<p>Emory in the news:
Emory's research paying big dividends.</p>
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<p>Atlanta's Emory, Built on Coke, Has New Windfall Via AIDS Drug </p>
<p>July 29 (Bloomberg) -- At Atlanta's Emory University on May 12, religion lecturer Bobbi Patterson proposed what is called the <code>Coca-Cola Toast'' to 1,763 students due to graduate four days later. At the same party, seniors received commemorative Coke bottles engraved with</code>Class of 2005.'' </p>
<p>Since Coca-Cola Co. founder Asa Candler donated $1 million to Emory in 1914, the university's fortunes have been tied to the world's largest maker of soft drinks, based 6 miles (10 kilometers) across town. The reliance is declining as the college makes money from medical research, including this month's $540 million sale of an AIDS drug to Gilead Sciences Inc. and Royalty Pharma AG. </p>
<p>The university will use its $324 million share of the proceeds to attract more talent, says Emory President James Wagner. U.S. News & World Report last August ranked Emory 20th among ``America's best colleges.''
This income will contribute to the transformation of the university,'' says Wagner, 52.We want to be able to recruit, retain and reward top researchers and attract the top students.''
The sale of the AIDS drug emtricitabine, developed in the 1980s by three university scientists, represents the largest lump- sum payment for a drug to a university, says Dung Nguyen, director of the global health-care investment banking group at New York-based Citigroup Inc., which represented Emory.
More drugs are likely to be sold, says Mike Mandl, Emory's executive vice president of finance.
Drug Pipeline
The university's researchers have developed seven drugs that are on the market today, 11 that are in various stages of human trials, and 10 others that still have to start human trials. They have also developed an AIDS vaccine, which is in the initial stage of clinical trials.
We have a pipeline that would be the envy of many pharmaceutical companies,'' Mandl says.They may not be worth $500 million each, but they will be in the tens of millions.''
The college will receive 60 percent of the AIDS drug sale, with the remaining 40 percent, or $216 million, going to Emory researchers Dennis Liotta, Raymond Schinazi and Woo-Baeg Choi.
Emtricitabine, approved by the U.S. Food and Drug Administration in July 2003, had $57.6 million in sales in 2004, while a combination pill that contains the drug had sales of $67.9 million, says Erin Edgley, spokeswoman for Foster City, California-based Gilead. Before the purchase, Gilead and Royalty Pharma, whose headquarters are in Schaffhausen, Swizerland, sold emtricitabine under license.
The drug slows the spread in the body of the HIV virus, which causes AIDS.
Diversification of Investments
Income from medical research and a diversification of investment assets have changed the funding base of a university that, for decades, was all about Coca-Cola.
Besides the $1 million gift from Candler, Emory benefited from the largesse of Robert Woodruff, chief executive of Coca- Cola from 1923 to 1981, and his brother George, who, in 1979, donated $105 million in Coke stock. The shares rose 55-fold to peak at $88.94 in July 1998. They have since lost half their value, closing at $44.39 on July 28 in New York Stock Exchange composite trading.
Candler never attended the university, which was founded in 1836, though his brother Warren served as the college's president. Robert Woodruff dropped out of Emory at the suggestion of the school's president. His brother George didn't go to the university.
In 2004, Emory's $4.5 billion endowment was the largest among Southeastern universities and the eighth-biggest nationwide, according to the National Association of College and University Business Officers.
Share Sales
Five years ago, Coca-Cola stock accounted for as much as 50 percent of Emory's endowment. Now, it's down to about 19 percent, says finance chief Mandl.
Emory has been selling Coca-Cola shares during the past four years. The sales were aimed solely at diversifying the university's funding and had nothing to do with how the stock might perform, says Mandl.
The share sales have been very thoughtful,'' says James Williams, a Coca-Cola director and chairman of the Woodruff Foundation, a $2 billion private foundation that supports charitable, scientific and educational activities.I really couldn't feel better about Emory and its leadership.''
In September, the university will begin a drive to seek new funding sources in a campaign to raise more than $1 billion.
``We will work hard to broaden our base,'' says President Wagner.
The university also wants to raise its stature among potential students and faculty, and plans to hire its first marketing executive, Wagner says.
Jimmy Carter
While Emory, whose regular lecturers include former President Jimmy Carter, is well known in the eastern U.S., half of Midwesterners don't recognize its name, according to a university survey.
Wagner, who drinks Diet Coke, says traditions that are tied to the soft-drink maker, such as the ``Coca-Cola Toast'' and a similar ceremony for incoming freshmen, won't die as Emory becomes less reliant on the company. </p>
<p><code>The university owes to the largesse and philanthropy of the Coca-Cola Co.,'' Wagner says.</code>Coca-Cola is not just an American icon, but the most recognized brand in the world. We have enjoyed pride in our roots.'' </p>
<p>To contact the reporter on this story:</p>
<p>Steve Matthews in Atlanta at <a href="mailto:smatthews@bloomberg.net">smatthews@bloomberg.net</a>.</p>
<p>Last Updated: July 29, 2005 00:16 EDT</p>