Turning R&D into gold

The University of Massachusetts Medical School earns millions of dollars a year licensing its discoveries. Pairing its cutting-edge research with the business savvy of outsiders, the school is helping fuel an innovation industry that yields millions in research money, hefty profits for licensees and, some hope, the prospect of creating new companies in Central Mass.

That figure ranks UMMS as one of the top 12 earners in North America in terms of licensing revenue, according to a recent study by Association of University Technology Managers, an Illinois group that tracks tech transfer in the higher education area.

It’s been a rapid growth. Ten years ago, before a statewide effort to cash in on its research, the University of Massachusetts realized only $195,000 in licensing revenue. But that was before several discoveries led to successful new treatments based on UMMS research were found.

About $19 million of that revenue comes from royalties from the sale of Synagis, a vaccine for the childhood illness Respiratory Syncytial Virus, sold worldwide by the MD-based MedImmune Inc. Sales of that drug reached $1.1 billion last year, according to the company’s most recent annual report.

Another moneymaker for the UMMS comes from sales of Clarinex, an improved version of the antihistamine Claritin developed by researchers there. The drug is licensed to Sepracor in Marlboro and sold worldwide by NJ-based Schering-Plough Corporation. UMMS earned $1 million in royalties from the drug last year

There are also significant potential royalties downstream from the development of RNA interference technology discovered at UMMS. That technology, which blocks the formation of malfunctioning proteins, is thought to have significant potential in the treatment of Type II Diabetes and ALS (Lou Gehrig’s Disease.) Several companies, including CytRx and Sirna, both of California, have agreements in place to develop the technology, although a royalties-producing product is probably several years away.

UMMS researchers generate roughly 125 invention disclosures (formal notifications to the university of a possible new discovery) every year, or an average of one new discovery about every three days, McNamara says. Although not all of those discoveries are marketable, the school does file for upwards of 30 patents a year, he says.

And although it hasn’t happened yet, optimists hope discoveries by the school could lead to spin-off companies created by researchers or local investors. Although the trend hasn’t touched the Worcester area yet, tech transfer programs created 462 spin-off companies last year nationwide, according to the AUTM.

That prospect of tech transfer yielding economic development led Mass. lawmakers to create a statewide office for marketing tech transfer opportunities as part of the state’s 2003 economic stimulus package. That office, the Massachusetts Technology Transfer Center, showcases the developments by any Mass. research institution to pools of investors and research capitalists at periodic conferences.

The MTTC has been up and running for only 18 months - not enough time to gauge the effect of its efforts in aiding startups, which can take several years to get off the ground, says its director Abigail A. Barrow. The measure she uses are the number of investors in the audiences of her conferences, which she says has grown from 20 to more than 30 in the four conferences the center put on last year.

Barrow has two roles in the process of helping startups, she says. One is a catalyst in helping to connect entrepreneurs and inventors with investors. The other is trying to ensure that when a company does start, it’s located in Massachusetts. "When (a researcher) has a technology and is looking to license it to a company, the goal is to find a Mass. company that would benefit from it before we go outside of the state and find either investors or other companies to fund it."

Smaller schools with less established tech transfer programs benefit from showcasing their work alongside that of larger schools like MIT, which has a tradition of creating viable spin-off companies and attracting investors.

Whether it’s yielded any spin-offs yet, companies are paying attention to research being done at UMMS, says Bruce M. Pratt, vice president of science development for Cambridge-based Genzyme Corp. The company constantly monitors research efforts at the campus that may have development possibilities, keeping track of them in its "database of opportunities," he says.

In the last year alone, Genzyme has examined 11 technologies from UMMS, Pratt says. That’s not to mention the five separate working agreements Genzyme has with UMMS for a variety of research, evaluations and one clinical trial, he says.

Still, the possibility of profits does not alter goal of the school or the work being done there, McNamara says. And no one is talking about turning universities into corporate research centers - just finding ways to capitalize on research that has potential.

"The fundamental mission is to get technology out to the public for the public’s good," he says. "But certainly if we are able to start a company or help with economic development; that’s part of our mission as well. But it’s not about making money; it’s about getting things out to the public."

Kenneth J. St. Onge can be reached at kstonge@wbjournal.com

SIDEBAR: A Clark tech transfer success story

A professor’s frustration with the expense of software led to one of the more unusual examples of tech transfer success at Clark University.

In 1987, Clark Geographer Ron Eastman was frustrated with the lack of inexpensive GIS (geographic imaging systems) software he needed for his research. Rather than continue shopping around for software, he made his own, dubbing it IDRISI, after a 12th century N. African cartographer.

Clark took Eastman and IDRISI under its wing, incorporating his software project as the Clark Labs.

Nearly 20 years later, IDRISI boasts 50,000 users worldwide, with a 15 percent annual sales growth that is used to fund the labs in their entirety, says James Toledano, executive director of the Clark Labs.

"Being a nonprofit, one of our mandates is to develop accessible technology that is easy to use but also very affordable," he says. "Being a non-profit allows us to develop a technology that meets those criteria by keeping the price low."

How low? IDRISI sells for $995 to the general public and there are substantial discounts for students and researchers. Comparable products from other companies can cost $15,000 to $20,000

"But again, it’s part of our mission to provide this," Toledano says. "I think it’s a tech transfer success story." K.J.S.

SIDEBAR: Entrepreneurs: The missing piece

While UMMS may be Worcester’s tech transfer big kid on the block, Worcester Polytechnic Institute has also stepped up its efforts to push it’s technology into the marketplace.

The tough part? Finding the right people who can help them do that says Michael B. Manning, director of technology transfer at the school.

"The entrepreneur is the empty seat at the table," he says. "In some sense, we are like venture capitalists in that we make a lot of early-stage decisions and very significant investments. So then we ask: does it make sense to commercialize the technology? And that’s where entrepreneurs and outside firms can come in. They have the know-how in some aspects that we don’t."

WPI earns several thousand of dollars each year from the licensing half of its tech transfer operations that includes 27 active patents and 20 pending applications for more.

But the more lucrative possibility lies in bringing some of the school military-sponsored developments to the mass market, says W. Grant McGimpsey, head of the school’s Bioengineering Institute.

"The military is looking to buy things off the shelf and to do that, they need a civilian manufacturer," he says. "The Army is interested in tech transfer because it can make things more accessible for them."

Among those technologies: a wireless, wearable ultrasound device that the Army wants for instantaneous evaluations of its soldiers in the field. But the device also has possibilities for rural health and trauma situations, he says. The trick for McGimpsey and Manning is to fill the empty seat with someone who knows how to do it.

"There really is a mismatch between the people who fund us and the market," he says. "The Army wants a specific solution but they don’t want to manufacture it - they want to buy it off the shelf. But we’re not in the business of identifying investors and people who can take these products to the next stage. That’s what the entrepreneur brings to us."

"We want to make sure we don’t have a filing cabinet with patents in it," he says. "We just need somebody to help us put it into the right hands." K.J.S.