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Biomed Dominates Tech Transfer in US; NYU, Columbia, MassGen Tops in Licensing Income

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This story has been updated from a previous version.

Biomedical discoveries were responsible for a majority of technology transfer activity at US universities and research institutes in 2007, according to data compiled by the Association of University Technology Managers.

In addition, universities and research institutions that earned the most licensing income in 2007 generally did so because of one large tech-transfer deal in the life sciences consummated in recent years – supporting the idea that licensing income alone may not be the best metric for determining overall tech-transfer success.

The licensing data were released this week as part of AUTM’s annual licensing activity survey, which examined tech-transfer activity at US universities, non-profit research institutes, and hospitals in 2007.

As in previous years, AUTM collected data from these entities in a variety of categories designed to provide a measure of technology development and licensing activity. These categories include total licenses and options executed; invention disclosures from university faculty, staff, and students; income from licensing agreements; patents applied for and issued; amount of government- and industry-sponsored research; and formation of startup companies.

To arrive at the 2007 results, AUTM surveyed 194 US institutions about their tech-transfer activity, which is within five of the total number of responding institutions in each of the previous five years.

Respondents included 161 universities; 32 hospitals and research institutes; and one technology-investment firm. Of the surveyed institutions, nine chose not to have their individual tech-transfer metrics published, but allowed their responses to be included in AUTM’s overall summary of US tech-transfer activity.

There were a few changes in AUTM’s 2007 survey questions, most notably in the area of disclosures. In the past, AUTM has asked survey participants to provide total “invention disclosures,” which implied only those disclosures that required management of patent rights.

However, the association asked institutions in its 2007 survey to provide all disclosures, which includes other forms of intellectual property such as copyrights, trade secrets, and trademarks.

AUTM also for the first time asked survey participants to distinguish between “closed” disclosures – meaning those disclosures that a tech-transfer office has stopped working on for any number of reasons – and disclosures on which offices continue to work.

Lastly, AUTM also asked survey participants for the first time to answer questions regarding general fields of application for their disclosures, thus shedding some light on which areas of science and technology were the most active areas for tech transfer.

Of the 19,827 total disclosures reported by survey participants, 5,007, or approximately one-quarter, fell into the category of “therapeutics/medical device.” The next two largest categories were “computer/electronics,” which had 1,741, or about 9 percent of all disclosures; and “research tools,” which accounted for about 1,564, or 8 percent of all disclosures.

Other categories included “finance, education, art, music” at 2 percent; “plant” at 1 percent; “other” at 15 percent; and “uncharacterized” at 40 percent. According to AUTM, the latter category was so large because respondents “consistently report that many disclosures are hard to categorize because applications of early-stage research can be difficult to predict.”

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Biomed Cash Cow

AUTM’s overall disclosure numbers are likely skewed to the life sciences because they include disclosures from 32 hospitals or research institutes, the majority of which conduct research solely in the biomedical arena.

However, an examination of tech-transfer activity at some of the top-performing institutions seems to bear out the idea that biomedical innovation may be the most lucrative area for tech transfer, if not the most active.

For instance, the five universities that generated the most licensing income in 2007 were New York University with approximately $791.2 million; Columbia University, with $135.6 million; the University of California system with $97.6 million; Northwestern University with $85 million; and Wake Forest University with $71.2 million.

For each of these schools, biomedical innovations accounted for the majority of licensing income. For instance, NYU’s licensing income figure was primarily due to the $650 million sale of an undisclosed portion of its worldwide royalty interest in the monoclonal antibody Remicade, sold by Johnson & Johnson subsidiary Centocor (see BTW, 5/14/2007).

Likewise, a significant portion of Northwestern’s licensing income was due to the sale of a portion of its worldwide royalty rights to Pfizer’s fibromyalgia drug Lyrica (see BTW, 1/9/2008); and a significant portion of Wake Forest’s licensing income is derived from royalties it receives on patents protecting a wound-care device marketed by medical device firm Kinetic Concepts (see BTW, 1/7/2009).

And, according to the UC system’s 2007 annual tech-transfer report, at least 19 of its top-25-earning inventions fall into either the pharmaceutical, medical device, or biomedical research tool category.

It is also worth noting that the UC system, which submits figures from all 10 of its campuses, reported some $193.5 million in licensing income to AUTM for 2006 – $95.9 million more than in 2007. This was primarily due to a one-time $100 million settlement the system received in 2006 from litigation revolving around a bovine growth hormone invention.

Orin Herskowitz, executive director of Columbia’s Science and Technology Ventures, told BTW this week that historically about 70 percent of its tech-transfer activity and licensing income has derived from the school’s medical center campus.

“Most of the revenue comes from health science-related projects,” Herskowitz said. “Even though we have quite a large number of physical sciences technologies that have had a lot of impact, the revenue typically follows the health sciences.” It is not unusual, he added, for “the really big returns [to be] largely royalties on pharmaceutical products.”

Meanwhile, the two hospitals or research institutions pulling in the most licensing income in 2007 were Massachusetts General Hospital, with $346 million; and City of Hope National Medical Center/Beckman Research Institute with $118 million. Both of these figures would also have cracked the top-five list of university licensing earners.

For the most part, the universities that reported the most licensing income in 2007 did so because of one deal – an idea supported by NYU, Northwestern, and Wake Forest’s tech-transfer results.

This phenomenon can also be seen in schools that reported significant drops in licensing income in 2007 from previous years, such as Emory University, which in 2007 reported $17.7 million in licensing income, but from 2005 to 2007 reported a cumulative $611 million in such income. This is mainly due to the fact that in 2005, Emory received a one-time payment of $525 million from Royalty Pharma for Emory’s royalty interest in the Gilead HIV/AIDS drug Emtriva.

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Bucking the trend, Columbia’s 2007 and ongoing tech-transfer revenues are a result of several innovations as opposed to just one or two, according to Herskowitz.

“Columbia has been more diversified,” he said. “We have a broader portfolio of products than most other schools.” Nevertheless, Herskowitz said that “most schools that have become very successful at this have had one or two very large returns. We try to focus on all our technologies, and we’ve seen success across a lot of them.”

Healthy Tech Transfer

Rounding out the top 10 universities in terms of 2007 licensing income were the University of Minnesota and University of Washington with about $63.3 million each; Massachusetts Institute of Technology with $61.6 million; University of Rochester with $53.3 million; and Stanford University with $50.4 million.

In terms of other tech-transfer categories, UC collected the most disclosures from its faculty, staff, and students with 1,411; followed by the California Institute of Technology with 661; MIT with 487; the University of Wisconsin-Madison/Wisconsin Alumni Research Foundation with 409; and Stanford with 401.

Meantime, UC had the most US patents issued to it in 2007 with 331; followed by MIT with 149; CalTech with 128; UW-Madison/WARF with 124; and Stanford with 106. The UC system also had the most licenses and options executed with 231; followed by UW with 203; University of Georgia with 125; MIT with 116; and Iowa State University with 113.

Lastly, UC led the way again in the startups category with 38; followed by MIT with 24; the University of Utah with 18; Columbia with 12; and Caltech, and UW with 11 apiece.

For US hospitals and research institutions, the Mayo Clinic/Mayo Foundation for Medical Education and Research reported the most disclosures in 2007 with 336; followed by Mass General with 275; and the Cleveland Clinic with 221. Mass General led its peers with 54 new US patents issued; followed by MD Anderson Cancer Center with 34; and the Mayo Clinic with 29.

Additionally, Mass General signed the most licensing and option agreements in 2007 with 102, followed by the Mayo Clinic with 69, and Brigham and Women’s Hospital with 47; while the Mayo Clinic spun out the most new companies with 7, followed by MD Anderson with 6.

According to AUTM, tech-transfer activity in general increased across the board at academic institutions and hospitals in 2007. Absolute staffing levels at tech-transfer offices increased to 1,926 total full-time licensing and other employees from about 1,832 in 2006, the ninth straight year overall staffing levels rose.

Total research expenditures at surveyed institutions increased by $3.4 billion in 2007 to $48.8 billion, the largest absolute increase since 2003. This included an increase of about $460 million in industry-sponsored research, the largest such spike in absolute industry-funded research since 1999.

However, the news is not all good in terms of research funding, according to AUTM. According to its report, although the aggregate total of federal research funding increased in 2007, constant dollars after inflation actually decreased. AUTM also cited data from a recent National Science Foundation report that noted federal support for academic research declined in real terms (after inflation) for two years in a row for the first time in NSF’s record-keeping history.

It would seem that as a result of shrinking federal research dollars, universities are increasingly turning to industry for research funds. In 2007, industry-sponsored research increased 15 percent to $3.42 billion from $2.96 billion in 2006; while federal research funds rose 2.6 percent to $31.7 billion from $30.9 billion. This is the first time since 2002 that industry-sponsored research saw a bigger percentage increase than federally funded research.

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The 19,827 disclosures reported by participating institutions in 2007 were 953, or 6 percent, more than the 18,874 disclosures reported in 2006. Of these disclosures, 1,456, or about 7 percent, were licensed in the same year that they were received.

Meantime, the number of US patents issued to survey respondents increased 11 percent to 3,622 in 2007 from 3,255 in 2006; and the number of provisional patent applications filed increased by 6 percent to 8,328 in 2007 from 7,856 in 2006.

In terms of licensing agreements, survey respondents executed a total of 5,109 licenses and options in 2007, a nearly 3 percent increase over the 4,963 new licenses or options signed in the previous year. Licensing to small companies dominated total licensing with 49.9 percent of all activity, while licensing to startups and large companies accounted for 16.5 percent and 33.5 percent of all transactions, respectively.

Lastly, the 191 participating institutions reported launching 555 startup companies based on their technologies in 2007, about the same as the 554 spinout companies reported in 2006 by 183 institutions. An examination of the typical funding sources for these startups revealed that internal funding or funding from friends or family was the single largest source of capital investment, followed by venture capital investment and angel investment.

The entire AUTM US licensing survey, including metrics for all reporting institutions and notable technology-commercialization success stories can be downloaded from the association's website. AUTM's 2007 licensing survey for Canadian universities and research institutions can also be downloaded on the site.

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