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VOL. 8 | NO. 38 | Saturday, September 12, 2015

From University Labs to the Marketplace

Vanderbilt, University of Tennessee med schools produce more than doctors

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The health care industry contributed $38.8 billion to Middle Tennessee’s economy in 2014, according to a study released by the Nashville Health Care Council, which is a 32.9 percent increase from the 2010.

Some of that money is coming from technology that got its start in university labs.

“One of the focuses of our offices here is to get university research out there for the greater good,” says Dr. Patrick Reynolds, licensing associate for the University of Tennessee Research Foundation. “There is a lot of drugs, medical devices and other technology that have had their start at university labs.”

Getting that university research to market takes knowledge of the law, serious collaboration among inventors, non-university business partners and the school, and most importantly, an individual researcher or team with a passion for the problem they are trying to solve.

Jonathan Wall, Ph.D., professor of medicine at the University of Tennessee Graduate School of Medicine, explores diagnostic and therapeutic agents for amyloid diseases.

(The Ledger/Chase Malone)

At Vanderbilt University and at UT, making the leap from idea to lab experiment to marketable, patented product or device is built in to the process.

Chris Harris, director of licensing for the Center for Technology, Transfer and Commercialization at Vanderbilt, says his office is the first stop for those who create new inventions as part of their medical or other research to see if they can protect the intellectual property behind it in order to be able to commercialize it.

“A lot of it is getting to know the lay of the land of what research is happening in the UT system, finding out if there are ways to protect intellectual property around that, because especially in the cases of pharmaceuticals and medical devices … those things cost a whole lot of money to bring to market,” Reynolds says.

And, he adds, for a private business to get involved and to justify the kind of money they would need to spend in partnership with a university, the company needs “some form of protection that will keep others from doing the exact same thing.”

Lab to market takes time

Stacey Patterson, associate vice president in the Office of the Vice President for Research at UT and vice president of the UT Research Foundation, says the process to patent is difficult on the university level because much of what they have is very early stage ideas and concepts.

“We don’t have commercial-ready products, so it takes a partner who is interested in co-developing it and finding that partner … I like to say we have a lot of solutions looking for problems,” she says.

“And that is really a market push rather than a market pull, so anytime you are pushing something, it is a little more difficult than if there is a natural pull.”

There is a wide variety of timeframes that it takes to commercialize intellectual property coming out of any school or research institution – it just depends on what that intellectual property is and who the funding partner is.

“To get it into a form so that it can be used as a product and a service can be anywhere from a couple of years to a couple of decades,” Patterson says.

Jonathan Wall, the director of amyloidosis and cancer theranostics program, and director of the preclinical and diagnostic molecular imaging laboratory at the University of Tennessee Graduate School of Medicine, knows this only too well.

“We did an antibody molecule that the National Cancer Institute helped us develop,” he says. “It was designed to be a therapy for these patients, but we also used it as an imaging agent. The whole process from the initial IP [intellectual property] filing and getting it into man [patients] at UT took 18 years.”

Now that he knows what the hurdles are getting the tech to real-life application, he does his best to avoid them.

“I learned a lot of lessons along the way – what takes the time, where the money is, where the huge investment comes, so now whenever we define a problem in these patients, we not only think about how to solve the problem, but what is the best way we can solve the problem so we can make it happen in just five years,” he says.

“So now we work on synthetic molecules that are easy to produce, they are cheaper and we are thinking we can start a clinical trial maybe next summer, which would only be a five-year span from when we first came up with the idea.”

Wall works hand-in-hand with Reynolds and Patterson to make sure they don’t derail any hard work in the lab by forgetting to file something or if they are working out of compliance with the law.

“If we invent anything while through the course of being at UT, we are obliged to disclose it to the UTRF, and they go through the process of whether it is worth patenting,” Wall says. “The whole landscape has changed over the last 40 years, so IP and patent and material transfer agreements and scientists’ understanding the value of what they do in the lab and how it can relate to the future, has changed dramatically in the last 10-15 years.”

The Bayh-Dole Act

Much of that change has to do with the Bayh-Dole Act from 1980, also known as the Patent and Trademark Law Amendments Act, which was sponsored by Sens. Bob Dole (R-Kansas) and Birch Bayh (D-Indiana), helped get government-funded research and patents off the shelves and into the marketplace.

“The act gave universities the right to own inventions and intellectual property that came out of the research of federally-funded projects,” Patterson says. “And it not only gives them the right to own it, it asks them to commit to protecting that intellectual property and trying to commercialize it. And that was really the start of the expansion of technology transfer at intellectual institutions across the country.”

Prior to Bayh-Dole, the government had accrued nearly 30,000 patents, but only commercially licensed five percent of them. That doesn’t work when a patent being pursued could save lives.

“Prior to 1980 if you had an NIH grant to develop something, the government owned that IP and they might file a patent on it and it would sit in their stack of patents and nothing would typically happen and it would gather dust,” says Vanderbilt’s Harris. “It wasn’t fostering commercialization and stimulating new technologies.”

“Now, if Vanderbilt gets a federal grant to do research and an invention is created, then not only will they benefit, but Vanderbilt will, too,” Harris adds. “Vanderbilt in return has to grant the government rights to use it, and Vanderbilt will report back to the government every so often about revenue received, but that is the tradeoff the government gave so the universities doing the research have a vested interest in trying to commercialize the rights.”

Harris says it is hard to pinpoint how much the university makes every year from revenues just on medical research, but entire revenues on all technology is around $9 million annually.

“A couple of years ago we had a really good year where we did some major deals and brought in $23-24 million,” he says. “That was a very nice year.”

Patterson says UT patents run the gamut from agriculture to engineering, in addition to human medicine. New to market this year is a mannequin developed out of the veterinary school for teaching animal endoscopy to students.

“Traditionally they have used cadaver dogs, so the vet was very passionate that she did not want these dogs to be killed for this purpose,” she says. “So she developed this mannequin and we licensed it to a company and now they are selling it to vet schools.”

Will it sell?

So, is the research patentable and marketable?

Susan Eagle and Franz Baudenbacher’s portable, wireless ECG machine was a no-brainer, but they aren’t all like that. Also, not all intellectual property needs to be patentable, with some things covered by copyright.

And while it’s a bummer, some research already has a patent on it.

“We will do a search to look and see what references are out there,” Harris says. “Maybe someone has already invented it, but our researcher doesn’t realize it, or there are a whole lot of patents in this area already. Let’s say Medtronic (a medical device company) has all these patents locked up, and our invention is a slight improvement on that, that will tell us that Medtronic is the only person who could commercialize it, so that would limit our ability to commercialize.”

Some research just doesn’t have enough interest to justify the cost of pursuing a patent.

“Are there more than three people who care? Will it generate revenues in excess of what it would cost to get a patent?” Harris asks. “Is there a need for this kind of technology in the marketplace? That doesn’t mean it wouldn’t be eligible for a patent or isn’t good science, it just means it might not be a good business investment on our part to go after patent rights if we don’t think we will be able to commercialize them, recoup those costs and generate other benefits for Vanderbilt.”

Diseases jockey for attention

That’s one reason it can be especially difficult to further research for extremely rare diseases. Isabelle Lousada, director of the Amyloidosis Foundation, says there are 7,000 rare diseases affecting 50 million Americans, and their research foundations are all jockeying for funding.

“The diseases people know about aren’t by the numbers who have them, it is by the ice bucket challenge or celebrities who have a disease, which makes a huge impact, not just on general awareness but also on funding research and really, developing therapies,” she says.

Lousada works with scientists such as UT’s Wall in connecting patients in need of clinical trials or helping him with funding if he were to apply for a research grant or junior fellow – anything to further research that could eventually help patients.

“We work on a rare disease called amyloidosis, and one of the things we do is come up with new inventions and file patents for intellectual property,” Wall says. “We come up with ways to better diagnose patients, and so we come up with a lot of imaging agents, and we also develop a lot of therapeutics, and those have been patented.”

Wall is careful to work hand-in-hand with Reynolds to make sure all of their hard work has its best chance of being licensed for the marketplace. If a paper is written promoting the work before a provisional patent has been filed, the intellectual rights can be in jeopardy.

“The last thing we want to do is get in the way of faculty publishing research and speaking on it, because that is the heart of what they are supposed to be doing,” Reynolds says. “If a faculty member lets us know something while they are in the process of writing their manuscript they are going to publish, we can file a patent application before they publish that paper that allows for much more protection.”

Students, partnerships pay off

It’s not just the research that is getting to market, but the students who work on it too, resulting in a win-win-win for the school, students and the businesses who hire them right out of the lab.

“I look at research and education as one in the same, especially at the graduate and professional level,” Patterson says. “In science and engineering fields, the research is your education, and the students get introduced to the companies.”

Patterson says the school recently completed a license with a company that hired the Ph.D. student to work with them.

“It makes a nice partnership with the university that will continue because that student’s mentor is here as a faculty member and the technology came from here, so it really creates a relationship with that company,” she says. “We want as many of those as we can get.”

In fact, it is something they promote as an incentive when looking to license technology and research coming out of the school.

“If a company comes in and wants to license the patent rights, it is always nice for us because we encourage these companies to do some of the research and development here with the hopes that company will form a long-term lasting relationship with the university, and then what might be a one-off kind of license could turn into a decades-long research partnership that is really important for the faculty member, and even maybe more importantly, for the students who are working in that space.”

Sometimes, a private business gets interested in the research, weighs what it takes to actually fund a prototype and get the ball rolling.

“We have a company in the West Coast interested in amyloidosis,” Wall says. “They are a small company, but they have similar goals to us, so they have invested maybe $1 million over the last eight years in working with us, and at least two patents have come out of that collaboration. So when pharma realizes your lab is engaged in research that is going to end up as intellectual property in something they can develop, they will invest in you.”

The more buzz about a lab, the better it means for the likelihood patients can get the medicine being developed through outside investment.

“If your lab has a history of developing real world agents, then industry gets wind about that through meetings and publications, and then they get involved with what you are doing,” Wall says.

Inventors profit

Inventors listed on a patent always get a cut of the profits, another outcome of the Bayh-Dole Act.

“If a technology gets to market, the inventors share the first $5,000 of gross,” Patterson says of UT’s policy. “The UTRF, because we pay for all the patenting protection, we recoup those patent fees. After that, the easiest way to say it is that the inventors get 40 percent of the net, and UTRF keeps 30 percent, then the campus gets 30 percent, and most of the time the campus funds go back to support additional research. And we hope to grow that over time.”

Vanderbilt also has a policy in place that its gives inventors half of the first $100,000 a year that comes in as personal income.

“After that it drops down to 40 percent and that is still generous by national standards,” Harris says. “It is not the most generous policy I have ever seen, but it is certainly in the top 10 percent of policies I have seen. Most universities have anywhere from a quarter to 40 percent of revenue gone back to inventors, and all of them are really complicated with many tiers.”

They can even spin off their own startup, like Eagle’s InvisionHeart and even Patterson, who launched 490 BioTech in Knoxville based off of bioluminescent technology that came from her dissertation work at UT. In fact, it’s what got her passionate about helping others get their work to marketplace and typically UT will have three or four companies launch each year statewide based on tech coming from the school.

“We promote entrepreneurship and startup companies and licensing technology into those startup companies because we feel part of the mission of the university is economic development,” Patterson says.

“I didn’t want to just publish a paper, I wanted to see it put to work and have an impact on the world. And I got lucky that I was able to do that at the university I love, UT.”

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