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UPenn’s New CTT Head to Infuse Office With Elements of Thriving Columbia Operation


Michael Cleare
Associate vice provost for research and executive director
Center for Technology Transfer, University of Pennsylvania
Name: Michael Cleare
Position: Associate vice provost for research and executive director, Center for Technology Transfer, University of Pennsylvania (as of Aug. 1)
Background: Executive director of science and technology ventures, Columbia University; various executive positions in R&D and new business development, Johnson Matthey; PhD, chemistry, University of London; BS and MS, chemistry, Imperial College.

Michael Cleare takes over this week as the new director of the University of Pennsylvania’s Center for Technology Transfer. UPenn is hoping that Cleare can help revitalize a program that has traditionally lagged behind its research university peers in terms of commercializing federally funded research.
BTW caught up with Cleare recently to discuss how he plans to leverage his experience gained at Columbia to breathe new life into Penn’s tech-transfer operation.
Was it a difficult decision for you to leave Columbia after being so heavily involved in the success of its technology transfer operation?
Yes, it was a very difficult decision to make. One is a bit reluctant to leave after having put a lot of hard work in that has resulted in something that works really well. Columbia is an extraordinary place, in terms of having entrepreneurial faculty, and gets more than the national average in terms of invention disclosures for the amount of research dollars it receives. We’ve also been extraordinarily successful in having four or five blockbuster patents, so we’ve enjoyed a very large income. This coming year we’ll be over $100 million again.
So I’m leaving a well-oiled machine that is working pretty well, and going down to Penn, where the office has been in a bit of turmoil as of late – I’ll be the third person to run it in the last two years. We’re going to see if we can combine the best of Penn and the best of Columbia to see if we can’t get them back on track, and I’m looking forward to the challenge.
What attracted you to the Penn position?
One is that I can drive to work. I stay in New York during the week in an apartment, and go home [to the Philadelphia area] on weekends, and that does wear a bit thin. That was a very important personal reason.
But I’ve always liked the University of Pennsylvania. I spent some time at the Wharton School there, and I genuinely like the people. Penn deserves to have a good tech-transfer office, and if I can help do that over the next two or three years, that will be a good thing to do for my local university.
Penn has gained a reputation for not exploiting the commercial potential of its research very well. Do you have any insights yet as to why they’ve had some lack of success?
It’s a little early for me to make some of these observations, but I can make one or two generalizations. Penn gets about $800 million in research funding compared with $600 million for Columbia, so it’s actually bigger. One can’t help but think that somewhere in there are some real gems. Of course, if you do find them, they’re probably going to be in the life sciences, and probably will have a lead time of eight to ten years.
Over the next two or three years I intend to build a pipeline of good deals, which, if they were to successfully generate products, would benefit the university. I think the way to evaluate one’s performance when you more or less start from scratch is not by money flow. What you can easily evaluate is the quality of the pipeline of the deals and agreements that you put together – the licensing activity. One simple evaluation is to count how many royalty-bearing deals you have made.
I believe one of the major problems at Penn has been that it is a very decentralized university, and the tech-transfer office has not really gained the confidence of the faculty over the years – particularly in the medical school, and 80 percent of what’s worth having at a university in terms of inventions, commercial technologies, and societal benefit comes from the medical school.
The situation at Penn is really about gaining the confidence of the faculty and providing them better service. I’m going to take some initiatives to do that. At Penn, the tech-transfer office is a long way away from the medical school. It’s the same at Columbia, but we’ve solved that by putting an office in the middle of the medical school, which has licensing officers and support staff. We’re going to put at least some of the people at the Penn Center for Technology Transfer at the medical school. I believe that if we’re going to provide a service for the faculty, we should go to them, make it as easy as possible for them to submit inventions, and form a bond with them and talk with them on a regular basis. They sometimes don’t know they’ve even made an invention. Sometimes it isn’t obvious to someone who is plowing ahead in an academic fashion that part of what they’re doing has significant application in the outside world. I believe that not only will we initiate more contact, but we will also get more disclosures, and they’ll get to know us better.
Another initiative is related to something we do here at Columbia. Here, when we triage technologies – in other words, decide which invention disclosures to patent and pursue, and which ones not to – we actually involve the faculty in that process. Every invention report will be the subject of a small meeting where the faculty member is invited to talk about his invention in front of our IP lawyers, external counsel, and licensing people. It’s much easier if they’ve been privy to the things that are taken into account in making the decision of whether to pursue an invention. If that’s the case, it becomes much easier to say, ‘no,’ because they will understand that there is lots of prior art, and that they would only get very narrow claims out of it, or it is a heavily cluttered market. I find that faculty in general these days are very brilliant people and very good people, and are quite happy to see their academic work translated into practical reality.
I often hear at Columbia about faculty that are thinking about coming to the school to actually interview the tech-transfer office. It’s a strange phenomenon, but having a strong tech-transfer office can be a factor in attracting faculty. And everything starts with the faculty. A tech-transfer office will never be successful if you don’t have good faculty relations.
Also, although the Penn office has some very good people down there already, I have my mind set on beefing up the office with some other really good employees, especially with experience in the life sciences. That’s what we did at Columbia – we found the ideal people for tech transfer, people who appreciate and like the academic ambiance, but also are fully knowledgeable in industrial circles, as well. I’m not attempting to reproduce Columbia at Penn, though, but to take the best of Columbia and Penn and combine them.
How important are personal relationships with industry representatives? Do you think that companies with whom you’ve successfully negotiated deals at Columbia may now be more inclined to work with Penn?
I think it’s a possibility. It always helps if you know somebody. It opens doors, it gets your technology a chance to be checked out. But I think it’s overrated. At the end of the day, the technology sells, and if your technology is good, you can license it to anybody whether you know them or not. It certainly can’t hurt, however, to have made a lot of contacts over the year. But I don’t think it’s as big an advantage as knowing how to run an office, knowing how to identify technologies, and knowing how to do deals.
Also, regarding the point that people may want to come back once they’ve done deals, I suppose it depends on how much they liked the deal. Columbia is passionate about getting technology out, but is also passionate about getting a reasonable return for it. Like anyone else, we realize we have to back-load it and rely on royalties and things like that. Columbia probably does better deals than a lot of universities. Sometimes people come in and think that we’re going to give the technology away, and get a nasty shock when we ask for a reasonable package in return. Some people claim Columbia is difficult to work with, but they don’t mean it in the sense of “difficult to come see or talk to.” They mean that we sometimes drive a hard bargain. I stand by what we do, and don’t think it’s unfair at all. But people do get things out of perspective, and some universities do not believe in or have the people capable of strong deals. So sometimes the relationship thing can be a double-edged sword.
As an example, we had a very successful patent at Columbia called the Axel patent, named after its inventor [Columbia professor Richard Axel.] It’s a patent on co-transformation, one of the old genetic engineering processes where you can take genetic material from one cell and transfer it to another to create a new cell to create the therapeutic protein that you want. This was a phenomenally successful patent, and Columbia earned $700 million from it, which is a huge amount of money. Whenever I say that, people say, “That’s why the Bayh-Dole Act should be changed – that’s far too much money.” But then I point out that we never earned more than a one-percent royalty on it; we licensed it non-exclusively to 50 different companies, about 20 of which produced products out of it. When you do the calculation, that means that $70 billion went into the economy, and that’s just based on the royalty payment that we received. It doesn’t even take into account the fact that some of these were life-saving or life-enhancing drugs, so what value do you put on that? You can’t penalize a school for being successful in terms of money when they’ve done nothing but charge a modest royalty and license a technology non-exclusively. You need to look behind the money to see what something is contributing to society.
Your academic background is with UK-based universities. The UK has been very successful in fostering tech transfer through a university startup model. Do you think that model can be better applied in the US, and do you think that you might apply it more at Penn?
At Penn, we are certainly going to go into a higher gear with startups. Their startup program has sputtered a bit of late. There are many technologies these days where industry is a bit risk-averse, and the only way to get some of these technologies off the ground is to use investment financing and get it to a stage, through a startup, where people will take notice of it and either buy it or invest in it. We certainly need a startup program, and at Columbia we do between seven and 10 startups per year. The reason the UK has been particularly successful is because the government provides so much money for startups. It’s beginning to happen a bit here. The federal government is beginning to think of ways to help small companies, but in the UK they actually have government seed funds to start companies. That’s where most of the companies come from, and the ratio of startups to licensing in the UK is far higher than it is in the US.
I’m not necessarily advocating that the US use the exact same model, but it often crosses my mind that it wouldn’t hurt to put a small amount of money aside to encourage new companies. It doesn’t take a lot. That’s where the job growth in the US comes from. It doesn’t come from big companies getting bigger. In fact, introducing new technologies into big companies usually makes them shrink a bit, if anything.
Can the university itself play a part in that?
Columbia has a small seed fund, or a validation fund, of about $500,000 that I have decision power over. We use that, in $30,000 to $50,000 chunks, to move technologies along to try and bridge that proof-of-principle gap that you hear so much about. I believe Columbia is going to significantly increase the size of that. And there are more than 50 universities that have their own internal funds, so they can help themselves. I’ve asked at Penn, and they’ve promised that I will get $500,000 to use in the same way. But that’s not always aimed at startups – it’s aimed at getting the technology in a position where you can do something with it. Maybe you move it into a position where you can license it. A general rule of thumb is if it’s a disruptive type of technology, you generally do a startup. But if it’s incremental technology, you almost certainly license it, because the infrastructure is already there in existing companies.

The biggest issue in tech transfer today is that investors and industry are risk-averse, so you’ve got to find money to move things forward, and that money is not usually available through the usual federal funding sources. It’s truly amazing how much leverage you can get out of a small amount of seed money, say $50,000. Probably the most leverage at any time during the development of the technology is at that stage.

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