The Mann Foundation for Biomedical Engineering has endowed Purdue University with a $100 million gift to establish an institute to help the university commercialize internally developed basic biomedical technologies, the Mann Foundation and Purdue said on Friday.
The gift, which is the largest single endowment in Purdue history, is expected to radically transform Purdue’s technology-transfer efforts and spur economic development in the region and throughout Indiana.
However, according to recent media reports, the deal raises questions over what role the benefactor of such a large gift will have in deciding the direction of basic research or commercialization and how much control it might have over resulting intellectual property.
The Purdue arrangement has also been opened to scrutiny because a pair of North Carolina universities has had difficulty negotiating a similar gift from the Mann Foundation due to disagreements over IP control.
The Mann Foundation said it intends to have at least a dozen deals resembling the Purdue alliance in place with prominent US universities over the next five years.
The Alfred Mann Institute at Purdue will be housed in the school’s Discovery Park, an incubator that currently houses more than 90 technology-related startup companies, many of which spun out of Purdue-developed research.
According to Purdue, the Discovery Park fosters a multi-disciplinary research approach, and works closely with the Purdue Office of Technology Commercialization and Purdue Research Foundation.
One of the main potential benefits of the deal will be an increase in economic development for the area surrounding West Lafayette, Ind., where Purdue is located, as well as for the entire state of Indiana.
“Our agreement states that preferential consideration will be given to Indiana companies wanting to license the university technologies that are further developed by the Alfred Mann Institute,” Purdue President Martin Jischke said in a statement. “This university-private sector partnership can have a tremendous impact on economic development in Indiana.”
Purdue also expects the new institute will significantly boost the school’s return on research investment, which has been modest in recent years compared with its peers.
According to the Association of University Technology Managers’ 2005 Licensing Survey, for the fiscal years 2003-2005, Purdue Research Foundation generated $4.2 million in license income, 611 invention disclosures, and 27 US issued patents, placing it in the middle of the pack of the 144 responding US universities.
However, according to Purdue and the Mann Foundation, the Mann Institute has the potential to increase by five-fold the likelihood of product commercialization and rate of return.
"Through Purdue's Alfred Mann Institute for Biomedical Development, we are participating in a new model of university technology transfer for a new century," Jischke said in the statement. "Through the Purdue Research Park, we already have an effective strategy for technology transfer. But we now can enhance our capabilities to meet the growing need to translate our faculty members' discoveries into useful products.”
Stephen Dahms, Mann Foundation president and CEO, said in a statement that "the product development conducted by the Alfred Mann Institute at Purdue will result in a substantially greater probability of the technologies reaching the market and the patient than if the technologies were handled through the traditional steps used by universities.”
According to Dahms, universities that out-license biomedical technology at the basic research stage are likely to receive as little as 1 percent of the royalties the product is capable of generating.
The Mann Institute will aim to increase this yield by helping to identify approximately two new biomedical projects with commercialization potential per year out of hundreds at Purdue, and may foster as many as six ongoing projects when in full operation, Purdue said in a statement.
The institute will assume the typical responsibilities of a university tech-transfer office, including “intellectual-property analysis and project selection, market analysis, product development, and creation of an exit strategy for the technology,” Purdue said.
As part of the product-development process, faculty at the Indiana University School of Medicine will engage in the research and clinical testing of some of the products. In addition, the staff of the Mann Institute and the Mann Foundation for Biomedical Engineering “will have established relationships with outside entities that acquire emerging biomedical technologies. These relationships will provide opportunities for licensing, sale, or spin-out” of technologies, Purdue said.
According to recent media reports, this component of the deal worries some in the tech-transfer community, who suggest the deal could leave the Mann Foundation with too much influence over scientific, IP, or business decisions.
Fueling this concern is the fact that the University of North Carolina-Chapel Hill and NC State University have had difficulty negotiating a similar endowment from the Mann Foundation due to hang-ups over control of intellectual property rights.
But according to Jeff Davies, vice president for finance for the UNC system, the conversations between UNC and the Mann Foundation were much more positive than have been reported.
“‘Turned down’ is not exactly the way I would choose to characterize it,” Davies told BTW. “We’re very hopeful that we’ll resume discussions with the Mann Foundation. We had great discussions. We liked them very much. I hope they liked us as much as we liked them, and we just found the potential to be very exciting.”
“Our agreement states that preferential consideration will be given to Indiana companies wanting to license the university technologies that are further developed by the Alfred Mann Institute.”
UNC and the Mann Foundation “had differing viewpoints on access to IP,” Davies added. “Quite frankly, I would very much like to understand the Purdue transaction, and if there is anything there that we can use to model our transaction, that would excite me even more. We’re very proud of Purdue.”
Purdue did not disclose details of whether or how it would split royalties and other income between the Mann Foundation, Purdue, and faculty inventors. It is also unknown what terms the Mann Foundation proposed to UNC. Both Purdue and the Mann Foundation told BTW that the institutions have declined to discuss agreement terms at this time.
In a statement, Purdue characterized the partnership as “50-50,” including a Mann Institute board that will comprise five Purdue representatives and five Mann representatives.
"Purdue and the Alfred Mann Foundation worked closely to develop a plan that was fair to all parties involved, including researchers, the university, and the foundation," George Wodicka, professor and head of the Purdue Weldon School of Biomedical Engineering, said in a statement.
This is not the first time a donor-supported technology transfer center has been established at a university, although the model is relatively new. Leon Sandler is the executive director of the Deshpande Center for Techological Innovation at MIT, which was launched in 2002 with an initial $20 million gift from Jaishree Deshpande and Desh Deshpande.
Sandler said that the Deshpandes are generally “hands-off” when it comes to involvement in which technologies the center deems worthy for commercialization or the control of resulting IP. Without knowing the exact terms of the Mann Foundation agreement, he said, it is difficult to say whether there would be any drawbacks.
“If people really are giving money to universities to encourage the transfer of technologies and move things out, I think that’s really positive,” Sandler told BTW.
“If you have a pot of water, it will slowly but surely evaporate and diffuse out,” he added. “But if you put a flame underneath it, it starts to bubble and the water gets out into the air a lot faster. That’s what we do – we’re like a little flame underneath. We’re really trying to accelerate a process.”
Purdue is also not the first university to receive an endowment from the Mann Foundation to set up a tech-commercialization institute on its campus. In 2001 the foundation penned a deal with the University of Southern California, and last October it partnered with the Technion-Israel Institute of Technology in Haifa.
The Mann Foundation, based in Valencia, Calif., said it intends to fund at least 12 such deals “at select entrepreneurial research universities” by 2012.
Mann Foundation founder and chairman Alfred Mann, who is a serial medical device entrepreneur and prominent philanthropist, said in a statement that his overall goal is to “build a bridge between academia and industry to move health-related products to doctors and their patients in an accelerated process.”
Mann is also chairman and CEO of MannKind and Advanced Bionics; chairman of Second Sight, Bioness, Quallion, and Implantable Acoustics; and chairman emeritus of Pacesetter Systems and MiniMed.
He also serves as chairman of the Alfred Mann Institutes at USC and the Technion-Israel Institute of Technology, and will serve in the same position for the Alfred Mann Institute at Purdue.