Companies looking to license new technologies and academics seeking to commercialize their research have different goals and viewpoints. Getting them to reach an agreement can be complicated.

G&P Editors Sean Keating, Tanuja Koppal, and Bill Schu recently spoke with a panel of experts on technology transfer and how it has changed over the years. The panel included Erika Geimonen, PhD, assistant director of the technology transfer office at The State University of New York at Stony Brook; Richard Gill, PhD, president and CEO, Signet Laboratories Inc.; Marion Howard, MD/PhD, MBA, principal and founder, Cambridge BioStrategies LLC; and Laurie Tzodikov, principal, Tzodikov Associates/board member, Pennsylvania Biotech Association/co-chair for Innovation Corridor, academic-industry liaison committee member, BIO 2005. Here are some excerpts from that discussion.

Bill Schu: Erika, tell me about building relationships [with the licenser and licensee]. How do you go about doing that, and making sure you know all the people you need to know?

Erika Geimonen: I need to be fair by not only demanding what we want, but also understanding what the company's needs are. Before you go to talk to the companies, <

Erika Geimonen, PhD, State Univeristy of New York at Stony Brook

you have to talk to the scientists. Very often, they have very diverse packages. They bring me the research; they do not bring me an invention. So what will I sell? You try to create with the inventor or scientist something that can actually sell. If you know the rules, you know how to avoid the problems. You can bend some rules to make it flexible. Our mission is not to manufacture or sell technology. Our mission is to disseminate technologies.

Marion Howard: I would agree with that. I think the relationship between the person trying to license something and the person licensing something are key in success. Continuing to communicate what a specific company is looking for in terms of technologies is very critical.

Richard Gill: You need to package the technology. You can not sell patents. If you do, they are going to have very low value. Technology transfer is about proactiveness. I think the contact sport [analogy] is great because there are teams we will not play with, not because their technology's not good, but because we know that they do not have team spirit. We cannot afford the time to package it and find out whether it is real or not.

Everyone thinks their baby is the brightest one. We have to cut past that. Sometimes you have to be harsh and tell them that euthanasia is in order. There are technologies you need to nip in the bud, not because the technology is not good, but because commercially it may not happen. A good technology transfer office will step in and save the commercial end point a lot of time and effort. The reality is [because of this] we will pay more.

Sean Keating: Are there situations where someone comes to you with just a patent?

RG: Take the example of, 'we have an endometrial marker, are you interested?' That would have us hooked because it happens to be in a space we are interested in commercializing technology. If we then spend two months trying to understand the intellectual property position and trying to push the inventor back from a consulting contract, by the time you actually decide you want the technology, you do not want to pay much for it because you have already put in so much effort. We are all happy to pay dearly if the technology is properly packaged [, that is,] the patents are good, the inventor is rational, the technology transfer group wants to close a deal.

MH: You can have instances where you are just looking for pieces. Let's take an example of gene therapy: you license a cell line from one technology office, you license a vector from another one, and the geno vectors from yet a third one. You bring that together and it synergizes. For the institutions, it would be hard to put a full package together because they would not necessarily know how those pieces would fit together. But a company with a business model in mind would know and scout for someone who has the IP for what they need.

BS: Is there a bigger danger that things get lost because people are not going to find a way to commercialize them, or has it become a bigger danger that the volume is too heavy?

MH: I do not think too many things get lost because there are brokers inbetween people who are getting requests from companies to look out for technology, search patent databases, and eventually find people who may have something along those lines. Often scientists do not know that they have anything that could be of interest to anybody else, and they can work with the licensing offices to work it out. If there is a need for something, the people who need that technology will put a lot of effort in finding it.

Laurie Tzodikov: Even with that effort, there are a number of items lost that could be valuable. There is a spectrum of differences that you see across the country with technology transfer. To me, never having worked in a technology transfer office, it seems that it depends on the administration of the university and what their goals and mandates are.

BS: Have academics gotten savvier about how this works? And does that make things easier or does it make them more challenging?

RG: I think it makes it easier. The very fact that you have seen such an intermediary industry grow up tells you that the folks at the other end cannot be very good at it. It is much better now because when you speak to the person you are trying to acquire technology from, they understand what you want. A caveat, there does seem to be a subset of academic institutions who recognize that they have a choice and that is not to do business.

The remit is not necessarily to make money. The remit is to disperse the technology for the betterment of mankind. Those of us on the commercial end are trying to do that as well and make a buck on the way. There are a few where you get into a negotiation and they will end up saying, "well, we just do not want to do the deal." That happens reasonably often. They do not have to do the deal, we do.

BS: What is the negative for them?

RG: For not doing business? I could argue that there is not a negative.

MH: One of the issues is that people sometimes have unreasonable financial expectations. That has changed from 10 years ago to now. People used to think if they have something, it has got to be worth $50 million. Managing those expectations and structuring the deal such that everybody walks away feeling treated equally and fairly is becoming more challenging.

BS: Do you find that to be an issue?

LT: I do not think there are that many Gatorades [the successful sports drink created at the University of Florida] out there. Everyone looks at that as a big blockbuster, and they are very few and far between.

MH: Another interesting discussion to have is licensing offices when they have a key invention and are under a social obligation to give an exclusive. Different people have different opinions on that. My take would be if you have such a key invention for society, it is much better to give it to as many people as possible and then let people compete in the marketplace. That is how new inventions will be generated. If somebody has an exclusive, then that is pretty much a monopoly, and that does not create new entrepreneurial spirit or inventions.

BS: Is that handled differently internationally?

EG: [Various countries] have different product liability insurance issues. [The UK does] not have one. The US has one. So when I work with UK companies, I try to tell them what I mean and they say, "I do not need that." I have to say, "yes you do if you want to come into the US market." At universities, sometimes if you have federal sponsorship, if you do any exclusive license, you have to have US company representation.

LT: And also in some universities in Europe, instead of universities calling you with the invention, the intellectual property, the inventors can do it.

RG: But the market is different as well. Remember in the U.K. there is only one buyer. That makes it very different. The reason that the pharma companies need the exclusivity in the US is because the buyer is the health insurance company. It seems to me that eventually the health industry will unionize, if you can put it that way, because they will cease to pay for things that do not work.

BS: Is conflict of interest still an issue?

EG: It is not an issue because this constitutes economic development and getting stuff out. It depends how you do it. There has to be some kind of limitation. Again, it depends on if you are a state or a private university. [Each] will have different rules for conflict of interest. The NIH, for example, now forbids consulting. Our university has no say in any consolidated agreements.

MH: I actually think the NIH policy hurts development because if you license the compounds or technology from an NIH researcher and you do not have that person to talk to once you have transferred the technology and applied to develop it, that is pretty bad. You need the input of these people, at least in the first phase of development.

BS: What is the one lingering, ongoing challenge to technology transfer?

RG: It is more than one. You can not automate the deal, but something that would automate the process before the deal. The issue from a commercial perspective is how do you get to the yesses and get rid of the nos and the maybes. The nos and the maybes cost you your margin, so your cost of goods goes up. In a very minor way, it is the same issue that you hear from the drug companies with the cost of developing a drug. That is the same as the cost of the failures.

Once you get through the volume, the biggest problem is that the technologies often do not work. You could argue that you do not know that until you try it out, but I think it

Richard Gill, PhD, Signet Laboratories

goes back to gap financing. The universities are not in a financial position to do the commercial concept and file the patents. The technology transfer office and the inventor may well be interested in pursuing it commercially, but they do not have the few hundred thousand dollars to actually exemplify it and see if it works. For us that happens to be biomarkers, antibodies, reagents, and diagnostics, but it is equally true if you are looking at molecules or new chemical entities. A lot of universities would love to be in the position to do that initial pharmacokinotic testing. That would save an awful lot of effort of having to do the technology transfer to get it into a company who then spend $50,000 to find out it did not work, and everyone looks stupid. The $50,000 is not the issue, it is the effort and time spent. But I think when we all step into the office on Monday morning, we are all confronted by a dozen things that we should go and look at. That is great, but which one of the dozen are we going to go for?

LT: The point that you bring up transcends the technology transfer office. Erika has all this work, covering all these areas from life science. How does she pick and choose?

RG: I would rather pay Erika $50,000 for her group to have done the work and bring the technology to us validated than for us to work together to do the license, and then have to do the development work inside at the same cost. We certainly try to do it, and that is why the genomics and proteomics end of the market scares us from the volume point of view. You just think you have got a handle on the volume that you have from NCEs and antibodies, etc, and along comes this much bigger volume and you have to pick and choose from that as well.

BS: Do you think that the reward system and the commercial side is a fair match? Is there a feeling that the current system works?

RG: I wish that the academic end and the biotech end were rewarding people for doing deals. The biotech groups are not doing it anymore than the academic groups are. If you are working with biotech as a source of technology, you are often working with salaried individuals who actually do not mind if they do the deal or not. In some cases, they may not want to do the deal because they do not want to be responsible if it costs the company. I know that is negative but…

LS: I agree with Richard because companies and academia have very different needs and objectives. An academic is looking to get tenure, and the way you do that is you publish. A colleague of mine always thought an inventor should be rewarded for patents or deals. They should count just as much as a publication.

This article was published in G & P magazine: Vol. 5, No. 9, November/December, 2005, pp. 22-25.