Introduction. The contraction in pharmaceutical drug discovery operations in the past decade has been counter--balanced by a significant rise in the number of academic drug discovery groups. In addition, pharmaceutical companies that used to operate in completely independent, vertically--integrated operations for drug discovery are now collaborating more with each other, and with academic groups. We are in a new era of drug discovery.Areas Covered. This review provides an overview of the current status of academic drug discovery groups, their achievements and the challenges they face,, together with perspectives on ways to achieve improved outcomes.Expert Opinion. Academic groups have made important contributions to drug discovery, from its earliest days and continue to do so today. However, modern drug discovery and development is exceedingly complex, and has high failure rates, principally because human biology is complex and poorly understood.