University Technology Transfer: Change is Needed 
Posted by Carlos on Oct 27, 2016

Should they all be entrepreneurs?

A few weeks ago, we attended the first annual Commercializing Biotech Innovation Conference in Syracuse, New York. 

The conference was held in the very new Central New York Biotech Accelerator in Syracuse (which is an outstanding facility, by the way). 

A central theme of the conference  (and a subject which was raised several times during the panel discussions) was the role which Universities and Tech Transfer Offices (TTOs) play in the discovery, development, and commercialization of novel technologies and products. 

One of the challenges raised is that TTOs at large universities have an unending stream of technologies, patents, and raw ideas to evaluate and process. Some schools simply toss all of them in an online database, with the hope that a multinational company or investor finds it and tries to license it. 

Others try to market their particular school or university in very broad terms (number of faculty, number of graduate students, amount of grant funding received, etc.), without specific areas of focus or emphasis. 

Other TTO are more progressive, prioritizing and even investing in the advancement of novel ideas, preparing them for the license or new company formation which hopefully emerges. 

But how should a TTO prioritize? Which technologies deserve more attention and resources? Not all assets and technologies are equally valuable. But what does valuable in this context mean? 

A TTO can hire a group of consultants and evaluate each and every asset by some standard metrics, and then prioritize accordingly. 

But that can be an expensive, lengthy, and never-ending process. It would work fine for a finite group of opportunities, but not as an ongoing process, unless those capabilities are hired and incorporated into the day-to-day activities of the office on a full time basis. 

We believe TTOs should take more of a venture capital-like approach to prioritize assets and technologies. Specifically, a key driver in the prioritization process should be matching technologies with the stated desires of industry. 

From a pharmaceutical licensing perspective, some therapeutic areas are perceived as being more valuable at an early stage than others. For example, early-stage oncology programs have a fighting chance of securing a licensee, while others are a challenge to find licensing partners without significant investment, such as diabetes. 

That doesn’t mean that the industry is right, or even rationale. One can make innumerable arguments in support of an opportunity which does not interest licensing parters. But it is what it is. IN the end, multinational companies have their own logic, ROI requirements, and shareholder expectations which should drive their licensing strategy. 

So while no pitch deck will change their minds if the opportunity doesn’t fit, it also means that TTO prioritization should reflect this realities. 

* * * * *

We recognize that TTOs have obligations beyond the life sciences. Indeed, TTOs are often asked to evaluate opportunities across industries, such as clean energy, waste management, transportation, materials…the list is endless. 

How do we handle this situation? Should we drop everything which has no obvious chance to convert into a licenseable asset or company or product? But what about other industries? It’s a difficult question, for a few reasons: 

Unknown Future Applications – This argument states that research today may result in advances in the future which we cannot currently foresee. Indeed, this has proven to be true in many instances, such as digital image compression and transmission, materials sciences, and others. 

Liberal Arts – If we prioritize solely on the basis of financial potential and job creation, does this come at the expense of research and other funding for liberal arts? And, how do we prioritize? 

Should the preservation of manuscripts and paintings take priority over efforts to re-interpret European history? Indeed, a perusal of our library would lead readers to think that this would be a disappointment as books like Justinian’s FleaGod’s CrucibleA Distant Mirror, and others help us understand current events. Would these texts be published (or possible to be written) without the academic research supported by grants and other sources of funding? Probably not. Yet, they are valuable in their own way. 

Ultimately, Universities conducting research (defined broadly) May have to make decisions about what is important to them in the context of their own stakeholders (state government, faculty, alumni, students). 

* * * * *

Now your average PI may have no interest in forming new companies or commercializing their work. Indeed, their work and reputation may be solely based on the number of publications in quality journals. 

Should company formation be a complimentary metric to measure PI success and achievement? 

It’s an interesting question. 

One can argue that a PI with a single company has the potential to affect more positive, real societal benefits than a stack of publications. Just a single company can develop products which cure disease, create jobs, create investment opportunities, and enhance the economic vitality of a region. 

Conversely, the impact a publication or body of work can have on future research is unknown, or at least very difficult to predict. How many companies did Einstein start? 

One drawback is that the economically-incentivized PI is less likely to share his or her research with colleagues prior to patenting. The willingness to disclose and expose new data under scrutiny is precisely what a University should encourage. 

But create an overtly entrepreneurial atmosphere and neighboring PIs are suddenly competing against each other for University resources, investors, and graduate students. 

“You see universities which have glossy brochures, with pictures of people collaborating with industry. But if you look behind the curtain, there’s still a lot of universities that put all their emphasis on research and education…”

Paul Van Dun, Karolinska Institute

TTOs are in a real bind. They are expected to be profit centers for the University through licenses and equity holdings in spin outs, yet this rarely happens. Indeed, it is rare for TTOs to generate enough licensing income to cover their own expenses, let alone be a major profit center for the university. 

This expectation has created problems partly because it is based on the underlying faulty assumption that patents = profits. 

Patents are nice, even necessary. And building a research policy which incoproates grant-seeking research, publications, and patents is very common.

But ultimately, patents are simply ideas, supported by data. The true value is in the unlocking of the idea and transforming it into a product or service that a market will pay for. 

Perhaps the most obvious example of this concept is the University of Rochester versus G.D. Searle case. While the Rochester patents describe methods for screening for COX II selectivity, and even describes methods for selectively inhibiting prostaglandin synthesis, none of the patents describe the actually drug product which can achieve this benefit. 

So while the University of Rochester may have had the idea, it took large teams of chemists, biologics, clinical scientists, and other experts at various pharmaceutical companies to develop COX II inhibitors, screen them, test them, develop them, and commercialize them. 

These companies unlocked the value, and were rewarded accordingly. 

In other words, a patent is a legal arrangement. But building value requires business arrangements. And that is an entirely different matter. 

So where does this a leave us? 

  • TTO strategies and tactics need refinement, especially in the prioritization of licensing/new company formation opportunities

  • This can only happen in the context of the University’s goals and objectives, and with consideration of key stakeholders. Note that a private school and a neighboring state school of comparable size may have very different approaches towards TTO, depending on the needs and expectations of one versus the other. 

  • Faculty entrepreneurship should continue to be encouraged for selected universities in selected areas of research, suggesting someone is going to have to make these decisions. Importantly, entrepreneurship should be taken into consideration during tenure discussions, but in a nuanced way which does not penalize active researchers who work in an important field which does not lend itself to entrepreneurship. 

 

 

 

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