Merck says it will invest $90 million over seven years to build a new, non-profit translational research center in San Diego to provide expertise and resources for academic scientists to maximize the therapeutic potential of their discoveries.

The company is establishing the new California Institute for Biomedical Research to accelerate the translation of basic biomedical research into innovative, new therapies. In exchange for its financial support, Merck will retain an option to obtain an exclusive commercial license to any proteins or small molecule therapeutic candidates derived from work conducted at the institute. Projects not licensed by Merck will be free to seek alternative sources of funding for further development, the company says.

“Calibr represents a new paradigm for early-stage translational research,” says Peter Schultz, a professor of chemistry at The Scripps Research Institute and serial biotech entrepreneur who will serve as director of the institute, called Calibr for short. “By leveraging the drug discovery expertise and resources of Calibr, academic researchers will have the opportunity to maximize the potential therapeutic value of their research.”

The Institute plans to access funds from government and non-government sources. Revenues derived from licenses will be shared between Calibr and the collaborating institutions.

Calibr investigators will work collaboratively with academic scientists to advance new discoveries to preclinical proof of concept at which stage commercial partnerships will be sought for further development.

Project proposals from the scientific community will be chosen on the basis of novelty, biomedical impact and technical feasibility and reviewed by a scientific advisory board headed by Harvard University professor and neurologist Christopher Walsh. In addition, an independent board of directors headed by 5AM Ventures founder and managing partner John Diekman will oversee the activities of the institute.

“Effective translation of basic biomedical research is essential to advancing the next generation of novel therapies,” says Peter Kim, president of Merck Research Laboratories and member of the Calibr scientific advisory board. “Calibr will provide an important venue where basic research and drug discovery scientists may leverage each others’ strengths in the fight against disease.”

The investment in translational research by both companies such as Merck and government entities has grown in recent years as there has been increased concern about the lack of return on investment in research and worries that not enough is being done to carry promising discoveries in the lab to the marketplace.

The National Institutes of Health in July 2011 committed $200 million in five new grants to support translational research centers across the country—including one at the David Geffen School of Medicine at the University of California, Los Angeles—and in December 2011, NIH established the its own $575 million National Center for Advancing Translational Sciences.