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Philly Area Bioscience Officials Create ‘Clubhouse’ To Foster Commercialization

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A group of Philadelphia-area life science leaders are joining to create an umbrella organization intended to accelerate the region’s commercialization of life sciences technologies — a weakness of the region’s tech-transfer effort identified by a panel of CEOs just over a year ago.
 
The regional leaders have been studying life-sci resources available to entrepreneurs throughout the region, as well as assessing what new services are needed and how they can be accessed by entrepreneurs through the organization, dubbed the “clubhouse.”
 
The Philadelphia clubhouse would launch a “proof-of-concept” center intended to support emerging companies along the lines of two such existing centers nationwide — the Deshpande Center at the MIT School of Engineering and the von Liebig Center at the University of California-San Diego Jacobs School of Engineering — but with more of a focus on the life sciences than those efforts.  
 
Thomas Morr, president and CEO of the regional economic development organization Select Greater Philadelphia, told BioRegion News that Philadelphia-area bioscience officials recently visited both centers, and have been working with University City Science Center President and CEO Stephen Tang to develop the clubhouse “in pursuing the creation of a prototype proof-of-concept center and fund to help analyze ideas and determine their commercial viability at a very early stage, so that we invest efficiently in new technologies going forward.
 
“What is being done now is the development of the business plan for a prototype of how this fund and center would work. It would be funded by funds from the Science Center and other sources,” Morr said in an interview. He referred additional questions to Tang, who through a spokesman said the Science Center would not discuss the tech acceleration effort pending an announcement expected later this year, after planning is completed: “We’re still putting together all the pieces,” the spokesman, Richard Miller, told BRN.
The clubhouse would link the Science Center and 18 other venues in the Philadelphia area with existing tech commercialization programs. “The way this group is working is it’s a large group of people that are collaborating on a variety of projects. If someone steps forward to pursue a project, we try to support it,” Morr said.
 
Morr was one of three panelists to discuss the Philadelphia-area life-sci clubhouse at the “Best and Brightest Forum on Medical Innovation,” held Dec. 15 at the Franklin Institute Science Museum in Philadelphia. The other two were Wistar Institute President and CEO Russel Kaufman and Glen Gaulton, vice dean for research and research training at the University of Pennsylvania.
 
A January 2008 report by the Ewing Marion Kauffman Foundation noted that proof-of-concept centers provide seed funding to early-stage research unable to find funding through the US National Institutes of Health or traditional angel and venture capital investors. Such centers do not typically house their own wet lab space, but instead facilitate exchanges of ideas between academic researchers and businesses interested in commercializing new technologies.
 
The von Liebig center, the report noted, provides seed funding ranging from $15,000 to $75,000 toward development, testing, prototype construction, and/or market research designed to support commercializing UCSD discoveries deemed to be marketable in the short term. The center typically funds 10 to 12 projects annually, which range from 35 percent to 60 percent of the proposals submitted to the center. Projects that win funding must include at least one faculty member from the Jacobs school.
 
The Deshpande center, the report continued, provides up to $250,000 to prepare MIT technology projects for commercialization. The center holds two rounds of grant proposals each year and awards two types of grants — “Ignition” grants of up to $50,000 for projects that have established proof of concept and identified an R&D path and an intellectual property strategy; and “Innovation” grants of up to $250,000 toward full development. The center typically awards sixteen grants each year, roughly 18 percent of the proposals submitted to the center annually. And while Deshpande was launched to focus exclusively on research at MIT’s engineering school, the center now accepts proposals from all MIT faculty.
 
According to the Kauffman report, available here, “there are a number of locations that may be best suited for a new proof of concept center, including, but not limited to the University of Texas Austin, Johns Hopkins, University of Illinois, Northwestern, and University of Wisconsin-Madison.
 
“Regardless of the center’s location, its success will be determined by the strength of its staff and its surrounding social network infrastructure,” the report concluded.
 
Morr spoke in an interview minutes after he and two other panelists cited the clubhouse as a key emerging solution to several of the region’s life-sci industry challenges identified during a recent conference, and in a 2007 report.
 
“If you look at the East Coast, New York was the financial capital, at least until September; Washington is the political capital; and Philadelphia is the pharmaceutical capital,” with some 15 major pharmas located in and around the city of Brotherly Love, Morr said. “We have 92 colleges and universities here, and a concentration of education and medical-related employment here that is about 40 percent greater than the average community in the US.”
 
The clubhouse will consist of both physical space at Science Center and a virtual component — in part by making use of a new online Community Calendar of regional business events developed by the Mid-Atlantic Capital Alliance and BaseCamp Business, a developer of web-based technologies intended to link early-stage companies with incubators, universities, and service providers.
 

“We have 92 colleges and universities here, and a concentration of education and medical-related employment here that is about 40 percent greater than the average community in the US.”

“What we’re doing is basically expanding that matrix to basically flesh it out with information about each of the organizations, and to reorganize in a way that it will be more of a roadmap: Where do you go first, where do you go second, where do you go third?” Morr said. “We have focused on trying to understand what kind of assistance is available to entrepreneurs today in this region, and to market that to them, so they could find it more easily.”
 
Morr’s group has long sought to promote the region’s life sci industry, in part through its Greater Philadelphia Life Sciences directory of companies and industry service providers, available here.
 
“There are at least 130 programs in this region to help entrepreneurs with their business growth, and we’re now trying to flesh that out to make it more of a roadmap to our system,” Morr added. “We hope to market the value holders to a broader audience.”
 
Kaufman told BRN after the conference that the clubhouse was created by Philadelphia-area life-sci industry stakeholders in response to a 2007 report that faulted the region’s tech commercialization effort for not generating the volume of commercial tech activity, including biotech startups, that it could given its concentration of academic institutions and pharmaceutical companies [BRN, Oct. 15, 2007].
 
The 36-page report, titled Accelerating Technology Growth in Greater Philadelphia and available here, was released by CEO Council for Growth, a group of business leaders in Philadelphia and 10 nearby counties in Delaware, New Jersey, and Pennsylvania. The region stretches from Philadelphia north to Princeton, NJ; south to the Delaware cities of Newark and Wilmington; and east and west to counties along the Delaware River.
 
The 2007 report urged business leaders to encourage serial biotech and other tech entrepreneurs to create partnerships with scientists, universities and the public; advocate for greater federal research spending; connect with researchers; and market the region more to VCs and entrepreneurs. The report also urged academic institutions to promote commercial tech transfer, while calling on governments to fund more tech incubators for startups; raise or at least maintain research funding and support the agencies that oversee it; bring together scientists and potential investors; develop a new award program for scientific achievement; and lower taxes.
 
“We, as a community, needed to start to address the gaps in funding entrepreneurs as a core activity,” Morr said, in order to build on what he termed a key selling point of greater Philadelphia to life-sci companies: “Our core strength in this region is commercializing discoveries and taking them to market, so our goal is to try to accelerate that, and thereby grow the economy.”
 
Another funding effort in the works, albeit not part of the clubhouse, is a technology commercialization fund being developed by Thomas Drury Jr., executive director and CEO of the South Jersey Technology Park at Rowan University in Mantua Township, NJ. The campus opened its first building earlier this year with the completion of the 45,000-square-foot Samuel H. Jones Innovation Center, an incubator for life-sci and other tech businesses [BRN, Nov. 10]. That fund, Morr said, “would provide assistance to companies at the venture stage in advancing their technologies.”
 
Since Accelerating Technology Growth came out in 2007, Kaufman said in an interview, leaders of businesses, universities, and research centers have met regularly to build the relationships and connections between their institutions that would comprise the clubhouse.
 
“The biotech people, the biotech companies, the tech transfer people, the venture people, and all the institutions, we’re creating at the Science Center this clubhouse. We’re creating a number of these ‘proof-of-concept’ funds. We’re building a virtual calendar and bulletin board,” Kaufman said. “We’ve made a huge amount of progress, and we’re continuing to push forward.”
 
Kaufman said a second report detailing the Philadelphia region’s progress in tech commercialization is being prepared, though no date has been set for its release.
 
Apparently, much more remains to be done. Asked how well area businesses and institutions have heeded the message of the importance of commercialization since the 2007 report, the University of Pennsylvania’s Gaulton replied: “I think in Philadelphia, we’ve actually seen little difference in the local environment. Most of the relationships we have now are with larger pharmaceutical companies and device companies that are, I would say, in a larger area than the Philadelphia region,” as in the Northeast.
 
Some of that is beyond Penn’s control: One of its industry collaboration partners, GlaxoSmithKline, recently consolidated its US headquarters by stripping the designation from its downtown Philadelphia facilities where it bases 1,500 employees — among 4,500 employed by GSK in the Philly region — and establishing a single US home base in North Carolina’s Research Triangle Park, where it employs 5,000 people and owns 35 buildings [BRN, Nov. 10]. Other pharma giants partnering with Penn include AstraZeneca and Pfizer, both of which have operations outside the Philly region.
 
Gaulton said the clubhouse could help the Philadelphia region fill two gaps: the pool of business development professionals capable of helping researchers transform discoveries into marketable products; and the supply of available funding between basic research efforts funded by the US National Institutes of Health and the commercialization phases funded by federal Small Business Innovation Research grants, venture capital, and angel funds.
 
Penn and other clubhouse institutions, Gaulton told conferees, are working with University City Science Center CEO Stephen Tang to “create transitional bridge funding to sort of cross that early gap when a basic science discovery looks like it can get to the next phase, but is not quite ready for prime time or outside investment.
 
“The need for seed funds is very, very important,” added Gaulton, who is also a professor of pathology and laboratory medicine at Penn.
 
He said the clubhouse could also help researchers bring more discoveries to the market by promoting greater cooperation between academia and business: “We don’t really work across the spectrum of activities, and a large part of this I think relates to the parochialism within academic institutions regarding rewards, intellectual property, and perhaps, on the IP side, even more within industry, on their willingness to truly, truly partner with us. We’re collegial with each other, but we really don’t work intimately together on these various activities, and this is something that should certainly be changed.”
 
Boosting commercialization — and the revenue generated from it — have been key goals of Penn in the two years since it hired Michael Cleare as vice provost for research and executive director of the Center for Technology Transfer, with the goal of shedding its status as a tech-transfer laggard among schools of its size. Cleare elevated Columbia University’s licensing income to $100 million in his previous position as that school’s executive director of science and technology ventures [See BRN sister newsletter Biotech Transfer Week, July 30, 2007].
 
In 2006, the year before Cleare’s hiring, Penn generated only $8.2 million in revenue from technology licensing, one-third below 2003’s figure of $12.3 million. That revenue has roughly doubled in the last two years, to the “mid-teens” of millions of dollars, Gaulton told BRN before the conference, adding: “It’s a little too early to see how many [new technologies developed at the university] will link up to new business ventures, which I do think will happen over time.”
 
Even better for Penn’s School of Medicine, its volume of corporate-sponsored basic research has more than tripled over the past five years, from $15 million to $53 million — a result, he said, of pharma giants and medical device companies outsourcing to academic-business partnerships research they once conducted in house.
 
One recent example: In June, Penn’s med school and Pfizer announced a three-year, $15 million collaboration to consist in part of an initiative to improve the management of cardiovascular risk and patient adherence to treatments among patients of Penn’s health system. Pfizer and Penn also said at the time that their effort would “examine current policy and practices around topics of mutual interest, including ongoing education on new therapeutics for physicians.”
 
Corporate funding accounts for almost half the $120 million Penn generates for its research from sources outside NIH, including disease-focused foundations and the state. In the 2007 federal fiscal year, the latest year for which NIH has released data on its web site, Penn received nearly $451.5 million from the agency.
 
Further advancing research and commercialization, Gaulton said, is among the goals of a new facility Penn is one-third of the way toward constructing. The university’s new $400 million, eight-story Anne and Jerome Fisher Translational Research Center is rising above the east wing of a new $302 million outpatient center the university opened earlier this year, the Penn Health System’s Ruth and Raymond Perelman Center for Advanced Medicine.
 
“When we want to work with clinical samples, and have access to clinical samples, or we want to be engaged in clinical trial work, we’ll have investigators who have very busy laboratories who also will be proximal to the actual place of seeing the patients. So there will be a very easy transit back and forth, as well as an intellectual connection,” Gaulton said.
 
He said the Fisher center “is going to open at the end of 2010.”
 
The new Fisher center will be a 350,000-square-foot facility, but roughly one-third of the space will be unfinished beyond the basic building shell — a consequence of Penn’s struggle to raise funds for the project during the current economic upheaval, Gaulton acknowledged. The remaining two-thirds will contain about 250 laboratories, each on average accommodating between eight and 10 people.

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