Latest science commercialization efforts influenced by U support

by Sam Kean

Science commercialization – turning science research into capital – has always lingered at the edge of universities. But lately it’s edging toward the front.

A 1980 federal law shifted commercialization responsibilities to the schools themselves. As the second generation of lab-to-catalog products matures, two specific projects will aid the University’s push to sell science.

The University will not fund the Biomedical Innovation and Commercialization Initiative or a proposed research and technology park. But since both projects depend on University research for their products, the University will influence their level of success.

These projects represent only the two most developed commercialization initiatives.

The past two years have been a unique time for converting University research into business, said Tony Strauss, assistant vice president for the University’s Office of Patents and Technology Marketing, because for the first time there are several science entrepreneurial projects in development.

As detailed in the 1980 federal Bayh-Dole Act, the University owns the rights to its research. Faculty members disclose any commercially viable technologies to patents and technology, which either licenses the technology to existing businesses or, with entirely unique research, spins off new companies.

The number of patents awarded and licenses granted to University research dipped last year, but only after years of steady increase.

A spike in federal research funds ensured the
university-driven approach to licensing science research has plenty to sell.

Between 1999 and 2003, Congress will double the National Institutes of Health’s budget to $26 billion, and the National Science Foundation’s budget has also increased.

Such federal institutions contributed most of the record $498 million dollars – a 9 percent increase – awarded to University researchers in fiscal 2001. The NIH supplied $217 million of the total.

The University’s most prominent current commercialization project, the Biomedical Innovation and Commercialization Initiative, reflects the federal government’s emphasis on biological research. BICI will promote medical devices, health products and patentable research such as gene therapy, which have limited market potential in Minnesota.

The State Legislature allocated one quarter of BICI’s estimated $40 million start-up cost after preliminary state budget proposals had eliminated it.

Regent Michael O’Keefe compared BICI’s resurrection in the Capitol to the mythical Phoenix dying and rising from its own ashes. “(BICI) was one of the successes of a very difficult legislative session,” O’Keefe said.

At least five private investors will provide the remaining $30 million, said University Vice President for Research Mark Paller. During the past few months, Paller has identified and met with big business representatives to review proposals. Each top-five investor receives one spot on BICI’s seven-person board of directors.

University President Mark Yudof recently named Paller as the University’s BICI representative. Gov. Jesse Ventura appointed Gerald Carlson, former commissioner of the state’s Department of Trade and Economic Development, as the last member.

Paller estimated fund raising would be completed by 2002, when a national search for a CEO begins.

BICI will provide financial opportunities and promote general state welfare, but Paller said the chance to closely examine emerging University technologies will incite investors more than anything else.

Establishing BICI will prevent viable ideas from languishing unused in academic journals, Paller said.

The investing companies, which Paller said already have health-science interests, will also have first rights to invest in potentially lucrative spin-offs.

If successful, BICI could lead to a series of University commercialization initiatives, each in a specialized technology.

In contrast, the proposed 14-acre research and technology park will not limit itself to commercializing one area of science. Its location on unused storage and railroad yards north and east of Mariucci Arena will bridge the biology-based St. Paul campus and physical-science-based East Bank.

The city is searching for a development package and expects to break ground next year, said Jim Forsyth, a planner at the Minneapolis Community Development Agency.

Since the Legislature reduced the top end of Minneapolis’ commercial and industrial taxes by more than one-third, the research park will require more private investors to cover its estimated $100 million cost. Forsyth estimated the city will still provide approximately $5 million, down from its original hopes for between $8 million and $9 million.

But potential royalties could supplement the lower-than-expected state investment. The University, which makes a conscious effort not to pursue business interests, has still gained $40 million from research licenses in the past two years, mostly due to a few lucrative patents. All this money returns to fund University research and the Office of Patents and Technology Marketing.

But BICI and technology-park investors will pocket their proceeds. As science research grows more lucrative, the clamor to channel research into commercial activity at the University will only increase.


Sam Kean encourages comments at [email protected]