February 1, 2008

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Go for a Spin

Professors Become Entrepreneurs on Road to Commercialize Research

Heather Stewart

February 1, 2008


It all starts with a question: Can we build a vehicle that is more fuel efficient? Can we make soap stronger, yet gentler on the skin? Can we cure cancer? Researchers at universities tackle thousands of such questions every day. From agriculture to aeronautics, research impacts our lives in untold ways. But how do such innovations make it from the laboratory to our cupboard – or to our doctor’s office? A Gleam in the Researcher’s Eye The answer, of course, lies with entrepreneurs: professors who brave the corporate world to launch startups, investors who take a risk with a new product and executives who step in to lend their business know-how. “The motivation to start a company only exists in a small amount of faculty,” explains Mike Alder, director of Technology Transfer at Brigham Young University. The technology transfer offices at Utah’s research universities help professors through the process of patenting their work, and then make the patented research available for licensing to companies – or back to the original professor. The more typical path, says Alder, is for a researcher or research team to patent a discovery and then walk away as the university licenses the technology to outside investors. “Our office goes out to license the technology to the licensee who can bring the best return for BYU.” However, some professors stumble upon discoveries that have the potential to be very financially rewarding – and they uncover a previously unknown entrepreneurial passion. Such was the case with Marc Hansen, a BYU professor who has spent more than a decade researching how cancer cells become invasive and spread throughout the body. “Most of the work I do is designed to be published for other scientists to read,” he says. But after spending only four or five months on an advanced method for screening the effectiveness of potential cancer medications, Hansen knew he had something that needed to be developed and utilized in the marketplace. Unfamiliar with the world of business, Hansen turned to BYU’s Technology Transfer office for advice and help patenting the research. “You need to have something you can defend in terms of ownership. You need a patent, even if it is provisional.” In addition to helping with the patent and licensing process, the Technology Transfer office helped Hansen network with entrepreneurs and business experts when he decided to start a company. “My biggest challenge has been my lack of resources and experience on the business side,” he says. To overcome this difficulty, Hansen recently partnered with a businessman, Jeff Chance, to launch Frost Biologics based on his cancer medication screening technology. The brand new company faces an uphill climb in becoming established. “It’s been a very steep learning curve. You have to value other people’s advice and experience,” he says. “My best advice to other scientists is don’t discount the importance of business structure and business acumen.” Tech Transfer director Alder agrees. “Scientists choose to go into their field because they love it, and they really need to have business advice.” Hansen also has some suggestions for corporations and entrepreneurs who want to build companies on technology innovations. “Business people should hire more experts in their field as consultants. This would help build links between the academic and business worlds and keep companies on the cutting edge of innovation.” Show and Tell Researchers who ultimately want to commercialize their work need to be aware of what investors are looking for, says Alder. Investors seek out university technology that is as developed as possible, that is protected by patents and that is breakthrough or enabling. Robert Vashisth, co-founder and chief technology officer of InteliSum, explains that investors pay attention to the latest research by reading published papers, following the industry and academic magazines, and staying in close contact with technology transfer offices. In fact, InteliSum licenses one of its key patents from Utah State University. The company, founded in 2001, has created camera technology that brings together three separate data elements: LIDAR XYZ coordinates, digital image data and geophysical position (GPS) information. The end result is what the company calls a “Life Dimensional” image that is particularly useful in the architecture, engineering and construction markets. Vashisth also believes the technology will become standard for 3-D media communications. InteliSum’s camera technology is based on two patents. The patent licensed from USU encompasses combining the LIDAR and digital image information. The camera is being used, among other things, to help the Utah Department of Transportation replace a 3-million-pound bridge in one weekend. The company also performed a 360 degree scan of Rice Eccles Stadium, a scan that was used to create an interactive model of the stadium. U of U sports fans were able to manipulate the model to find the ideal perspective for watching games. “The USU technology is very important to us as it gives our company a cutting edge in the industry,” Vashisth says. “No one else can do what we do right now.” For professors who want to see their research commercialized, Vashisth recommends getting the word out as much as possible about the research and its potential. Don’t be shy about alerting the media about your discoveries, says Vashisth, and work with the tech transfer office. “Researchers can even invite people from the industry for a ‘show and tell’ of their technology.” Investors and companies may decide to get involved with research at early stages, working directly with the professor to steer the development of the technology and make it more usable. “The technology InteliSum is based on is a good example of that,” Vashisth says. He worked with the research team to retool the camera display, making it fit the requirements of the industry. “Professors are tied to their research like [it’s their] baby. They are happy to see their research succeed in the market,” and are therefore willing to work closely with potential investors, he says. “We expect the universities to develop the technology to be ‘good enough,’ but that is not good enough for us. We have to take it the other half of the way,” Vashisth says. As an investor and businessman, Vashisth believes the private sector can do more to promote university research and commercialization. “The corporate world has to invest a little more in our universities, not only for our own benefit, but for the growth of our local universities,” he says. “Information coming out of the universities helps us create new jobs and expand the economy.” Growth Through Innovation Companies like InteliSum and Frost Biologics are just two examples of a phenomenon the state of Utah is trying to foster. The concept is simple: cutting-edge university research is spun off into high-tech companies that pay high wages and strengthen the economy; meanwhile, the burgeoning tech industry attracts new researchers and companies to the state, and the cycle continues. This is the philosophy behind the Utah Science Technology and Research (USTAR) initiative, which, two years ago, received a cash infusion of $176 million from the Utah State Legislature. The big dollars are being used by the University of Utah and Utah State University to build state-of-the-art facilities and entice renowned researchers to the schools – effectively providing a shot in the arm to the state’s technology industry. “USTAR is about growth through innovation,” says Ted McAleer, executive director of the program. The two state research universities are in the process of recruiting what McAleer calls “all-star” researchers – the top scientists in their field. USU and the U of U are focusing on 11 specific innovation areas that are based on the schools’ existing strengths and the state’s industry strengths, and which have great potential for commercialization. “So far we’ve hired 14 ‘all-star’ faculty members in eight of the focus areas,” says McAleer. But it is not solely skill and experience the researchers bring with them: they also bring millions in grants and other funding for their work. According to McAleer, one new recruit will be bringing more than $80 million in funding for his research. Although this focus on research commercialization may be new, Utah universities boast a long tradition of generating spin-off companies. Research Park at the U of U and Innovation Campus at USU are filled with research-based companies, including Evans & Sutherland, Space Dynamics Laboratory, Caisson Laboratories, ARUP and many, many others. “The University of Utah is one of the top 18 schools in the country in terms of commercialization,” says McAleer. Utah State University is renowned for its work in agriculture and space sciences. And to the south, Brigham Young University has its own areas of research expertise, from computing to genetics. “I hope the word gets out, particularly in Utah, that the business world can benefit from a partnership with the academic world,” he says. A Commercial Bend Myriad Genetics is a premier example of a successful company based on technology developed at a university. The company, built on groundbreaking genetic discoveries at the University of Utah, offers genetic screenings for two genes known to be predictive of breast cancer: BRAC1 and BRAC2. Myriad has also delved into pharmaceutical research and is in stage 3 clinical trials for a drug that shows great promise in fighting Alzheimer’s disease. In many ways, Myriad Genetics is the dream of USTAR: a company that employs hundreds in high-paying tech jobs that continues to focus on cutting-edge research. The company was founded in 1991 after Mark Skolnick and his U of U colleagues were able to map the gene BRAC1 to its specific chromosome. This was just the first step to pinpointing the exact location of the gene, but Skolnick knew the end result of the research would be an effective medical predictive test for breast and ovarian cancers. “I felt that by staying in the university, I would not have the resources to clone the gene (BRAC1),” he explains. Instead, Skolnick, who is now the chief scientific officer of Myriad Genetics, turned to the private sector to raise money and launch a new company. “The first major hurdle anyone deals with in starting a company is finding money,” he says. “The next is finding the right people.” A long-time researcher, the business world was not exactly new to Skolnick either. “I had a commercial bent from the get-go,” he says. Skolnick had previously spun off a software company based on the database he developed to encompass several generations worth of genealogical data. (That project, begun in 1974, was the initial phase of his search for genetic predictors of cancer.) Housed at U of U’s Research Park, Myriad Genetics taps into the university’s pool of science students to fill technician positions; the company recruits Ph.D.-level positions from all around the globe – bringing a fresh batch of talent to the state. “We have a tremendous group of people doing exciting work here,” Skolnick says. Exciting work indeed: the company is nearing the end of two phase 3 trials for a therapeutic medication called Flurizan, which has so far shown success in treating what seems to be the root cause of Alzheimer’s disease. Myriad Genetics is also developing novel medications to fight cancer and AIDS, as well as other viral diseases. With the promise of USTAR and the new entrepreneurial zeal of researchers, Utah can expect to see many more successes like Myriad Genetics. “The academic world is extraordinarily more commercial than it was when I started,” says Skolnick. “No one patented anything in the 1970s and 80s.” Technology Transfer offices at the universities in recent years have also become much more active in the patenting and licensing process. “These technology offices are really great because they’re a great place for entrepreneurs to go and find out what’s going on and to cherry-pick the best new innovations,” says Hansen. USTAR’s McAleer predicts a surge of university-led innovation in the near future. “One of the reasons innovation works so well in an academic setting is because researchers come together from across disciplines to share ideas and collaborate.” And when the business world taps into this well of innovation, it can only benefit us all.
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