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MSU Bringing in New Blood to Breathe Life Into Tech Transfer and Repeat Past Success

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Michigan State University last week appointed a new director for its technology transfer office and is now looking to more than double the size of the office in an effort to revitalize the commercialization of MSU research and remain on par with other research institutions of its size, university officials said last week.
 
The personnel decisions cap a tumultuous year for MSU technology transfer, which also reorganized its inventions and copyrights offices; formed an overarching and more “business-savvy” tech-transfer unit; and witnessed the departure of its previous director after just one month on the job.
 
The revamping of MSU’s tech-transfer operations also comes in the wake of expired blockbuster chemotherapy patents and the resulting loss of related royalty streams in recent years, officials said.
 
Last week, MSU named Mike Poterala, executive director of the school’s Office of Intellectual Property since January and associate general counsel for MSU, as executive director of MSU Technologies, a unit the school formed in February to more efficiently assess, market, and commercialize university technologies.
 
Around the same time as the establishment of MSUT, the school also changed the name of its OIP to the Office of Inventions and Copyright and said that the unit would serve as a partner to MSUT. After having served as university counsel for MSU for several years, Poterala in February was named the first executive director of the OIC while MSU searched for a director of MSUT.
 
In late March, MSU found its preferred candidate in Lisa Kuuttila, former president and CEO of the University of New Mexico’s tech-transfer operation, called STC.UNM.
 
It seemed like a perfect match for a school looking to beef up its tech-commercialization efforts, as Kuuttila had more than 25 years of university technology commercialization experience with schools such as Purdue University, the University of Georgia, and Iowa State University. In addition, Michigan was Kuuttila’s home state.
 
But it was not to be, as Kuuttila left MSU a little over a month later for personal and family reasons, and was soon reappointed president and CEO of STC.UNM.
 
Poterala now takes on Kuuttila’s duties at MSUT. It is unclear whether he will retain his position as executive director of OIC or university counsel.
 
“When I accepted the position [at MSU] it was in large part because it was my home state, and I had a lot of interest in seeing if I could be helpful in contributing to the state of Michigan’s economy,” Kuuttila told BTW last week. “But my reasons for leaving really were very much personal. It was just one of those things.”
 
Even during her brief stint at MSU, Kuuttila said that she got a good sense of the university’s strengths and weaknesses in terms of technology commercialization.
 
“There are just incredible opportunities there, some of which they have exploited very well,” Kuuttila said. “They are one of the few universities that have such a comprehensive program, and that’s one of their strengths. It’s all about building a [broad] portfolio, and is a little bit like being in the venture capital business. Having that breadth of technology areas and the size of the research base there points to a real opportunity for them.”
 
In fiscal year 2005-2006, MSU reported approximately $359 million in science and engineering-related research expenditures, a figure that has grown every year since at least FY 1997-1998, according to MSU’s annual financial report. The school has 17 degree-granting colleges, including typical IP-generating units such as agriculture and natural resources; engineering; human, osteopathic, and veterinary medicine; natural science; and nursing.
 
Despite this, for at least the last 15 years or so MSU did not have the personnel or funding to execute technology development as well as it would have liked, Ian Gray, MSU’s vice president for research and graduate studies, told BTW.
 
“Unlike many of the other universities who beefed up their system many years ago, ours was kind of a four- or five-person operation,” Gray said. “In modern society, with the expectations that MSU or any university has as a driver of economic change, this led us to re-evaluate where we’re going and put in a comprehensive system.”
 
Underscoring the urgency of the situation was the expiration of patents in the last five years surrounding technology developed at MSU in the late 1970s and early 1980s that became the basis for the chemotherapeutic compounds carboplatin and cisplatin.
 
Although it is unclear exactly how much licensing income MSU received from those technologies, they constituted almost all of MSU’s licensing royalties: A 2001 article in Nature Biotechnology estimated that in FY 1997-1998 MSU brought in $24.3 million in revenues from the drugs, which was the same amount the university reported from all licensed patents that year.
 
In the Association of University Technology Managers’ most recent licensing survey, MSU again reported approximately $24 million in licensing income in 2005, one of the last years the school was to capture royalties from cisplatin and carboplatin.
 
Poterala told BTW last week that the patents surrounding the drugs have completely expired, and that the university’s royalty streams from them have essentially “dried up.”
 
Kuuttila said that she believes the early and reliable success of the chemotherapy patents may have in some ways been a detriment to MSU.
 

“If you take away the top one or two income-generating patents from really any large, successful university program, I bet you take away 60 percent of the income. When you look at it that way, it’s really not that strange of a story.”

“In some sense the program was so successful, that it [was] easy to become kind of complacent; whereas at a program at UNM we’re trying to build that base, and every deal we put in place is so critical,” Kuuttila said. “That wasn’t true for them. That can happen to any organization – once you have that big success, you have to still have the incentive to keep going. So my feeling is that they maybe weren’t as aggressive during that period as they could have been.”
 
Added Kuuttila, “if you take away the top one or two income-generating patents from really any large, successful university program, I bet you take away 60 percent of the income. When you look at it that way, it’s really not that strange of a story.”
 
Poterala said that although the expiration of the cisplatin and carboplatin patents was undoubtedly a big driver for the university’s recent efforts to bolster its tech-transfer efforts, he felt that MSU’s tech-transfer office has not really been complacent but, as Gray said, undermanned and underfunded.
 
“The interesting thing about the success that MSU had in licensing carboplatin and cisplatin was that it occurred before there was ever a formal tech-transfer office set up,” Poterala said. “It happened before the whole tech-transfer industry really existed.
 
“The university is recognizing now that tech transfer is something that is very important for a large research university to do well at,” he added. “We need to do it if we’re going to be supportive of faculty, and we need to do it in our case as a land-grant institution to make sure we meet our mission. The university has just recognized that it needs to make a bigger commitment to tech transfer in terms of resources if it wants to be successful.”
 
To that end, MSUT plans to more than double its staff in the coming months to about a dozen employees, and “implement a more robust commercial assessment of our invention disclosures to help us improve our licensing and other commercialization efforts,” Poterala said. “Those are the two biggest changes you’ll see that will represent a departure from the past office of IP.”
 
As part of its growth, MSUT hopes to expand the number of technology managers from three to nine and make them more “college-specific;” and is currently searching for an associate director, database manager, and other employees with IP-management experience, Gray said.
 
“While we have a rich technology background, we need to match the expertise of our faculty with the expertise of our tech-transfer operation,” Gray said. “That was the basis for change – to take a look at what we’ve got and really become more of a business-savvy organization with people who have lived the world of tech transfer. University faculty and administrators believe they can do everything, and they just can’t.”
 
Furthermore, MSU has tapped a consultant named Mike Fritz who, according to Gray, helped overhaul and revitalize the office of technology management at the University of Illinois.
 
“He was willing to help us take many of these successful elements of the Illinois model and incorporate them into MSU,” Gray said. “He’s employed by us now for about 40 or 50 percent of his time until we get this model going. And Illinois has been very successful, when you look at its OTM and how it is linked into Illinois Ventures and the incubator they’ve got there.”
 
But the most pressing charge for MSU now is to do a better job of sorting through the technologies available on campus and assessing their commercial potential, Poterala said, a process that starts with communicating and earning the trust of faculty members.
 
“Obviously when you’re at a research institution that is now close to $400 million in sponsored research … diverse discoveries [are] coming out of that [research],” he said. “To really understand how they are going to fit in the marketplace, it’s tough to have enough people on your staff to be able to analyze the commercial potential of every one of those.”

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