By Ben Butkus
Childrens Hospital Los Angeles and the California Institute of Technology have hired intellectual property brokerage ICAP Ocean Tomo to sell a joint CHLA/CalTech patent portfolio related to a tool that uses Raman spectrometry to non-invasively identify a variety of substances in the body, ICAP Ocean Tomo said last week.
Under the partnership, ICAP Ocean Tomo has conducted due diligence to rate the strength of the patents and is marketing the portfolio to various healthcare and other companies that might be interested in commercializing the technology, which can be used to monitor blood glucose or neurological or cerebrospinal substances.
In exchange, ICAP Ocean Tomo will receive an undisclosed percentage of any up-front payment it receives for the patents as well as future royalties from sales of products using the technology.
ICAP Ocean Tomo said that it is currently taking bids from prospective suitors for the IP, and expects to complete a transaction by the end of November.
The IP portfolio contains nine issued patents and 10 patent applications covering inventions made in the laboratories of Mark Borchert, head of ophthalmology at CHLA and director of the Eye Birth Defects Institute and Eye Technology Institute in the hospital's Vision Center; and James Lambert, a supervisor of the analytical instruments group at the CalTech/NASA Jet Propulsion Laboratory.
ICAP Ocean Tomo said that the patents can be divided into two distinct families: 1) a non-invasive blood glucose monitor and 2) a family of methods for assessing functions and detecting substances residing beyond the blood-brain barrier.
The technology analyzes the Raman spectrum generated by the incidence of a laser beam on the anterior chamber of the eye. The technique is non-invasive and may provide tighter glycemic control without the use of consumables for diabetes management, ICAP Ocean Tomo said.
The company also said the technology may have potential in a variety of other markets such as diagnostics, drug trials, space exploration, and alcohol detection.
Jessica Rousset, director of technology transfer at CHLA, told BTW this week that the patent portfolio is the result of a longstanding research collaboration between Borchert and Lambert.
"We had a really large portfolio that they had developed probably over the last 10 years," Rousset said. "It was very mature IP that lent itself well to this type of partnership with ICAP Ocean Tomo."
Although the IP is jointly owned by CHLA and CalTech, an inter-institutional agreement that preceded Rousset's employment dictates that CHLA acts as lead institution, she said.
CHLA has attempted to market the IP to various companies as the portfolio grew, but was unsuccessful primarily because of what Rousset described as "a high amount of turnover" in the CHLA tech-transfer office.
"Whenever leadership leaves, it can cause a small upheaval," she said. "So I think there wasn't an in-depth, prolonged effort. In addition to this, our physician inventor has a very busy clinical practice. I've been here for just under three years, and we've been talking with VCs and companies, but it’s a lengthy process – trying to get everyone to the table and do due diligence."
Rousset said she was introduced to ICAP Ocean Tomo's services through personal acquaintances and professional meetings, and "we thought it would be worth exploring a different strategy.
"They offer some flexibility in working with academics; specifically, being able to license instead of assign IP," Rousset added. "Previously we thought of it as a straight IP assignment, so a lot of our stuff wouldn't qualify" due to obligations under Bayh-Dole. "Given that there was more flexibility than we thought, we started working with them," she added.
ICAP Ocean Tomo, which was called Ocean Tomo until it became a part of global inter-dealer money broker ICAP in June, describes itself as an intellectual capital merchant bank. It matches buyers and sellers of IP and facilitates IP transactions across several industry sectors.
DJ Nag, a vice president at the company that is brokering the CHLA/CalTech IP, told BTW that he has built relationships with more than 50 tech-transfer offices around the world in an effort to support academic tech transfer. He declined to elaborate.
ICAP Ocean Tomo has several IP-selling methods, including a traditional auction service, but Nag said that it typically works with academic institutions under a model in which the buyer would fully pay upfront for an exclusive license to the technology.
"This is attractive to universities because of their federal obligations under the Bayh-Dole Act," Nag said.
"Whether it's a MedTronic, a Johnson & Johnson, or whoever, they can come in and look at the IP, and the due diligence in terms of the IP is already done," Nag added. "The technical due diligence would, as always, have to be done by the inventors. We are bringing in some level of standardization for getting the transaction done, which reduces the timeline for getting a transaction."
The company has set a deadline of Nov. 30 for selling the CHLA/CalTech IP, at which point "we would take a look at all the bids we have received and see which is the highest, and then the transaction would take place based on what the client wants. In this case CLHA and CalTech want to execute a license with their IP."
ICAP Ocean Tomo typically charges an upfront fee for its services, but again makes an exception in the case of non-profit institutions, and only retains an undisclosed portion of the sale and future royalties, Nag said.
If ICAP Ocean Tomo is unable to find a bidder at an undisclosed minimum price for the technology, then CHLA will continue to market it on its own. "So we didn't see much downside," Rousset said.
"We were kind of able to hedge our risk a little bit by having an up-front fee, but also having a milestone fee if revenues exceed a certain threshold," she added. "If, in six months, we could have this money in pocket, everyone would be pretty happy with that. And if not, we'd be back to our standard way of partnering and we'd probably have some good market feedback to work from."
Rousset said that CHLA is also working with ICAP Ocean Tomo on a different IP portfolio, but declined to provide details, adding that the non-invasive detection technology "is a priority."