A new model for translational research and drug repositioning has recently been established based on three-way partnerships between public funders, the pharmaceutical industry and academic investigators. Through two pioneering initiatives - one involving the Medical Research Council in the United Kingdom and one involving the National Center for Advancing Translational Sciences of the National Institutes of Health in the United States - new investigations of highly characterized investigational compounds have been funded and are leading to the exploration of known mechanisms in new disease areas. This model has been extended beyond these first two initiatives. Here, we discuss the progress to date and the unique requirements and challenges for this model.