Medical Device Link.

Originally Published MX March/April 2006

BUSINESS PLANNING & TECHNOLOGY DEVELOPMENT

Medtech companies can find valuable partners in universities that have recognized the value of commercialization.

Lori Luechtefeld

Innovation and technology development, particularly in the medical world, are inherent in university systems, where faculty and students are continually testing new theories and protocols. Both established and start-up medical device companies can gain valuable access to cutting-edge technologies by partnering with educational institutions on commercialization activities. However, doing so often requires company executives to recognize and respect the differences between industry and academia, and put special effort into bridging this sometimes-expansive gap.

Not all universities have recognized the commercial opportunities that come along with their extensive research efforts into medical technologies. And even if an institution has recognized the opportunity, it might not have the infrastructure in place yet to gracefully transition between the academic and business worlds. However, as more and more universities recognize the need to capitalize on advances made in their laboratories and classrooms, technology-transfer offices, research parks, and business incubators are springing up across the country, creating myriad new opportunities for life sciences companies.

David J. Fink, PhD, biotech entrepreneur in residence at tech-center@UMBC, the technology incubator of University of Maryland, Baltimore County (UMBC), advises incubator companies and helps identify faculty members interested in licensing technologies.

Medtech companies should be aware of technology-transfer opportunities both at universities in their own backyard and at those clear across the country. "It doesn't always happen that the opportunities are nearby," says David J. Fink, PhD, biotech entrepreneur in residence at techcenter@UMBC, the technology incubator of University of Maryland, Baltimore County (UMBC). "Companies have to be flexible enough to go where the technology is."

Culture of Innovation

The research culture of many universities can be a double-edged sword. Faculty members and students developing new technologies are rarely focused on commercializing their innovations, which can make it difficult for interested industry parties to quickly license these inventions into their own portfolios. However, this same academically driven mind-set is what often sets universities apart from other research institutions.

Drohan

"A university, if it is operating at its full potential, is an assemblage or forum for ideas that test conventional wisdom," says William M. Drohan, executive director of the Association of University Research Parks (AURP; Reston, VA). Among AURP's membership of research parks around the world, medical and biotechnology is the dominant technological focus.

Fink says that technologies coming out of universities take the shape of both incremental and radical developments. While the former can be strong candidates for licensing to larger corporations, the latter are what often drives start-up medical device companies.

Dilks

Likewise, there can be a significant difference in the approaches to commercialization taken by universities of varying stature, according to Charles Dilks, president of Dilks Consulting and adviser to The Science Center (Philadelphia), a research park that counts more than 30 universities as its stakeholders. "In some cases, the most prestigious universities can be the least entrepreneurial because they are so well funded," he says. "It's not always the case, but sometimes second-tier institutions are more aggressive." Dilks says universities such as MIT and Harvard, rather than focusing on incubator and research park models, often choose to triage their research developments to identify those that will survive and become commercially viable without additional support.

Most universities looking to move their technologies into the market will employ multiple means to this end, including outright licensing to existing companies, bringing start-up companies into their incubators, or even spinning out companies in partnership with faculty members.

D'Agostino

Charles D'Agostino, executive director of the Louisiana Business and Technology Center at Louisiana State University (Baton Rouge, LA), says the Louisiana Technology Transfer Office recently underwent a major reorganization designed to encourage faculty disclosures and commercialization. "The office has become more interested in licensing to small and local businesses, and it has become very interested in faculty members who wish to spin out companies and license technology," D'Agostino says. "However, the reality is that many medical technologies require a large capital investment to get them to the marketplace, and the office knows that licensing to large national and international companies may be more realistic for some technologies."

Making Connections

For a device company looking to make inroads into a university's network of medical technology research, finding an appropriate starting point might seem challenging. Although the university's technology-transfer office seems a logical starting point, Dilks points out that, depending on the size and sophistication of a university's office, direct access might be limited. "It's sometimes hard to get to the technology-transfer officer, but companies can work through their intermediaries at research parks and incubators," he says.

Auvil

Dilks also recommends that executives consider participating in events organized by these entities. For example, The Science Center regularly hosts a biomedical research lecture series called "Lunch for Hungry Minds," which brings together life sciences entrepreneurs and scientists from area research centers.

Productive interaction with a university's technology-transfer office often requires a medtech company to do more than simply knock on the door and inquire what technologies are on the office's shelves, according to Stephen Auvil, director of the Office of Technology Development at UMBC. Many relationships are established through direct contact with a university's faculty members who are working in specific areas.

Bowman

Monitoring certain academic journals can also help medtech executives track research efforts at universities; however, Auvil notes that there are too many journals in too many disciplines for a company to stay on top of all the developments in the technological fields of interest. J. Michael Bowman, chairman and president of the Delaware Technology Park (Newark, DE), agrees that companies should do their homework before approaching universities. "The best results I've seen have come from due diligence on the company side," he says. "If you just walk in cold and say, 'What do you have that's new?' you won't get very far."

Lasting Partnerships

Licensing technology from a university is a process, not an event. And an essential part of this process, according to UMBC's Auvil, is collaboration between a company and the original inventor of the medical technology of interest. "The key is getting the inventor's cooperation," he says. "Most technologies are at very early stages at a university. If the inventor is not cooperative, a company might want to rethink working with them.

"University culture is such that some faculty are very interested in working with companies, and others are staunch academics who really shy away from interactions with industry," he adds. "Companies have to get a sense of which camp an inventor falls in."

Batalia

Michael Batalia, PhD, director of the Office of Technology Asset Management at Wake Forest University Health Sciences (Winston-Salem, NC), agrees. "It always comes down to people," he says. "Most of what is disclosed to the technology-transfer office is bleeding-edge stuff that generally isn't ready for prime time. Hence, your faculty champion needs to be a team player who can work with you through multiple design cycles. In addition, medical technology needs to be adopted by the larger medical community. This only occurs when you have changed the behavior of many stakeholders, and even in the best-case scenario, this takes time. You need the support of your faculty and physician colleagues in the whole commercialization effort."

Simon

William B. Simon, vice president and chief operating officer of the Center for Emerging Technologies (St. Louis), recommends that medtech executives ask several questions when evaluating the opportunities for technology transfer at a particular university. "Is there freedom to operate? Is the university intellectual property (IP) some sort of foundation for further work? Are there any conflicts? And most importantly, how much access to the inventors will you have? If this is little, then drop it," he says.

D'Agostino says companies should be willing to invest in their relationships with universities. "The company must do its market assessment, as the universities are more focused on the science," he says. "In addition, the company should be willing to fund further research at the university to get the technology developed more quickly. Also, university IP offices are looking for funding for patents and operations, so the company should be prepared to pay some upfront cost."

Often companies and universities decide to establish ongoing relationships in the form of sponsored research agreements. Fink at techcenter@UMBC says this can be a university researcher's greatest incentive for commercialization because it provides funding for further development of laboratory space.

"Relationships drive many agreements," agrees Scott R. Carter, PhD, assistant director of the technology transfer office at the California Institute of Technology (Pasadena, CA). "A good way to build a relationship with a university is to identify key researchers and to sponsor work in the laboratories. Such agreements benefit the researcher and give the sponsor visibility into the work being performed."

In addition, Delaware Technology Park's Bowman says an ongoing research relationship helps ensure that a company is serious about developing a university's technology. "Universities want companies to use their patents, not just buy them to block another company," he says. For this reason, he says, universities place an emphasis on maintaining control of their IP. "The private sector never seems to understand that the university owns that property. However, that is not a barrier to practical exclusivity for the company."

Moving In

While some university-industry collaborations are conducted at a distance, others represent a melding of both intellectual and physical property. Setting up operations in a university research park—the primary role of which is to promote the transfer of technology and business skills between the university and their business and industry tenants—can be an appealing option for certain companies.

"A university research park isn't for everybody, but it can be a great thing for the right company at the right time," AURP's Drohan says. "University research parks are not out there competing for a John Doe tenant. The key is leveraging the strengths of the university into the private sector. They're normally not looking to just lease office space. They want tenants that are unique and tied into the university in some fashion." For these reasons, individual research parks tend to focus on only a small handful of industries, which are often interrelated. Tenant companies might also be expected to employ university researchers or students as a part of their lease agreements.

"My role certainly has a real estate aspect to it, but mostly I spend my time counseling people," says Delaware Technology Park's Bowman. "Missionwise, we view ourselves as a halfway house between the academic world and the full business world." The Delaware Technology Park, about 50% of which is occupied by life sciences companies, is a collaboration among the state of Delaware, the University of Delaware, and the private sector.

Start-up companies might find a home in a university's business incubator, which sometimes occupies part of the larger research park. The Science Center's Dilks says an early-stage company might choose to start with a one-person or even part-time office in the incubator. "Such a location provides a prestigious address and a sense of credibility for a start-up company," he says. "As the company graduates up the food chain, it might move into the research park, where it maintains access to the university and research opportunities."

Discerning Factors

Medical device companies can learn which institutions are experienced and active in producing medical technology innovations through the specialization generally seen among research parks and, to some extent, university research efforts. But beyond that, medtech executives should also seek out university partners that are actively encouraging the movement of their research advancements into the private sector. "Companies should first consider whether a university values entrepreneurship along with the other cornerstones of its mission, which are typically based in excellence in teaching and research," says Michael J. Donovan, senior associate vice president at Boston University. Donovan has been closely involved in the development of BioSquare, a 14-acre research park adjacent to Boston University Medical Center. Indications that a university values entrepreneurship can be found not only in its investments into physical research facilities, but also in its reputation for technology commercialization and development.

A university's entrepreneurial spirit may also be evident in the incentives it provides to its faculty to commercialize discoveries and how actively it recruits individuals driven by such opportunities. "We have, in the last five years, been aggressively recruiting entrepreneurial faculty," says D'Agostino of the Louisiana Business and Technology Center. "We pay the faculty member 40% of royalty revenues from a patent and licensing agreement, and the university is working on incentive packages whereby entrepreneurial faculty can get tenure credit for patents, licensing agreements, and entrepreneurship."

Simon of the Center for Emerging Technologies says that, in general, the level of entrepreneurial spirit among university faculty members is increasing. "Many new faculty are actually shown our building before they are finally hired or offered a position because many want to have the chance to do something on the side," he says. "The incentives for the inventors sometimes include a share of the stock and the ability to work in the outside lab 20% of the time."

Ellen Hemmerly, executive director of the University of Maryland, Baltimore County (UMBC) Research Park Corp., manages the development of the 350,000-sq-ft research and technology park located on the main campus at UMBC.

In addition to working with faculty members who have proper incentives, companies might also find it easier to function in a university setting that takes an integrated approach to technology transfer. "At UMBC, we have recognized that we can do technology transfer better if we work together," says Ellen Hemmerly, executive director of the UMBC Research Park Corp. Not only does the university's incubator work in partnership with the technology-transfer office and other university programs, but it also looks to outside universities as a potential source of incubatable companies. "Our mission has evolved to looking at technology transfer from a regional and statewide standpoint." Also, as a means of assisting start-up companies, techcenter@UMBC developed an entrepreneur-in-residence program, in which experienced entrepreneurs advise incubator companies and help identify faculty members interested in licensing technologies.

AURP's Drohan agrees that universities are learning the benefits of integrating their commercialization efforts. "That's one strategy that is developing," he says. "We're really starting to see technology-transfer managers working hand in hand with research park managers."

Conclusion

Universities offer technology-transfer opportunities for medical device companies at all stages of their development. Each academia-industry partnership is both unique and dynamic, evolving over time as the company's needs change and the university's capabilities expand. With proper communication and understanding, medtech executives can forge lasting bonds with educational institutions that can serve the financial and academic interests of both parties.

Overall, when mining technology in a university setting, medtech executives should exercise patience. "Build your relationships slowly and carefully," advises Wake Forest's Batalia. "University communities are closely knit, so any false starts will linger and potentially cause problems. In addition, take the time to understand the university's legal positions. In my experience, many companies think that they can do a deal that resembles a business-to-business transaction. The reality is that universities have much stricter policies and guidelines, which can't be changed very quickly or easily."

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