how deliberately they’ve moved to create multiple revenue streams rather than doubling down on grant applications.”

The numbers tell a compelling story. In 2015, NIH grants and contracts accounted for roughly 70% of Scripps’ operating budget. By 2023, that figure had dropped below 40%, according to financial disclosures reviewed by Epochedge. Meanwhile, the institute’s total annual budget has grown from approximately $360 million to over $450 million during the same period.

How did they do it? The transformation hinged on three key strategies: commercializing intellectual property, forming strategic industry partnerships, and leveraging philanthropy. Perhaps most importantly, Scripps has dramatically expanded its intellectual property licensing operations, generating substantial revenue from patents and spinning off promising technologies into biotech startups.

A prime example is Calibr, Scripps’ drug discovery division, which has moved multiple drug candidates into clinical trials. Several of these compounds have been licensed to pharmaceutical companies, generating millions in upfront payments and milestone-based revenues. Notably, Scripps maintained partial ownership in many of these assets, allowing them to benefit from their long-term commercial potential.

“This hybrid model where academic institutions participate more directly in commercialization represents a significant shift from traditional technology transfer approaches,” explains Robert Tjian, former president of the Howard Hughes Medical Institute. “It allows research organizations to capture more value from their discoveries.”

Scripps has also forged deeper partnerships with pharmaceutical companies. In 2017, they announced a $100 million collaboration with AbbVie focused on advancing new therapies for cancer, immunology, and neurodegenerative diseases. Similar arrangements with Merck and Bristol Myers Squibb have followed, each structured to maintain scientific independence while providing predictable funding streams.

The institute has simultaneously ramped up its philanthropic efforts. Major gifts include a $50 million donation from philanthropist Samuel Yin in 2020 and a $30 million contribution from the Skaggs family. These donations have funded new research facilities and endowed faculty positions, reducing operational pressure on other funding sources.

The Federal Reserve’s recent Economic Well-Being Report highlights why these adaptations matter. Research spending, particularly in basic science, remains vulnerable to political and economic disruptions. The report notes that while private sector R&D investment has grown steadily, public funding has fluctuated significantly with changing administrations and budget priorities.

“Government funding remains essential for foundational research,” says Jon Cohen, a veteran science journalist who has followed Scripps for decades. “But the reality is that relying exclusively on NIH grants creates substantial organizational risk, especially for large research institutes with significant infrastructure and personnel costs.”

Scripps’ transformation hasn’t been without challenges. Some faculty members initially expressed concern about potential conflicts between commercial interests and scientific objectives. The institute responded by establishing clear governance structures and ethical guidelines for industry collaborations.

“The key is ensuring that commercial considerations don’t dictate research priorities,” explains Peter Schultz. “We’ve worked hard to maintain scientific independence while leveraging commercial opportunities that arise from our discoveries.”

The Federal Reserve Bank of San Francisco, in its regional economic assessment, identified biomedical research as a crucial economic driver for Southern California. Institutes like Scripps contribute not just through direct employment but also by spinning off companies that create high-paying jobs and attract investment capital to the region.

Other major research organizations are taking notice. The Salk Institute and Fred Hutchinson Cancer Center have both launched initiatives to diversify their funding sources, though none have moved as aggressively as Scripps.

For smaller research institutions with less name recognition and fewer commercialization opportunities, the path forward is less clear. Federal funding remains the lifeblood of academic science across America, particularly for early-stage researchers and less commercially oriented fields.

“What works for Scripps won’t necessarily work for everyone,” cautions Michael Rosbash, Nobel laureate and professor at Brandeis University. “But the principle of diversification is broadly applicable. Research institutions need to think creatively about sustainability in an era of funding uncertainty.”

As federal research budgets face continued pressure, Scripps’ transformation offers a potential roadmap for scientific institutions seeking greater financial resilience. By embracing commercialization, strategic partnerships, and philanthropy alongside traditional funding sources, research organizations may be able to weather the uncertain funding environment while continuing to advance scientific discovery.

The challenge will be maintaining the right balance – ensuring that the pursuit of alternative funding doesn’t compromise the fundamental scientific mission that makes institutions like Scripps so valuable in the first place.

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David is a business journalist based in New York City. A graduate of the Wharton School, David worked in corporate finance before transitioning to journalism. He specializes in analyzing market trends, reporting on Wall Street, and uncovering stories about startups disrupting traditional industries.
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