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Tag Archives: technology transfer

Why Technology Transfer Offices Should Focus on Sponsored Research and Ignore Royalties: In Praise of UNC’s “Express License”

A story by Xconomy’s Sylvia Pagán Westphal yesterday highlights a new approach to technology transfer licensing being taken by UNC Chapel Hill’s Office of Technology Development: The Carolina Express License. At first glance, the agreement looks, as Westphal puts it, “not very sweet for the university.” UNC takes 0.75% of any exit transaction, but no equity, no milestones and only a 1% or 2% royalty. Here’s Westphal’s description of the UNC approach (including a witty juxtaposition of religious imagery):

“They call it the holy grail of tech transfer, though critics, I reckon, think of it more as heresy. Either way, it’s gutsy.”

Count me in the group that considers it tech transfer Nirvana Nirvana.

Why? Maximizing revenue from individual licenses is the wrong priority for University tech transfer. As UNC’s Cathy Innes says:

“Where we hope to gain is that if we get a lot of companies started, more of them will be successful and have more products on the market, so we’ll be more successful…”

The University of California tech transfer system calls this the “Home Run Model,” (pdf) recognizing that even with 420 companies founded and 800 products on the market, nearly half of all licensing revenue comes from the top 5 products and the top 25 accounted for 75.6% of all 2009 licensing revenue. If more companies are started, there’s a better chance one of them is the home run.

Here’s another reason: easier licensing negotiations mean more sponsored research, and sponsored research is way bigger than licensing. For example, the USC Stevens Institute for Innovation took in $7 million in licensing revenue in 2008; but nets $500 million annually in sponsored research. Even tech transfer powerhouse Stanford takes in almost 7 times more money from industry-sponsored research than it does from licensing (PowerPoint). A small increment in sponsored research would easily offset the marginal licensing revenue sacrificed in UNC’s template.

Since December when the Express License was introduced, it has been used to found 6 companies out of UNC. Whether these six succeed or fail, I bet every person involved — the P.I.s, the founders and the funders — will be more likely to work with UNC again than if they had negotiated an individualized license. Westphal quotes Lita Nelsen, director of the Technology Transfer Office at MIT as saying the University license “is not the hard part of the problem,” but the UNC model sounds vastly less painful than every tech transfer story I’ve heard or been involved in.

Bottom line: a better tech transfer experience = an easier start-up = more companies = more sponsored research = more tech transfer wins. Here’s hoping that UNC’s Express License goes forth and multiplies.

Twitter connection: hat tip to @ldtimmerman and @Michael_Gilman for links to the Xconomy story. Follow Sylvia Pagán Westphal on Twitter at @sylviawestphal or as part of my Twitter list of Biotech Pharma and Health personalities.

Gairdner Breakfast: Nobel and Gairdner Winners Discuss Biotech and Pharma’s Pipeline Problems

As part of the  Gairdner Foundation’s 50th anniversary celebrations this week, there was a breakfast panel this morning with a lot of brainpower (even for MaRS). Cal Stiller lead a discussion by David Baltimore, Phillip Sharp and Corey Goodman who between them have three Gairdner awards and two Nobel prizes.

These top-notch scientists also have truly impressive corporate expertise: Board members of Amgen, Biogen and Limerick BioPharma. They turned their attention to “unclogging the pipeline.”

David Baltimore discussed reasons we’ve seen fewer approvals:

  1. Higher regulatory safety barrier.
  2. Low-hanging fruit is gone. A lot of targets are for diseases that are not fatal in the short term, which (see #1) creates a high safety barrier. Also, he says the molecular targets are harder.

Baltimore also identified potential areas of success: a subject area (immunotherapy) and a structural area (UCLA medical center’s translational research institute).

Phillip Sharp talked about the changing structure of early stage and translational funding.

  • VC is re-thinking their model, but pharmas are reaching out earlier in the pipeline with incubators and academic outreach; and there is more public funding available to move products further along the pipeline.
  • Trends he identifies: personalized medicine (patient-driven with $1000 genome); and a huge role for engineers and incremental improvements.

Corey Goodman starts with some stats:

  • current success rate is closer to 1 in 25, not the 1 in 10 number still cited from the 1990′s
  • cost of a new drug (R&D dollars divided by successful approvals) around $3 billion.

Nevertheless, Goodman sees upside due to huge unmet medical needs, deficient pipelines and vast academic output.

Panel discussion:

Will healthcare reform plans interfere with the United States’ (hidden) subsidization of global drug development through high prices?

  • Baltimore points to $80 billion pharma deal that avoided price controls, but says prices are unsustainable.
  • Sharp agrees that costs can’t be a bigger part of GDP, but it’s a big bucket even at current levels and there is room for efficiencies that don’t impact reimbursement.
  • Goodman says importation can’t be prevented long-term based on a safety argument, so we’ll have to deal with pricing more globally [regardless of U.S. health reform efforts].

Aren’t early-stage acquisitions still (and permanently) the outliers?

  • Baltimore thinks there will be a number of early-stage transformative technolgies that yeild early successes, but VC and other early funders need to be more stringent and keep an eye on the long term potential of even very early stage products.
  • Sharp thinks that academia is not well-suited to disciplined discovery, and if the policy goal is to develop more products, we’ll need structural changes in academia.

The panel wrapped up on an optimistic note.  Not surprising — how can you not feel good in Gairdner season? Speaking of Gairdner season, don’t forget to check out this year’s winners.

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Post-Vacation Brain Dump: Canadian Developments

Here’s a bit of Canadiana to start off the catching up:

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BIO 2009: Monday Technology Transfer Breakfast

BIO 2009I was at breakfast yesterday morning with university and company members of the BIO Technology Transfer Committee.  Some interesting tidbits, colo(u)red by my preception and commentary and not to be attributed to any other attendees:

P.S. First time here at the Cross-Border Biotech Blog? Welcome! Check out who we are, check out our Trends in 2009 series, or hit the search and navigation tools on your right and see if you see anything interesting.

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