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Growing Pains
Resources, competition, and our institutional character

When the focus shifts to the bottom line, basic research always takes a hit.
Margo Bagley, Assistant Professor of Law

Technology transfer is just a subset of knowledge transfer.
Dennis Liotta, Samuel Candler Dobbs Professor of Chemistry

New: "If technology transfer offers a solution to the funding crisis in higher education, it does so only in a very limited way."
An interview with Lanny Liebeskind, Professor of Chemistry

Show me the money . . .
1997 licensing income and patents from Emory and other institutions

What is applied research?

How does funding work in the sciences?

Overheard on campus
Remarks from Stanley Chodorow, CEO of the California Virtual University and former provost of the University of Pennsylvania

Academic Exchange December 1999/January 2000 Contents Page

A new drug to stop AIDS, a gene that heals broken bones, a group of cells that may lead to new treatments for neurological disease.

For the Emory researchers who discovered or invented them, these fruits of long labor are ripe for picking. All patented within the last few years, they may be worth a fortune--both for the researchers and the university. Some now say that technology transfer, or the delivery of such academic research into the marketplace, could be the solution to the looming crisis in higher education funding.

There's a bull market for academic ideas. Emory's net fees and royalties from patented inventions topped out at nearly $5.1 million in 1998--more than twice the amount from the previous year and almost five times as much as in 1994. In 1998, the university was issued thirty-six patents, compared to fourteen in 1997 and six in 1994. Nationally, research universities earned more than $446 million in royalties from inventions in 1997, a 33-percent increase over 1996.

Technology transfer has acquired an even greater immediacy at Emory with the planned Biotechnology Development Center, an "incubator" that will nurture nascent biotechnology companies with facilities, seed funding, and management until they are secure enough to stand on their own as businesses. The center will occupy part of the forty-two-acre Emory West campus, formerly the Georgia Mental Health Institute, which the university purchased last year from the state. In partnership with Georgia Tech, it will focus on high-risk ventures on a sort of mutual-fund model to minimize investor risk. It is projected to have an impact on the state of some $3 billion over ten years.

In a sense, this explosive growth is payoff for decades of investment into biomedical research by the National Institutes of Health and other federal entities. As federally funded basic science programs have begun to generate practical applications, universities have started to reap the benefits of 1980 legislation allowing institutions to own and patent inventions coming out of those programs.

With the aid of the Office of Technology Transfer, created in 1993, Emory researchers may obtain patents and copyrights and market their inventions, either by licensing them to established companies or creating new, "start-up" companies. Emory may receive licensing fees, milestone payments, royalties, or equity from the arrangements. According to current university policy, forty percent of the net income goes to the inventor, twenty percent goes to support the inventor's research, and the remaining forty percent goes back to the university for research and education, as required by law.

With this structure in place, researchers are increasingly becoming entrepreneurs. Professor of Pediatrics Raymond Schinazi and Samuel Candler Dobbs Professor of Chemistry Dennis Liotta are two of three collaborators who patented Coviracil, an antiviral compound that has been shown in clinical trials to be effective in treating aids and hepatitis B infections. Schinazi was one of the founders of Triangle Pharmaceuticals, which is developing Coviracil. Liotta chairs the company's scientific advisory board. Emory holds equity in this publicly-traded company and will receive royalties once the drug is FDA-approved.

Other arrangements involve licensing agreements with companies to develop and market innovations, such as that of Associate Professor of Orthopedics Scott Boden, who identified a gene that encourages bone growth and regeneration after injury. Likewise, Associate Professor of Cell Biology Marla Luskin has licensed her patented method of collecting
certain neuronal cells that could be used to treat neurological disorders.
"If we have any intention of developing an idea and turning it into a product or service, we have to obtain intellectual property protection," says Liotta. "No commercial entity would ever take the risks-which are large-of development unless they were guaranteed some period of exclusive manufacture and sale."

Not everyone views technology transfer as a miracle cure for the
ailing finances of higher education. Some faculty are cautious about research priorities that favor market interests. "I don't think one should only be motivated by the prospect of receiving some financial gain or therapeutic application," says Luskin. "Advancing our understanding of basic science is also a very worthwhile purpose."

Researchers also voice the concern that economic competition and confidentiality agreements in academic-business alliances may hinder collaboration and restrict access to biomedical tools, software, and substances. "There have been people less interested in working together because I have a patent," Luskin says. "That's a drawback in the biotech interaction."

Others worry less about the impact of secrecy. "Confidentiality agreements rarely hinder collaboration, says Boden. "Usually, if a collaboration is critical, an agreement can be signed with the collaborator. The primary reason for confidentiality is to afford the owner of new intellectual property the ability to properly evaluate and file for patent application, if possible, prior to public disclosure, which would prevent and invalidate any patent. In general, this may result in a small delay in release of information, but not indefinite witholding."

Finally, technology transfer often seems tainted with an air of conflict of interest and conflict of commitment: is it proper for professors to hold equity in businesses related to their federally funded research, to have dual commitments to start-up companies and faculty duties?

Samuel Candler Dobbs Professor and chair of chemistry Lanny S. Liebeskind has been aware of these potential conflicts in his experience with technology transfer in three different projects in the last several years. "I have learned first-hand about fundamental philosophical differences that exist between the business community and the academy and about the difficulties associated with any attempt to merge the two," he says.

"Technology transfer requires a great investment of time and effort that are unrelated to scholarship. If creative time is a zero-sum game, something precious has been lost and will never be recovered. Furthermore, once you travel down the technology transfer path, there is an underlying temptation to view much of scholarship in terms of patenting opportunities. This mentality warps the scholarly culture of the university. To protect the latter, discipline, good judgment, and administrative oversight are essential." A.O.A.