In the past six months, Duke University and UNC-Chapel Hill have opened drug discovery centers and recruited GlaxoSmithKline executives to lead them. As director of Duke's new center, Dr. Allen Roses plans to go one step further. A researcher who has spent most of his career studying Alzheimer's disease, Roses wants to establish a virtual pharmaceutical company at the university.

The idea is to "combine the brainpower of academia with the know-how and money of the pharmaceutical industry," he said.

Several universities have created drug discovery centers in the past year or two, including Emory University in Atlanta and Vanderbilt University in Nashville, Tenn.

The efforts follow years of turmoil in the pharmaceutical industry. Despite major funding increases for research and development -- from about $15.2 billion in 1995 to $44.5 billion last year -- the number of new medicines receiving regulatory approval has stagnated. Meanwhile, large drug makers are increasingly squeezed by competition from cheaper generic medicines.

Struggling to make up billions in lost sales every year, drug makers have restructured, reorganized and laid off workers to reduce expenses. In the past year, Pfizer, GSK, Novartis, AstraZeneca and Bayer have announced nearly 30,000 job cuts worldwide.

Pharmaceutical executives who lost their jobs in mergers and cutbacks used to go to the competition or become chief executives of small biotechnology companies.

Some, of course, still do that. But this time around, academia beckons with a promising new opportunity.

"Academia should help them if pharma can't do it all," said Dr. Sandy Williams, senior vice chancellor at Duke, referring to accomplished researchers looking for greener pastures outside the troubled pharma industry.

Williams contends that the business model of the pharmaceutical industry is under siege. But at the same time, he said, the National Institutes of Health is offering universities a new source of funding to speed up the discovery and development of drugs. By 2012, the NIH grant program aims to establish a consortium of 60 academic medical centers and provide them with $500 million a year.

Duke University was one of the first grant recipients in 2006; it will receive about $12 million annually over five years. In the spring of 2007, Williams started talking to Roses about returning to Duke. It seemed a natural fit.

Roses had made a name for himself in the 1990s, when he went public with data linking a gene to Alzheimer's disease. He developed his theory after becoming the first director of Duke's Joseph and Kathleen Bryan Alzheimer's Disease Research Center in 1985.

The theory was groundbreaking and controversial. Researchers working in Roses' laboratory at Duke were slighted in scientific publications, and Roses fought with the NIH over federal funding, the lifeblood of medical research at a university.

In 1997, Roses left Duke to join Glaxo Wellcome, a GSK predecessor. The company had bought the rights to his Alzheimer's discoveries three years earlier.

After 10 years, a merger and two changes in the company's research and development leadership, Roses had had enough. About to turn 65, he retired from GSK on Oct. 5, 2007.

He wasn't ready to call it quits, but he didn't want to go to another large pharmaceutical company or start a biotech company.

What he wanted to do was act on lessons he had learned while he was in charge of research departments at GSK's U.S. headquarters in Research Triangle Park.

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