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AUTM’s 2006 Survey Finds University Tech Transfer Is Strong, Though Spinouts Wane

University technology transfer offices were busier than ever in 2006, although that effort did not translate into an increase in spin-off companies, according to the results of recent survey from the Association of University Technology Managers.
In its US Licensing Activity Survey for the 2006 fiscal year, released last week, AUTM found that university technology-transfer offices filed more patent applications and executed more licenses than previous years, but the number of university spinoffs actually diminished compared to the prior year.
AUTM said that survey respondents are allowed to choose the calendar year or their fiscal year as the reporting period for the survey.
For its 2006 US licensing activity report, AUTM surveyed a total of 189 universities, hospitals, and research institutions, compared with 191 in 2005, and 120 in 1991. As AUTM noted in last year’s annual licensing activity report, the organization’s growth in terms of potential and actual survey respondents has leveled in recent years.
According to the survey results, 697 new products resulting from research at responding institutions were introduced into the market in 2006, compared to 527 in 2005. AUTM said that a total of 4,350 university-derived products were introduced between fiscal year 1998 and 2006.
The survey results indicate that overall tech-transfer activity at US universities is on the rise: US patent applications increased to 15,908, up slightly from 15,115 in 2005; while invention disclosures rose to 18,874, an increase of 1,492, or 8.6 percent, over 2005, and more than twice the increase seen from 2004 to 2005.
According to AUTM, participating universities and research institutions signed 4,963 new licenses in 2006, a slight increase from 4,932 new licenses signed in 2005. In addition, survey respondents reported record staffing levels, with more than 1,800 full-time employees or equivalents, an approximately 6 percent increase over the 1,695 FTEs or equivalent reported in 2005.
However, the AUTM report indicates that the university spinout model has lost a bit of steam in the past year, with 553 new startup companies reported, a decrease of 12 percent from the 628 spinoff companies created in 2005.
This decrease is in spite of frequent intonations by members of the tech-transfer community that the spinout model is ideal for helping universities bridge the so-called funding gap that exists in commercializing research.
“Research shows that university startups are often more successful than regular startups,” Dana Bostrom, vice president of metrics and surveys for AUTM and co-author of the 2006 licensing activity report, told BTW last week. “We like to see that research is going out into the community and having a greater immediate impact in that particular way.”
The survey found that venture capital firms supplied initial funding for slightly less than 20 percent of new startup companies in 2006, which AUTM said was down slightly from 2005; although states and corporate partnerships increased their funding percentages by 5 percent in 2006. AUTM said that friends and family continue to be the most common source of initial funding for university startups.
Bostrom said that the venture funding has remained more or less stable over the last three years, but AUTM members have reported fluctuations in other funding categories — a surprising trend that the organization plans to examine more closely in the future.
“One year you’ll see more federal funding, and other years you’ll see more university funding,” Bostrom said. “That’s interesting, and we’d like to see some more research on how universities are getting funding mechanisms themselves, and how programs such as the Small Business Innovation Research and Small Business Technology Transfer are being related to universities.”
Superstar Schools
In terms of top individual US university performers, the University of California system trumped all other institutions in every major category measuring tech-transfer activity, as it did in 2005.
UC, which submits data for all 10 campuses in its system, was first in licensing income ($193.5 million); licenses and options executed (226); startup companies (39); invention disclosures (1,308); US patents issued (270); and new patent applications (1,075).
For universities besides the UC system, the University of Wisconsin-Madison executed the most technology licenses and options with 159, followed by University of Washington (155); Iowa State University (140); and the Massachusetts Institute of Technology (121).
In the categories of invention disclosures and US patents issued for non-UC schools, the California Institute of Technology (533 and 152, respectively) and MIT (523 and 121) led the way. In the invention disclosures category, Stanford (518) and UW-Madison (464) followed; and in the US patents issued category, Stanford (118) and Johns Hopkins University (82) rounded out the top five.
Stanford also led all non-UC schools with 541 new US patent applications filed, followed by the University of Pennsylvania (517); CalTech (449); and Johns Hopkins (329).
A look at licensing income reveals that after the UC system, New York University garnered the most licensing income in 2006 with $157.4 million. Rounding out the top ten schools in terms of licensing income were Stanford ($61.3 million); Wake Forest University ($60.6 million); University of Minnesota ($56.2 million); MIT ($43.5 million); University of Florida ($42.9 million); UW-Madison ($42.4 million); University of Rochester ($38 million); and University of Washington ($36.2 million).
Notably, if one aggregated data from the reporting campuses of the University of Texas system — UT-Austin, UT-Health Science Center, UT-Medical Branch, UT-Southwestern Medical Center, and MD Anderson Cancer Center — the UT system would rank among the top six universities in all aforementioned categories, except licensing income, where it would place just below the University of Washington with $31.3 million. Unlike UC, however, the UT system does not submit aggregate licensing activity data for all of its campuses.
The Bio Impact
AUTM does not break out the results from its licensing activity survey by category of innovation, although it may begin to do so in the future, Bostrom said.
“AUTM members have always been resistant to classifying disclosures or agreements by field, but this fall we surveyed members about what kinds of things we should start collecting data on, and for the first time there was interest in better information about the kinds of technologies that we’re actually working on,” Bostrom said.
As such, AUTM plans to include more detailed questions about the types of technologies being commercialized from universities, which should provide a better sense of how much biomedical innovation contributes to tech transfer at US universities.
“We’re not going to get down to a super granular level, but we’re going to try to give more information than we’ve done before,” Bostrom said.

“AUTM members have always been resistant to classifying disclosures or agreements by field.”

Nevertheless, she added, it is clear that biotechnology constitutes a “large majority” of university innovation. In addition, she said, a strong biotech focus is apparent from hiring trends in the tech-transfer arena, and from the fact that the National Institutes of Health provides the greatest amount of federal money to university research.
“I suspect that this will slowly decrease over time, however, as we see other kinds of research, particularly funded by [the] National Institute of Standards and Technology, or [in] emerging fields like nanotechnology, which could be [related to] biotech, but could also be outside of that,” Bostrom added.
A scan of the top university tech-transfer performers in terms of licensing income also reveals the financial impact that biomedical innovation has on the field. Of the top 20 licensing income performers, all but two – the Massachusetts Institute of Technology and the University of Georgia – have medical schools. MIT has comprehensive programs in biology and biological engineering, however, while UGA has both a school of veterinary medicine and pharmacy.
Further underscoring the idea that biomedical research provides the biggest tech-transfer payouts is the fact that Massachusetts General Hospital pulled in $318.6 million in licensing income in 2006, while the City of Hope National Medical Center/Beckman Research Institute garnered $98.7 million in licensing income, which would have ranked them first and third, respectively, in the university top-20 licensing income list.
In fact, MGH’s 2006 licensing income eclipsed that of the entire University of California system by about 65 percent, or $125.1 million, in 2006, despite having almost 60 percent fewer cumulative active licenses.
Other leaders in licensing income among reporting US hospitals and research institutions included the Wistar Institute, with $47 million; and Sloan Kettering Institute for Cancer Research, with $43.3 million.
MGH also led reporting hospitals and research institutions in licenses and options executed (131); invention disclosures (339); and US patents issued (56). The Mayo Clinic placed second in licenses and options executed (92); disclosures (302); and patents issued (29). Also of note was the Cleveland Clinic, which filed the most new patent applications in 2006 with 133.
A Different Look
Two universities that placed in the top five in terms of licensing income in 2006 did so despite spending far less on research than other top-earning institutions, and with far fewer active licenses in place for their technologies.
NYU’s reported $157.4 million in licensing income was only about 18 percent less than the entire UC system despite the fact that UC spent approximately 15 times as much as NYU on research in 2006.
At first glance, it would appear that NYU’s licensing income was largely supplemented by royalties from the blockbuster anti-inflammatory drug Remicade. Although the exact percentage is unknown, it has been reported that NYU earned approximately $90 million in licensing income from the drug in 2006. However, that would mean that NYU brought in $67.4 million in additional licensing income, which would still be enough to place it second behind UC.
Wake Forest University, which ranked fourth in licensing income in 2006 with $60.6 million, spent even less on research than NYU, and in fact spent less than any of the top 20 licensing income schools. Wake Forest also was the only university out of the top 15 in licensing income that reported smaller than a triple-digit number for invention disclosures.
According to Michael Batalia, director of the Office of Technology Asset Management at WFU, the school employs a slightly different tack than the classical model of technology transfer in that it focuses more on internally developing and investing in university research with the ultimate goal of building a larger value proposition around a technology.
“If the classic model is: receive invention disclosure, file patent application, and then go find a partner – that’s somewhat of a linear path,” Batalia told BTW last week. “Our [model] is: look at an idea; look at the marketplace; validate the technology through prototyping or proof of concept; maybe file a patent application; test against market technologies to compare with what’s out there; and then maybe reiterate with other patent applications.”
Batalia said that this model serves to make a particular technology more attractive to potential partners because it is much farther down the development pipeline. “At the end of the day, we’ve got several pieces of IP, including the patent applications or patents, but also prototypes, POC work, business plans, comparative data, and maybe even some limited clinical data, depending on what it is.”
WFU also benefits from the fact that its core area of expertise is medical devices, which despite requiring a large amount of investment to ready products for licensing, does not  require nearly as much as pharmaceutical development.
“Our strength as a medical center and an institution is in biomedical devices and imaging – much more so than therapeutics,” Batalia said. “Our chemistry program is very good, but smaller, and we don’t have a pharmacy or medicinal chemistry program.
“Yes, therapeutics tend to garner very large sums, because that’s the way the industry is, but there are a number of devices that have done very well,” Batalia added. “Things like stents have generated large financial numbers, so devices can be as equally as lucrative and important for human health.”
Batalia also said that WFU recently recruited “key investigators” to support the continued growth of its Institute for Regenerative Medicine, which now comprises more than 100 faculty and staff. “There are a few other key areas we’re investing in, and those will hopefully become the next-generation portfolios,” Batalia said.
In light of recent calls for alternative metrics for measuring tech-transfer success (see related article, this issue), a more comprehensive look at AUTM’s 2006 licensing activity data reveals a group of schools that performed well in multiple activity areas compared with peer institutions, and identifies a few schools in particular that may be overlooked when considering the top five performers in any given category.
For instance, when considering a list of the top 20 performers in the categories of licensing income, licenses and options executed, startup companies, invention disclosures, US patents issued, and new US patent applications, several schools appeared in multiple lists.
Three schools – the UC system, MIT, and the University of Florida – finished in the top 20 in all six categories; while four schools – CalTech, Stanford, University of Michigan, and UW-Madison – finished in the top 20 in five of six categories.
Meantime, four schools cracked the top-20 list in four of the six categories: Johns Hopkins University, Purdue University, University of Colorado, and University of Washington.
The University of Florida, University of Michigan, and Purdue University were particularly notable because they showed strong performance in multiple categories, but didn’t crack the top five on any single list.

As with licensing income, aggregating data from the campuses that comprise the University of Texas system also would place the system in the top 20 in all six categories, but not in the top five of any; however, each campus in the UT system is ultimately responsible for its own tech-transfer activity.