By Ben Butkus
This article was originally published on Aug. 18.
The University of Maryland Biotechnology Institute said this week that it has exclusively licensed a portfolio of patents covering metal-enhanced fluorescence to spinout company Plasmonix, which hopes to commercialize the technology for a number of life-science and other applications.
The deal comes as UMBI, a campus of the University System of Maryland, is restructuring to parse out various pieces of itself to other UM campuses.
As such, any future financial returns from Plasmonix, if it is able to commercialize the metal-enhanced fluorescence technology, would benefit USM and whichever campus absorbs UMBI's Institute of Fluorescence, where the technology was invented, according to a UMBI official.
"Ultimately [USM] will be the assignee for all of this," Jon Gottlieb, director of technology transfer and commercialization for UMBI, told BTW this week. "My guess is that the IP will flow with the faculty members to the individual campuses."
In the case of the MEF technology, that campus would likely be the University of Maryland, Baltimore County, which is the likeliest candidate to absorb the Institute of Fluorescence, according to a report last month in BTW sister publication BioRegion News (see BRN, 6/19/2009).
The USM Board of Regents decided to disband UMBI, which was founded in 1985, following recommendations in a study released earlier this year by the board that cited flaws such as a lack of graduate and undergraduate students involved in UMBI research; isolation among UMBI’s research centers; an inability to scale up institute programs for greater efficiency; and administrative inefficiencies, according to the report.
Key goals of the restructuring include boosting research collaboration activity and access to outside research funding; yielding a higher level of technology transfer, commercialization, and business start-ups; and advancing economic development in the state, USM said.
Nevertheless, UMBI continues to transfer its technology to the private sector, and has four other recent spinoffs besides Plasmonix in "various stages of development," Gottlieb said. "These things take time to develop," Gottlieb said. "We've been working on Plasmonix for more than a year" before the news of the UMBI restructuring, he added.
The MEF technology was invented by Chris Geddes, director of the Institute of Fluorescence, who developed a method for enhancing the sensitivity and speed of fluorescence detection by placing fluorophores in close proximity to a variety of metals, especially silver.
According to UMBI, the technology has a broad range of biological applications in the area of diagnostic and biological research assays for DNA and proteins, and may have numerous applications in clinical diagnostics and homeland security.
"The technology opens up the fluorescence area to applications where we didn't have the necessary speed or sensitivity before," Gottlieb said. "There are a number of applications, but I think this is really moving toward handheld field-diagnostic [point-of-care] applications."
According to Gottlieb, Geddes has made "numerous" invention disclosures over the past five years, and UMBI has filed several patent applications surrounding different MEF substrates, metals, and enhancements, such as using microwaves to improve the fluorescence signal. It is this portfolio of patents and pending applications that Plasmonix has licensed.
Although UMBI originally marketed the MEF technology to various existing companies, "as the technology became more platform-like, we saw that it could support a startup company," Gottlieb said.
"There wasn't a 'Eureka!' moment, but we started to see multiple applications," Gottlieb added. "We had to ask ourselves if we wanted to sit here and do 20 or 30 licenses for this to various companies, or develop this as efficiently as possible. And there comes a time when it makes more sense to take the startup route."
Thus UMBC founded Plasmonix earlier this year along with Bill Gust, a managing general partner in the Baltimore office of VC firm Anthem Capital Management, who will serve as Plasmonix's CEO and president; and John Holaday, an area biotech businessman with nearly 40 years of experience who will serve as chairman. In addition, the Geddes will serve as Plasmonix's chief scientific officer.
Gust told BTW this week that the company is currently "sorting through and prioritizing a host of applications" for the MEF technology. The company will consider developing its own products and sub-licensing the technology to existing entities.
If Plasmonix develops its own products or services, they would likely be in the life-sciences arena, Gust said, particularly in the area of research tools and biodefense applications such as pathogen detection. "We will focus our resources on the most attractive opportunities," Gust said.
There are a number of other applications being worked on by other undisclosed entities that would not be in Plasmonix's wheelhouse, but that the company might eventually look to out-license, Gust added. He did not elaborate on these applications, but said that some are being developed through confidential sponsored research agreements with Geddes' lab.
The company is also seeking funding, either through angel-type private investors or early-stage VCs, though Gust's firm, Anthem Capital, has no plans to invest.
Gust could not disclose specific terms of Plasmonix's licensing deal with UMBC, but said that the university would receive payments for the technology based on specific funding milestones reached by the company.
"A Catch-22 aspect of any raw startup created to commercialize a university technology is that you really can't close financing until a licensing deal is done," Gust said. "It does create problems for the licensor.
"We are in the process of raising cash and will accelerate that now that we have the license in hand," he added. "We were able to craft an agreement where the pace of cash payments back to UMBI, though not the total amount, will be based on some of our key fundraising milestones."
Non-dilutive funding such as federal Small Business Technology Transfer and Small Business Innovation Research grants are always attractive, "but the problem is they take too long," Gust said. "This will be more feasible down the road. For now we will seek equity financing, and the amount of money we're seeking is not extremely large in terms of your typical life sciences VC deal."