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UCSF's OTM Director Discusses Building a Biotech Transfer Machine


Joel Kirschbaum
Co-founder, director, and senior technology portfolio manager
Office of Technology Management, University of California, San Francisco
Name: Joel Kirschbaum
Position: Co-founder, director, and senior technology portfolio manager, Office of Technology Management, University of California, San Francisco
Background:  Various R&D management positions at Stauffer Chemical, Berlex Biosciences, and Ribogene; faculty member, Harvard Medical School; PhD, biochemistry and molecular biology, Harvard University

The University of California system is one of the most efficient technology transfer operations in the world, particularly in the field of biotechnology, where UC San Francisco leads the way.
According to a 2006 Milken Institute report entitled Mind to Market: A Global Analysis of University Biotechnology Transfer and Commercialization, the UC system was second only to the Massachusetts Institute of Technology in Milken’s Tech Transfer and Commercialization index. Furthermore, UCSF trailed only the consolidated University of Texas system in biotech patent rankings; and was the fourth-ranked university in terms of biotech publications.
According to Joel Kirschbaum, director of UCSF’s Office of Technology Management, part of this success is due to UCSF’s unique research strengths, and part is due to well-trained and effective OTM employees. BTW caught up with Kirschbaum recently to discuss tech transfer at UCSF, and its place within the UC system.
How does the UCSF Office of Technology Management fit within the greater University of California system?
Early on, all of the IP for all of the UC campuses was managed centrally, out of the office of the president known as the Office of Technology Transfer, or OTT. Companies and investors found it very difficult to access UC technologies working through that centralized office. They made [this] sufficiently clear that in 1990, the then-president of the UC system invited any UC campus that wanted to try and do a better job to go ahead and set up its own tech transfer operation. So basically, one by one, they’ve been going independent, as it were, of the central office, although they are still operated within the UC system and in conjunction with the OTT.
UCSF set up its office in 1996. I should add that in every case of a campus setting up its own office, there were always some strings attached, and I think that UCSF is a very good example. In 1996, when the campus sought the right to manage its own IP, it was only allowed to manage those inventions that were created post-inception. So all of the prior UCSF inventions that were already under management in the OTT remained there, and the campus office only managed subsequent inventions. There was also one qualifier to that, which is that any new invention post-1996 that was related to an old UCSF invention managed by the central office then went back to the central office.
So you have a murky situation in that the campus is ostensibly managing its own new IP, but not all of it; and it’s managing none of the earlier IP. This situation existed for each one of the campus offices until fairly recently, when finally the campuses got together and made a strong case for total and complete decentralization. Right now UCSF is going through that process such that all of the inventions that were managed by the central office that belonged to UCSF are now being sent over to our office for management. When this decentralization is done, then the campus offices will have responsibility for managing all of their IP – past, present, and future. Under this old system of dual management responsibility, you had campuses’ IP portfolios being fragmented, and managed by two different offices in different parts of the state, under what some would say were slightly different philosophies. This way, we are able to consolidate all of UCSF’s IP under one office, and people can know what to expect.
Under the decentralization, the OTT will continue to play an important, albeit different, role in that it is downsizing and becoming a provider of administrative services to support the campus tech transfer offices. The OTT will provide a set of core services to the campuses, but those campus offices that want to contract with the OTT for additional services such as patent prosecution, accounting, et cetera, will be able to do so.
Within the UC system, many inventions are a result of collaborations between different campuses. How does that work?
It’s simply that the invention is solely owned by UC, but the campuses where the inventors work also have a financial stake in it. Those two campuses that are involved will get together, and through a letter agreement, will decide which campus will take responsibility for managing the invention, how the costs will be shared, and how the license income will be allocated between the two.
Financially speaking, does the entire UC system benefit along with individual schools when technology is successfully licensed?
Since 1997 – and this is a system-wide formula – 15 percent of the net license income goes to a campus research fund that each campus can design and manage as it deems appropriate; 35 percent goes to the inventors as personal income; and 25 percent goes to the UC general fund, so in that sense the whole system benefits. And then the remaining 25 percent is retained and called the campus share. Within that framework, each campus can allocate that money as it sees fit. For example, at UCSF, the 15-percent research fund money gets combined with the 25-percent campus share, and that 40 percent goes to the school where the inventions were made. We have four schools here: medical, pharmacy, dentistry, and nursing.
At other UC campuses, the 15-percent research fund, in most cases, goes back to the department where the invention was made. That’s quite a striking difference between the two, but is certainly workable within the UC system, because different campuses have different needs and values and ways of operating, and have a certain amount of freedom to do so.
At UCSF, biotechnology is obviously one of the strongest suits. How strong is it compared to tech transfer activities in other industries?
It’s really all we have. UCSF is unique in two ways. First of all, it has no undergraduates – it’s entirely graduate programs and entirely in life sciences. We have no engineering school, no departments of chemistry or physics – it’s all life sciences, both basic and clinical research, so we deal solely in biotech- and pharma-related technologies.
Is that the main reason that UCSF ranks so high in biotech commercialization success?
It depends on what the metric is for performance. If the metric is how much money we make per research dollar spent, the fact that we have a couple of therapeutics – which are very high-value, high-margin types of products that generate a lot of revenue – certainly is in our favor.
I think being in life sciences exclusively is both a blessing and a curse. It’s a blessing in a sense that, again, we’re dealing with products that have the potential to bring in tremendous amounts of money, such as therapeutic drugs. But it’s a curse because it takes 10 to 15 years, if ever, before these technologies ever see the light of day in the marketplace, and that’s a very high-risk, high-attrition rate type of development cycle. In a sense we have the opportunity to do very well, but the likelihood that we’re able to do so is fairly low and long term; whereas other universities that have engineering departments can more easily generate fairly useful technologies that find their way to the marketplace sooner. It’s a lot easier to start up companies based on engineering than on biotechnology, which is much more capital-intensive and has a longer product development [time], subject to FDA approval. So I guess the sword cuts both ways there, and again, I think it comes back to how people want to measure productivity.
Another way to look at it is what percent of the inventions actually end up as licensable property. I’ve heard some people say, just anecdotally, that probably 25 percent or less of university inventions end up being licensable. I was just going over our ten-year data, and noticed that we’re running probably around 30 percent. I don’t know if that difference between a measured 30 percent and an anecdotal report of 25 percent being a very good rate means anything, but we certainly seem to be at the top of that curve. So another potential reason for our success in commercializing technologies is that we maybe have a higher yield of licensable properties here. That is certainly, in part, a tribute to the inventors, but also I think it speaks well of the tech transfer people, who are able to spot these opportunities and are able to move them out into the private sector very effectively.
How many people do you employ?
Right now, we have 13 full-time [and one part-time] employees. Those people are divided between invention case managers and people doing patent prosecution. Three of those people are doing patent prosecution for us; one is an office manager; and the rest are all licensing people, including myself. I should add that there is a fair amount of accounting activity that goes into managing the cash flow here, and that’s handled by a separate group, so we don’t factor that into our head count. However, there are other offices that have all those people under one roof. Comparing headcounts is always a little dangerous, because not all the offices are staffed in the same way, and you need to drill down and look at the individual roles that those people play.
A number of the people in your office have industry backgrounds or advanced degrees, and this is not always the case in tech transfer offices. What types of backgrounds are most desirable for a successful tech transfer operation?
If you look at tech transfer as a linear process, from the time the invention disclosure comes in, to the time the license reaches its term and ends, there are many different tasks that have to be performed. Therefore, each one of those tasks, such as marketing, technology assessment, contracts, or negotiation – each one of those tasks, in theory, provides a point of entry for someone to come in. But when they come in at that point, they have to develop all of the other skills laterally. My feeling is that this is a high-tech business, and the best entry point is for people that are scientifically trained and have advanced degrees. You can always take someone with a PhD in life sciences and teach them about contracts, patent law, and marketing; but you probably can’t take somebody who has a law degree or marketing background, and teach them the science.
I prefer that everybody who is doing licensing here to be very well-grounded, and to have a PhD in the life sciences, because I think it’s very important that we are able to look at the invention, understand it in all of its detail, and discuss it intelligently with the inventor. If we can’t do that, the inventor really loses confidence in our ability to manage that property. I’ve also found that having a good scientific background and understanding is very helpful in marketing, and identifying what companies should be interested. And I also think it’s helpful in negotiation, because we can bring points to bear in a negotiation – based on the science – that an attorney or business development person might not be able to. So I think a scientific background feeds into many of these tasks and is absolutely essential. Other people disagree. There are other offices that are staffed around business development people, or attorneys, or marketing people.
Is it a challenge attracting that kind of a background in terms in terms of salary and career development opportunities?
Yes and no. I have found that bringing people in early in their careers – people who have just finished their PhD or post-doc – can learn a lot in a short period of time. You can hire those people at a much lower salary than someone with many years of experience, train them, and advance their salaries to keep pace with what they learn and how they’re performing. I think we’re able to maintain, by that basis, a competitive salary structure. Industry, of course, has other enticements – the salaries there are going to be a little higher, and there are stocks and benefits – but the office at UCSF is very stable, and I think people overall are pleased with the work environment. We’re always trying to maintain competitive salaries, and it’s always a struggle to do so. We’re actually trying to get some competitive salary information right now within the UC system to see where we stand.
It seems this would be a challenge for tech transfer offices in general. Some TTO’s have been scrutinized and have to defend their role because of a perceived lack of expertise. Have you found that?
I don’t feel like we’ve ever had to defend our existence here. Tech transfer has never really been the central mission of the university, which has always been research and education. It may be that the tech transfer operations are not considered to be central to the inner workings of the university, and therefore don’t get much attention, and maybe that’s why we don’t have to defend ourselves. As long as we do our jobs, bring in money, and don’t cause any problems or scandals – then people just let us go on our way. In fact, I think more and more, as the sentiment in academia and medical centers leans increasingly toward translational research, people are appreciating more and more what we do here.

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