Johns Hopkins Technology Transfer
NAME: Wesley Blakeslee
POSITION: Executive director, Johns Hopkins Technology Transfer
NAME: Steven Kubisen
POSITION: Senior director, ventures, Johns Hopkins Technology Transfer
It has been a banner year for Johns Hopkins University in terms of starting up companies based on research conducted at the school.
At the National Council of Entrepreneurial Tech Transfer’s University Startups Conference last week in Washington, DC, officials from Johns Hopkins’ Technology Transfer office disclosed that the school had a hand in 12 startup companies in fiscal 2008 – three times as many as the previous year, and more than twice as many as any year this decade.
Because a majority of Johns Hopkins’ licensable intellectual property stems from its medical school, all of the companies have a life-sciences slant, and several can be considered pure-play therapeutic, diagnostic, or research tool shops.
In addition, six of the 12 startups have been venture capital- or corporate-funded; seven remain based in Maryland; and as an aggregate, the companies have raised more than $76 million in private investment, officials from the Baltimore-based university said.
Senior Director, Ventures
John Hopkins Technology Transfer
The school’s 2008 startups and their general areas of business are: Amplimmune (immunomodulatory therapies); Anza Therapeutics (infectious diseases and cancer); Bamvet Laboratories (veterinary medicine); Fate Therapeutics (stem cell therapies); Gene Facelift (cosmetics); I3 Oncology (diagnostics and personalized cancer therapies); Iatrica (infectious diseases and cancer therapies); Isma (bio-based environmental remediation); Nerveda (therapies and diagnostics for neurodegenerative disease); Ratner BioMedical (neurological tissue regeneration); Sign Path Pharmaceuticals (oncology); and Transposagen Biopharmaceuticals (knockout animal models).
The increase in startup activity is part of a recent effort by Johns Hopkins to step up its technology transfer efforts in part to battle the perception that the university has fallen short in this area.
According to the National Science Foundation the school spent $1.55 billion on research in fiscal year 2007, the 29th year in a row it led the nation in that category. According to university officials, about $1.1 billion of this can be directly attributed to JHU, while the JHU Applied Physics Laboratory (which does its own technology transfer) accounts for the remainder. Of this $1.1 billion in research expenditures, about 2 percent, or $22 million, was industry-sponsored, officials said.
Meantime, according to the most recent licensing activity survey from the Association of University Technology Managers, in 2006 the school finished in the top 10 among reporting research institutions in licenses or options executed; invention disclosures, US patents issues; and new patent applications. And, according to the 2006 report from the Milken Institute entitled “Mind to Market: A Global Analysis of University Biotechnology Transfer and Commercialization,” from 2000 to 2004 JHU ranked third worldwide in biotechnology patenting volume and impact; and in 2004 ranked sixth among US universities in number of IP licensing deals executed.
Still, the perception has lingered that the school has not maximized the return on investment in its research. According to AUTM, its 2006 licensing income was approximately $14 million (in 2005 it was about $12.4 million), placing it well behind many peer institutions that received less research money from both the government and industry.
BTW caught up with Johns Hopkins tech-transfer executives Wesley Blakeslee and Steven Kubisen at last week’s University Startups conference to discuss Johns Hopkins’ recent surge in startup activity and attempts to bolster its tech-transfer reputation. The following is an edited transcript of the interview.
The university spun out 12 companies last year, which was about three to four times as many as it had in any of the previous five years. What caused this spike?
WB: We made a conscious effort two years ago when Steve came on board. He’s a senior director in the technology transfer office – he manages the portfolio – but he’s also the director of marketing development and ventures. We brought him in because he was very successful in [creating] startups at Utah State [University]. He came in specifically to have that as one of the things on his plate. We had support from the administration to be more active in this area, and there were some things we had to put in place to start doing this.
SK: Part of it was some education. As Wes said, the administration was more interested in exploring the opportunity of startups. Previously, they had been a little concerned about them because of the conflict-of-interest issues; the fact that we do a lot of [research] funded by the [National Institutes of Health] and a lot of medical research. So some of this was educating people about how you can manage that, and some of it was educating people on how business works. We didn’t have a lot of business acumen – people understood that – and the administration became more amenable to this.
The other part was getting business people involved, and being pretty open with venture capitalists. Another person that has played a key part in this is [Industrial Liaison Associate Aditya Polsani]. He is also [affiliated with] the biomedical engineering department and the Brain Science Institute, and he and I have brought in venture capitalists to show them some of our technologies, and we tend to go to a lot of these events. So we’ve been more open with the venture community and more engaged with the region to find entrepreneurs and funding sources.
Why the sudden push by the university to launch more startup companies?
WB: We have to look at the way our marketplace has changed. About 90 percent of our inventions are in the life sciences, and even the inventions we have in engineering from the arts and sciences school, a lot of those are medical in nature.
In the past, a lot of those early-stage biomedical technologies would be licensed out to large pharmaceutical companies or other large established companies. In recent years that has changed a lot. Pharma seems to be pulling in these technologies at a much later stage, and the earlier stage companies appear to be the most interested in taking a look at [our] inventions.
If you want to do a good job getting your technologies out, you need to think about startup companies as potential licensees. Startup companies also tend to produce sponsored research work. The typical startup raises funds to advance the technology, and who ends up doing the research but the scientist who invented it? That brings in one of the issues that Steve was talking about: managing conflict of interest properly. But producing sponsored research is very important to faculty, particularly at a university like Johns Hopkins, so that’s another reason to do startups.
We did 92 agreements last year, and 12 of those are with those startup companies. That’s a good percentage of the total volume of work that we did at the university.
SK: And of the 12 companies we started up [last year], six are VC- or corporate-funded. The one corporate deal is actually funded by a foreign company called Biocon, which is the largest biotech company in India. That’s a nice connection for several reasons – not just because of that startup, but also because of the strategic relationships we hope to develop with that company and sort of an entrée into India. This whole globalization thing – we are doing some of that. Is it a specific strategy? No. But some of our faculty [members] have found the connectivity there.
Even though Johns Hopkins is the top-ranked US research institution in terms of total R&D expenditures, there has been a perception that its technology-transfer activity, while strong, could be stronger. Are those real pressures? And if so, where do they come from?
WB: There are two issues. I don’t think we had the resources that we would have liked in tech transfer. We did expand that, which was part of the administration’s commitment two years ago to really support tech transfer. This allowed us to expand the office to where we could have enough licensing people to handle the volume and be able to turn out inventions. And it’s paid off substantially in terms of the number of agreements.
But before that, Hopkins did much better than people gave it credit for. We averaged as many licenses per licensing associate as just about anybody. The University of California system, which is two-and-a-half times our size, did about two-and-a-half as many licenses, but with several times more people than we did.
So on a per-resource basis, we did as well as anybody. What we’ve never had is the big blockbuster hit. The dollar volume has never been what some people have thought we should have, because some [universities] had the big hits that have made $200 million, and we just have never had a large hit like that. Part of it is because of the early-stage nature of the science, and part of it is because that a lot of things that Hopkins invented, it gave away. It chose not to patent or protect [some things] because they were things that we wanted everybody to be able to have freely.
Another primary reason, which is true at our university and just about every other university I’ve talked with, is that you don’t do tech transfer for the dollars. You do it as a faculty service; you do it to attract the most entrepreneurial faculty to your university; and you do it, in our case, because a lot of our faculty treat patients and want to make sure that the inventions get out to where they can help people. Part of the Hopkins mission is to advance science for the benefit of the world, and [our office is] part of that mission. These are the things that motivate us. It’s not just the dollars. The dollars are nice, and we want to increase them so we can support ourselves, but that’s not the primary focus of any tech-transfer office.
SK: On the startups side, you asked if there was a big push by the administration – the goal for the office for this last year was actually six startups, so we exceeded that. So there wasn’t that big of a push. But what is true is that we have very entrepreneurial faculty [that are] interested in seeing new healthcare solutions in the marketplace for their patients. I feel there was a backlog there, and when I came in, I [thought that] every time an entrepreneurial faculty member wants to get a product or service into the marketplace, they have to go find a business partner; they have to go find a funding source. They pave those roads each time. Why don’t we have one person that will do that? And I represent a portfolio, so it’s easier for me to connect up. The venture capital world is very interested in what is coming out of Hopkins; we’re very well-known for our research; but we didn’t have good connectivity to the outside.
That’s why I think you’ve seen this spike – we now have key people involved in trying to connect with the outside world, and we have this tremendous pipeline. So I think you’re going to continue to see us continue on that path.
The process of creating startups is much easier for universities in VC-rich areas or particularly entrepreneurial regions. Has it been a challenge at all not being in a Boston or a San Diego, or even not being inside the Washington, DC, Beltway?
SK: Getting the business entrepreneurs is the toughest piece. Getting the VCs is not tough. The VCs have sort of changed the way they view the world, too. It used to be that an hour-and-a-half flight or drive was as far as they’d go. Now they go everywhere because they are looking for the best deals. The VCs that are funding things at Hopkins now come from California and come from Boston.
[For example], InterWest Partners, which is a fairly large venture fund in California, connected up with one of our professors of neurosurgery [James Campbell] because he had a company idea on his own. They funded that, and then they made him an entrepreneur-in-residence [at Hopkins] for that VC fund. So actually, within Hopkins, we have someone who works for a venture fund part time and is also a Hopkins faculty member. That’s good because he is a faculty member and knows how that works, and he has become very well-connected into the venture world. That will continue to help us make connections.
The entrepreneurs are the tough part, but we probably have more than we think we do in the region. We try to cooperate with everybody in the region. Some of the CEOs we have on these startups are from recommendations from other tech-transfer offices.
WB: That’s very true. The universities in the region are very cooperative. The University of Maryland at Baltimore created a website and put our technologies and their technologies on that website. When [NCET2 Director] Tony [Stanco] was at George Washington University, we linked up with him. We’ve done programs with all of these folks. Our first Angel Investment Workshop, which Steve put together last year in February – we invited several [regional entities] to that event.
SK: Of the 11 companies that presented at that workshop, six were ours and five were from other schools. And [the Maryland Technology Development Corporation] also helped us organize it.
Again, this is all about partnering. I’ve been an entrepreneur myself, and entrepreneurs can tolerate risk. They’re not risk-averse, but they’re also not suicidal. You need to have an area where, if one deal doesn’t work, they can move on to another one, and they don’t have to move. That’s why we have to build this critical mass of principally life sciences startups in the region that will just continue to build on itself.
WB: Maryland does have a maturing life sciences community. So you are able to find that people are becoming available. We were surprised, I think, to find that it’s not as difficult as one might think. We do have a lot of executives that have been there in Maryland because a lot of the bio startups – most of which have been down by Montgomery County because of the NIH and federal government – but there still is a good supply. And UMBC and [Hopkins] now have biotech parks for companies to come in, and there is a rich research environment in the state.
Are there specific areas within the life sciences that are more conducive or more difficult to create startups around?
SK: Of the 12 last year, seven are oncology based. We’re very strong in oncology at Hopkins, and that’s an area that has a huge marketplace, so it’s very VC-fundable.
Medical devices are another area, and although we didn’t have any this past year, the first one we have done this year was actually a medical device. That’s another area that’s probably a little quicker to market and is VC-fundable.
WB: Metabolic disease is probably another good area, because there is such a big potential market, which attracts the investment.
Are these areas more conducive for startups than for licensing to established companies, or is it fairly equal?
SK: It comes down to unmet need. If there is a large unmet need, that’s a sweet spot for the startup companies, but it is usually too early for the pharmas to take it. The other area that we haven’t had any in, but will, is engineering. Some of this is also medical-related – mostly medical device stuff.