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The role of universities in the commercialization of medical products: a survey of industry views

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THE ROLE OF UNIVERSITIES IN THE COMMERCIALIZATION OF
MEDICAL PRODUCTS: A SURVEY OF INDUSTRY VIEWS

by

Michael W. Jamieson

______________________________________________________________

A Dissertation Presented to the
FACULTY OF THE USC SCHOOL OF PHARMACY
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
DOCTOR OF REGULATORY SCIENCE

August 2011

Copyright 2011 Michael W. Jamieson
ii
DEDICATION
I would like dedicate this dissertation, first and foremost, to my wife Melody
who supported me throughout my entire Master's and Doctoral programs and to my
two children, Kiley and Mack who make me proud to be a parent every single day. I
would also like to dedicate this dissertation to my late mother, Patricia Jamieson,
who always taught me that nothing was impossible.
iii
ACKNOWLEDGEMENTS
I would like to thank all of those individuals whose support and
encouragement guided me throughout the doctoral process and helped to make this
dissertation a reality.
First and foremost, I would like to thank my thesis supervisor, Dr. Frances
Richmond Ph.D, for all of her guidance, encouragement and, most importantly, her
patience. Without her ongoing support, and the occasional prod, over the last three
years none of this would have been possible. I would also like to thank my thesis
committee members, Dr. Ron Alkana Ph.D, Dr. Roberta Brinton Ph.D and Dr.
Gerald Loeb M.D, for the invaluable feedback that they provided me throughout the
entire process; their input played a huge role in helping to define the overall aims and
goals of my doctoral research. In addition I would like to acknowledge the help that
Dr. Kathy Rolle EdD has given me during both my master's and doctoral programs
while I tried to navigate through all of the logistical and administrative hurdles. In
closing, I would like to thank the other students in the 2008 Doctoral Cohort and the
staff of the Regulatory Science program for their support, both personally and
professionally, over the last three years.
iv
TABLE OF CONTENTS
DEDICATION ii
ACKNOWLEDGEMENTS iii
LIST OF TABLES vi
LIST OF FIGURES vii
ABSTRACT ix
CHAPTER 1: OVERVIEW OF THE STUDY 1
1.1 Introduction 1
1.2 Statement of the Problem 9
1.3 Purpose of the Study 12
1.4 Importance of the Study 14
1.5 Limitations, Delimitations, Assumptions 17
1.6 Organization of Thesis 18
CHAPTER 2: LITERATURE REVIEW 19
2.1 Introduction 19
2.2 The Medical Product Development Cycle 25
2.3 Theories Underlying the Study of Product Development and 31
Commercialization
2.3.1 The Knowledge Spillover Theory 32
2.3.2 The Theory of Cascading Commitment 33
2.3.3 The Triple Helix Framework 35
2.4 Technology Transfer Activities in the US 57
2.4.1 Introduction 57
2.4.2 Types of Commercial Partnerships 59
2.4.3 Metrics Used to Measure the Success of University Technology 70
Transfer
2.5 Summary and Research Direction 71
CHAPTER 3: METHODOLOGY 75
3.1 Introduction 75
3.2 Development of Initial Survey 75
3.3 Survey Deployment and Analysis 78
v
CHAPTER 4: RESULTS 81
4.1 Results of Focus Group 81
4.2 Analysis of Survey Results 82
4.2.1 General Information about the Respondent 82
4.2.2 Overall Capabilities of the Universities with which they have 83
had Experience
4.2.3 Interactions with US Universities 86
4.2.4 Trends in Industry Interactions with US Universities 95
4.2.5 Universities in US that are Considered to be “Star Performers” 98
4.2.6 Respondents' Opinions of the Existing Model 102
4.2.7 Cross Tabulations 113
CHAPTER 5: DISCUSSION 115
5.1 Consideration of Methods 115
5.2 Consideration of Results 120
5.2.1 Capabilities of US Universities 120
5.2.2 Industry-University Interactions 122
5.2.3 The Existing Model 129
5.2.4 Current Trends 134
5.3 Conclusions and Future Considerations 139
REFERENCES 142
APPENDICES 150
APPENDIX A: DRUG DISCOVERY AND DEVELOPMENT LOGIC 150
PLAN EXAMPLE (GUARINO, 2007)
APPENDIX B: AUTM LICENSING SURVEY INSTRUMENT 2008 157
(AUTM, 2010A)
APPENDIX C: BENCHMARKING TECHNOLOGY TRANSFER 174
METRICS FROM DIFFERENT COUNTRIES
APPENDIX D: VENTURE CAPITAL–UNIVERSITY INTERFACE: 175
BEST PRACTICES TO MAKE MAXIMUM IMPACT
APPENDIX E: THE USC STEVENS INSTITUTE FOR 183
INNOVATION; DRAFT SURVEY (HOLLY, 2009)
APPENDIX F: FINAL QUALTRICS SURVEY REPORT 187
APPENDIX G: CROSS TABULATIONS 224
vi
LIST OF TABLES
Table 1: Funding for Biomedical Research by Source, 2003-2008 5
(Dorsey, et al., 2010)
Table 2: Participants in Focus Group 77
Table 3: Breakdown of Survey Questions 79
Table 4: If You Feel That One University in the US Does an Outstanding 99
Job of Technology Transfer, Can You Identify That University
and Explain Why?
Table 5: Do You Feel That One University Outside of the US Does an 101
Outstanding Job of Technology Transfer, Can You Identify
Which University and Explain Why?
vii
LIST OF FIGURES
Figure 1: Illustration to Show the Central Problem to Medical Product 16
Commercialization Which is the Challenge of Obtaining Funding
During Development (Valley of Death)
Figure 2: Relative Proportions of University Spin-Offs by Field 19
(Zhang, 2009)
Figure 3: Value Chain for New Medical Technologies 22
Figure 4: The Drug Development Cycle (PhRMA, 2010) 26
Figure 5: The Medical Device Development Cycle (FDA, 2009) 27
Figure 6: The Hub of the Wheel (Lassoff, 2007) 29
Figure 7: Population of University Research Parks in the US by Year 68
Founded (1951-2002)
Figure 8: How Many Employees Work in Your Company/Research 82
Foundation?
Figure 9: What Product Area(s) is/are Your Company/Research 83
Foundation Involved In?
Figure 10: Which of the Following Support Services Have You Found in 84
the Universities With Whom You are Discussing Potential
Technology Transfer Options?
Figure 11: Using the Sliding Scale Below (click and drag) Please Indicate 85
the Importance of Each of the Following Support Services to
Medical Product Development by the University Past the
Discovery Phase
Figure 12: Are There any Elements in the Current University Technology 86
Transfer Models That You Consider to be Impediments to
University-Industry Interaction?
Figure 13: What is the Importance of the Proximity of the University 92
(same city) in the Decision Making Process when Selecting
a University with Whom You Might Partner?
viii
Figure 14: Please Rank the Following Stages in the Product Development 93
Life Cycle that your Company/Research Foundation Prefers to
Get Involved with a University Researcher
Figure 15: Please Indicate the Importance of the Following Factors in 94
Improving the Relationship between Industry and Universities
Figure 16: Does Your Corporate Strategy Include an Increased Role for 95
University Research?
Figure 17: If You Answered Yes to the Question Above, Will Your 96
Company's/Research Foundation's Corporate Budget Allocate
Additional Resources for Working with Universities?
Figure 18: If You Answered Yes to the Question Above, Does Your 96
Company's/Research Foundation's Increased Interaction with
University Researchers Focus Mainly on US Universities?
Figure 19: If You Answered No to the Above Question, Please Rank the 97
Other Geographic Regions that Your Company will be
Concentrating On
Figure 20: Which of the Following Roles Do You See US Universities 98
Playing in Your Company's/Research Foundation's Long-term
R&D Plans?
Figure 21: University and NIH Conflict of Interest Guidelines Have a 103
Negative Effect on How You Work with Potential University
Partners. Do You Agree with this Statement?
Figure 22: Universities in the US Do a Good Job of Working with Industry 103
to Develop New Medical Technologies. Do You Agree with this
Statement?
Figure 23: There is a Need for a Change in the Way in which Universities 109
and Industry Interact. Do You Agree with this Statement?
ix
ABSTRACT
The study gained insight into industry expectations and recommendations
regarding the roles, activities and interactions with US universities in the
development of new medical products. A survey to probe the views of industry was
developed, then tested and validated using a focus group of individuals with
experience both in technology transfer and in academic or industry policy. The
survey was administered to a selected group of senior business development
executives, who are a subset of industry representatives most likely to interact with
university faculty and technology transfer services, and to actively acquire university
assets. Respondents identified that interactions with universities are likely to grow in
future, and these interactions are not limited to US universities or universities in
close geographical proximity to the company. Concerns were expressed over the
current mechanisms for technology transfer and university support of
commercialization. Amongst several areas that might be improved, the availability
of Proof of Concept facilities and funds for early stage feasibility studies were most
often indentified as important. Results suggest several areas in which impediments
appear to exist and where improvements might facilitate the translation of innovative
ideas to the marketplace.

1
CHAPTER 1
OVERVIEW OF THE STUDY
1.1 Introduction
The role that universities should play in economic development is a question
with which every industrialized nation has struggled. Possibly no other country has
spent as much time and money addressing this issue as has the United States (US).
In the period between 1960 and 1980, most academics appeared to believe that
universities should be isolated from responsibilities for economic development and
the “corrupting” influences of industry; the main purpose of research universities
was to conduct “pure” or “basic” research (Slaughter & Leslie, 1997). More
recently, however, views have evolved to recognize that university contributions
have an important role to play in the innovation process. In 1980 the Bayh-Dole Act
was enacted which gave U S universities, small businesses and non-profit
organizations control over intellectual property that resulted from research funded
by the federal government. This legislation shifted the responsibility for the transfer
of technologies stemming from federally funded research to universities conducting
the research, thus allowing academic institutions the autonomy to decide how best to
deal with the technologies that they have developed (Mowery, Nelson, Sampat, &
Ziedonis, 1999). Since that time, governmental policies have continued to foster the
view that universities should be involved in “applied” research and should be able to
benefit financially from the new technologies that they have developed.

2
Universities have a special place in the development of new knowledge. A
1993 article in The Economist was one of the first to use the term “knowledge
factories" to characterize universities in the US (Romer, 1993). Concurrently, a
number of papers began to use the phrase, "the knowledge based economy”, to
capture the notion that knowledge was a principal, perhaps even the principal, driver
for economic development (Drucker, 1993; Florida, 1995; Leonard-Barton, 1995;
Nonaka & Takeuchi, 1995; Romer, 1993, 1995).
Silicon Valley and the area around Boston and Cambridge became examples
to which politicians, academics and business leaders would point to when trying to
persuade others of the regional economic power of knowledge generated by
universities. The “Knowledge Spillover” theory, introduced in the late 1980s, was
one of the first theories to probe the essential elements of technology
commercialization. This theory postulated that "geographically localized knowledge
spillover” in locations proximate to major universities was a crucial element
contributing to the success of technology transfer (Jaffe, 1986, 1989). The physical
proximity between the university and the local industry was assumed to provide
ready access to newly developed technologies. However, time has shown that the
process of turning academic research into social and economic benefits is not a
simple task and many additional factors come into play (Florida, 1999). For
example, many regions across the US have tried to emulate the success of Silicon
Valley and Cambridge/Boston by building incubator facilities and science parks
close to major research universities, but success has been difficult to assure.

3
Today, we see a growing trend to encourage research that promises more
immediate clinical or societal benefit. This trend is reflected in systems of grants
specifically targeted at innovation in small business, and in the addition of regulatory
and clinical milestones to requests for research proposals (RFPs) from organizations
as diverse as the Department of Defense, NASA and the California Institute for
Regenerative Medicine. Both policy and monetary incentives further encourage
universities to reappraise their role in technology transfer and commercialization.
Today, most US universities have some form of Technology Transfer Office
(TTO) and some method to ensure the management of financial conflict of interest
and disclosure of business relationships. Yet this may not be enough. The US
government has expended considerable resources to encourage research beyond the
“basic” stage, so that value from the new findings can be tied to an "applied"
application, and now expects return on this investment.
The innovation and development process in the healthcare sector differs from
that in most other industries. Constraints are imposed by regulatory requirements
administered by agencies such as the Food and Drug Administration (FDA) in the
United States to ensure product safety. Requirements for extensive animal and
human testing are particularly demanding and expensive. For example, the cost of
developing a new drug product to the point of marketing approval was estimated to
be $840 million in 2003 (DiMasi, Hansen, & Grabowski, 2003), and by some
estimates, as much as a billion dollars today. Thus most companies have regulatory
departments with teams of experts who understand and guide the development and

4
testing strategy to facilitate the most rapid translation of such products from bench to
animals to humans. However, universities are relatively late to recognize that
technology development involves more than patenting an invention. Most still do
not have adequate systems in place to address the regulatory issues that may arise
during a research project.
What is the role of the University in the development of the new medical
technologies that will enable Americans to live longer and healthier lives? At least
two major societal pressures appear to have changed the landscape in ways that make
this an important question to investigate. First, the government, and by extension the
society that it represents, has become more emphatic in its call for a strong university
role in product commercialization. For example,
The Council for American Medical Innovation believes that supporting
medical innovation - including translational research - will not only make us
healthier, but will also help lift the US economy. We need to make sure that
the incredible discoveries made by our scientists are translated into useful
medical applications. This cannot happen fast enough, and the policies we
implement today will greatly affect the output of new medicines and cures in
the future. (Former Democratic Leader Richard Gephardt, chairman of the
Council for American Medical Innovation; September 17, 2009)

In addition, the role of industry in early stage research, so important for successful
product commercialization, is weakening. In the 1990s, large pharmaceutical
companies were the most important sources of research and development (R&D)
financing for biotechnology companies, and about three quarters of these
acquisitions were made at early development stage (Dazon, Nicholson, &
McCullough, 2007). The acquired compounds were then developed “in-house” by

5
the R&D teams of the company. A recent study published in the Journal of the
American Medical Association (Dorsey et al., 2010) revealed that the overall funding
for biomedical research from industrial, academic, private and not-for-profit sources
increased by 34% from $75 billion in 2003 to $101.1 billion in 2007. According to
Dorsey and his colleagues, industry was the largest source of funding (58%)
followed by the NIH (27%), other government sources (10%) and private and not-
for-profit research groups (5%) (See Table 1).

Table 1: Funding for Biomedical Research by Source, 2003-2008 (Dorsey, et al.,
2010)

6
However, this model seems to be changing. Many US based healthcare
companies, most notably large pharmaceutical companies with the largest research
budgets, have actively reduced their R&D staff over the past few years.
AstraZeneca announces it would continue cutting jobs by eliminating another
10,400 by 2014, or about 16% of its workforce, including thousands in its
research and development group. About 3,500 R&D jobs will be cut in the
process, the company said, adding that it intends to keep increasing
investment in drug research happening outside of the company. (Wall Street
Journal, January 28, 2010)

AstraZeneca appears to be following a similar strategy to that recently enunciated by
Glaxo Smith Kline PLC, Pfizer, and a number of other pharmaceutical companies. It
illustrates a growing trend in the industry where mounting pressure is placed on
research and development divisions to justify their existence.
Instead, companies increasingly look outside of their internal R&D
operations to buy and then further develop their pipeline products from smaller
biotechnology firms, start-up entities or academic institutions. Further, it seems
from anecdotal and trade literature that industry would prefer to purchase medical
technologies when they are further along the development path, in order to reduce
their own developmental costs and risks.
The opportunity to take a product further along the developmental path than
has previously been typical in the university will require more resources, and these
will be challenging to deploy in the most effective manner. However, on the positive
side, it raises the exciting possibility that the product will be more interesting to one
or more commercial partners. The further along the commercialization pathway that

7
a technology can proceed, the more value that is likely to be added to the technology.
The value chain is a concept from business management that was described and
popularized by Michael Porter (1985), in his book, Competitive Advantage: Creating
and Sustaining Superior Performance. He observes that a value chain is simply a
chain of activities. Products pass through all activities of the chain in order and at
each activity the product gains some value. The chain of activities gives the products
more added value than the sum of added values of all activities (Porter, 1985).
Thus, the developmental stage at which the product is sitting is an important
variable in financial models that place a value on new products (Dazon, et al., 2007).
Further, products that have advanced further along the developmental path are not
only more valuable, but can be less risky, because they have survived certain types
of tests that often cause promising products to be abandoned. For example, proof
that a drug has an acceptable safety profile by testing the drug in animals will add
value to the product because so many other promising lead molecules fail this critical
testing milestone.
The added assurance that further development brings will increase the
confidence in the new potential product and will be less likely to frighten
stockholders and company executives than drugs at a very early stage.
It seems clear from all of these trends that the roles played by different
organizations during medical product development are changing. In the past, the
relative roles played by government, academia and industry were defined according
to a well-accepted model, called the “Triple Helix” model (Leydesdorff &

8
Etzkowitz, 1996, 1998). This model attributed the success of technology transfer and
commercialization to the dynamics of interactions and negotiations among
universities, industry and governments. At the time that it was introduced, the model
suggested that each player had a unique role, the university in knowledge generation
(or novelty production), industry in wealth generation, and government in public
control. However, the boundaries between these players now seem to be eroding and
this may have a large effect on their interactions and expectations. Universities are
more aware of their potential to participate in wealth generation, and industry seems
willing to assign them that role, at least at early development stages. Government is
no longer content to exert control but rather also seems to take an active role in the
funding of developmental, or wealth generation, activities.
Such role changes provoke many questions from the point of view of the
university. If the university is to participate in development work, what specific
aspects of this new work would be most important to foster? What is most valuable
to a company looking to acquire an innovative new product?
Resources at the university are severely limited, so it is important to
understand which types of developmental support services and activities are most
valuable. Further, there is some question about whether the interactions that can
occur between university and academia are unfettered.
At a recent conference of industry, government and academic leaders
sponsored by National Center for Research Resources (NCRR) entitled “CTSA
Industry Forum: Promoting Efficient and Effective Collaborations Among Academia,

9
Government and Industry” university rules governing conflict of interest were also
identified as being disincentives for technology transfer between the university and
industry. Better information about industry views and preferences with regard to
their interactions and acquisitions from universities would help to define those
activities and practices that could enhance the cooperation of these two
complementary players (NCRR, 2010).
America is at risk of losing its competitive edge as a leader in medical
innovation. We will only continue to lead the world if we develop an
infrastructure that supports the essential research that transforms basic
scientific discoveries into practical treatments. (Debra Lappin, President of
the Council for American Medical Innovation; Sept. 17, 2009 Washington
D.C.)

We are interested in the relative and changing dynamics between the three players
identified by the Triple Helix model. An important step is to characterize the
expectations of the different players in order to assure that the players are able to
recognize dissonance in their assumptions about who will be responsible for different
stages of the commercialization process.

1.2 Statement of the Problem
In response to a Business Week article entitled "What's the best way to get
tech out of the ivory tower" Dr. Hale Raveche, President of the Stevens Institute of
Technology in Hoboken, N.J., stated: "The US needs new strategies to meet the
challenges posed by Asian nations. It's time for academic, business, and government
leaders to debate alternatives to the traditional technology transfer model for our

10
research universities" (Raveche, 2008). To reinforce these concerns, a recent
popular article published in Newsweek entitled "Desperately Seeking Cures: How
the Road From Promising Scientific Breakthrough to Real-World remedy Has
Become All But a Dead End" summarized the divide that seems to be growing
between academic research and medical product cures (Sharon Begley &
Carmichael, 2010). Between the years 1996 to 1999 the FDA approved 157 new
drugs; over a similar period from 2006 to 2009 they only approved 74. This article
used a single example of a research discovery that stalled from lack of support when
animal and clinical trials became required. The articles main concern was stated as
follows:
More and more policy makers and patients are … asking, where are the
cures? The answer is that potential cures, or at least treatments, are stuck in
the chasm between a scientific discovery and the doctor's office; what had
been called the Valley of Death. (Sharon Begley & Carmichael, 2010)

The question that remains unanswered, however, is how universities can do a
better job to ensure that discoveries with potential therapeutic use indeed make it into
the hands of doctors and nurses. An area of particular concern is the widening gap
between the support of activities in the university, which traditionally have focused
on basic or “discovery-phase” research, and activities in industry, where tightening
resources have caused a shift away from early stage development. There is growing
pressure from both policy makers and society as a whole for universities to do a
better job of getting their discoveries from "bench to bedside".

11
At the same time medical product companies are announcing that they are
reducing their own internal R&D budgets and will rely more on outside sources,
including academia, to help fill their product development pipelines. The actions
taken by industry suggest that large medical-products companies expect more value
to be added to inventions and other research discoveries before they are adopted in-
house. However, it is not clear what role industry expects universities to play in this
new approach.
If universities are to develop effective strategies to assist the translation of
medical products, it is important to understand the expectations of industry who are
typically the recipients of the new potential products. In an attempt to improve their
ability to commercialize the new technologies developed by their researchers, US
universities have implemented a number of different models including licensing,
Proof of Concept centers, incubators, industry-university research centers,
technology transfer assistance boards, disease foundations, accelerator funds and
spin-offs of university projects. However, essentially nothing is found in the
literature about the industry’s views on “best practices” by universities to ensure that
new discoveries are migrated closer to commercialization. There are several ways
that value can theoretically be added to medical products but some of these methods
are expensive. Without information about industry expectations, it is difficult for
universities to design useful strategies for accelerating the translation of medical
products. It is difficult to determine if the expectations of industry are appropriate or
unrealistic unless those expectations are first determined. Further there may be other

12
aspects of interactions that go beyond the presence or absence of developmental
support services or facilities. For example, at a recent meeting of NCRR (NCRR,
2010), the new policies of universities to control conflicts of interest were identified
as key, and previously unrecognized concern that might inhibit the free flow of ideas
important for technology transfer.

1.3 Purpose of the Study
As more and more medical products companies announce cuts in their
internal R&D budgets they all talk about an increased reliance on finding new
products for their development pipelines from "outside" sources. The role of finding
these new products, in most companies, falls under the mandate of what is normally
called the Business Development group. These are ultimately the people that will be
given the task of searching for, and then assessing, any new medical technologies
that could be of potentially added to their development pipelines.
The goal of the present study was to gain insight into industry expectations
and recommendations regarding the roles, activities and interactions of universities
in the development of new medical products. A survey to probe the views of
industry was developed by consulting with a small group of academic and industry
associates interested in the problem of technology transfer. The survey was tested
and validated using a focus group of individuals with experience both in technology
transfer and in academic or industry policy. The survey was then administered to a
selected group of business development executives, who are considered to be the

13
individuals most likely to interact with university faculty and technology transfer
services, and to actively acquire university assets. With this combination of
approaches, we explored the following questions:
• What do the industry representatives think about the strengths and
weaknesses of current US academic approaches to technology transfer in
the medical products sector?
• What approaches and support services do they see as most critical top add
value to medical products during early stage development in the
university?
• Can they identify universities that they would regard as examples of “star
performers”? What attributes of these universities would place them in
such a category?
• What are the trends that they perceive for future medical product
development? How will these trends impact the capabilities of
universities to transfer technology more or less effectively?
As part of this study, we examined responses of two subgroups, one concerned with
medical device development and another with pharmaceutical development.
Because these two product types often differ in their patterns of technology
commercialization, we compared the views of the two groups in order to determine if
their concerns and opinions are largely congruent or whether elements are indentified
by one or another of the groups that might help us to understand specific issues to be
addressed when working with different types of products. Ultimately the goal of this

14
research project is to contribute information that universities can use to conduct a
gap analysis which looks at their current best practices and compares it with the
industry’s expectations.

1.4 Importance of the Study
Hans Keirstead, a Professor at the University of California, who is credited
with being the first researcher to show that injecting stem cells into rats with severed
spinal cords could improve motor function, was asked if he ever wondered how
many promising leads are gathering dust between the covers of research journals
because no one is willing or able to push them forward, he said, "I don't wonder. I
know it's the case" (S. Begley, 2008). The present research is important because it
may help university administrators to better appreciate the challenges and solutions
to provide support for new medical product development. It will provide specific
information on recent experiences with universities in the commercialization of
medical technologies from the primary target for those activities. This information
will contribute to future benchmarking activities through which universities will be
able to measure the state of their own institutional support mechanisms. If the results
of this thesis assist universities to add needed mechanisms of support for medical
product development, this investment should add value to the new technologies that
are appropriate candidates for commercialization.
Universities that hold the newly-born products longer in the “nursery” may
assure that these products are more attractive to industry partners and their

15
shareholders. Ensuring more confidence in the safety and efficacy of a new medical
product would increase the likelihood of commercial success.
Such success could in turn increase licensing income to the university, and
bring treatments and drugs to patients more quickly. Thus there could be several
winners. The universities may profit financially and may be able to point to more
successes in the technology transfer arena; the industry may acquire products with a
stronger potential for commercial success; and society may profit from having
commercial products that treat currently troublesome medical conditions. This then
becomes what is commonly referred to as a “win-win” scenario for all of the parties
involved (Reck & Lang, 1989).
The research may also open up a dialogue with the FDA and other global
regulatory bodies. It is important for granting and regulatory agencies who are
observing universities from the outside to appreciate their capabilities and limitations
when they develop milestones for grants and other forms of performance-based
assessments. For example, if requests for grant proposals are written with an
unrealistic expectation of institutional support for regulatory activities, many
otherwise productive investigators might be unnecessarily disenfranchised. In many
cases, granting agencies and regulatory agencies may need to appreciate the current
state and needs for regulatory and developmental support so that they can augment
the capabilities through, for example, targeted funding for facilities or training.
However, it is important to have a focused approach to support activities and
services that will be most useful. Information from industry will be important to

16
identify which activities most deserve added support given the fact that resources are
always limited.
Study of mechanisms to support translation should help to minimize the
mismatch between university capabilities and needs of commercial partners who
must bring the product to the health-care system, as commonly exemplified by
figures such as that illustrated below (Figure 1).

Figure 1: Illustration to Show the Central Problem to Medical Product
Commercialization Which is the Challenge of Obtaining Funding During
Development (Valley of Death). Question marks signify the problem of identifying
a funding source for the intermediate stages.

17
1.5 Limitations, Delimitations, Assumptions
The current study is delimited in time and scope. It will look at industry
views of university commercialization models as they exist in the year 2010. The
study in its current form does not include any type of follow up to determine if
university-industry support systems change over time and whether these changes
actually increase the rate of medical technology commercialization by US
Universities. The preliminary nature of this exploratory study is further delimited to
a relatively small subset of subjects.
It is restricted to the views and information from industry Business
Development managers and does not explore the views of other departments
involved in the development of new medical products such as R&D and Clinical
Affairs. Such views would be helpful in future to triangulate the results presented
here. Finally the study is delimited to the US. Other countries have different
educational systems and support mechanisms that may be different and instructive to
this topic.
This study also has limitations, some of which are related to the delimited
nature of the research. It is circumscribed by the availability of appropriate
individuals to be interviewed, and of relevant artifacts to be examined. It also
assumes that those individuals will be honest in their appraisals, and that the author
of this study can maintain fair balance in the interpretation of the qualitative results.
It is limited by the size of the sampling possible in this study, so care must be taken

18
to consider the possibility that external validity may be compromised by the small
sample.

1.6 Organization of Thesis
Chapter 1 is intended to introduce both the issues associated with the current
models being used by US universities for the commercialization of medical research
and the proposed research plan. Chapter 2 reviews the current state of knowledge in
this field by studying the available literature relating to the current technology
transfer models being used at US universities and the three key players involved: (i)
Government, (ii) Industry and (iii) Academia. Chapter 2 will also look at the current
state of knowledge with respect to drug and device development and the metrics used
to assess the performance of various technology transfer models. Chapter 3 outlines
the methods that are proposed to guide the construction of the survey instrument, and
for an initial deployment of this survey to evaluate views on the role of the
university-industry interface in the commercialization of medical products developed
at US universities.
The goal of this initial deployment will be to collect data regarding the
industry's perception of the current technology transfer models being used at US
universities and what, if any, changes they would recommend for the future.

19
CHAPTER 2
LITERATURE REVIEW
2.1 Introduction
Universities in the US have always been considered as a rich source of ideas
that eventually result in important medical products. A study recently published in
the Journal of Technology Transfer showed that over 38% of the university spin-offs
in the US were in the medical products field; the second leading area of spin-offs
was Software at 26% (Zhang, 2009).

Figure 2: Relative Proportions of University Spin-Offs by Field (Zhang, 2009)

20
However, the path between idea and successful product is far from straight.
In a 2007 Business Week article which dealt with the University of Florida's rise in
the ranks of universities with strong technology transfer capabilities, Michael Arndt
points out that much of American higher education is still struggling to turn ideas
into cash.
From 2000-2005, university research funding jumped nearly 45% while over
the same time frame money earned from license fees to universities rose at only half
that pace (Arndt, 2007).
Two factors are important in producing a successful commercial product.
First is the need to reduce the risk of product failure. Second is the need to
maximize product value so that resources are available to motivate both researchers
and institutions to repeat the process, as part of the cycle in which more new ideas
and products continue to feed the innovation pipeline. The further along the
commercialization curve that a technology can travel the more value that can be
added to the technology. The “value chain” is a concept from business management
that was first described and popularized by Michael Porter in his 1985 best-selling
book, Competitive Advantage: Creating and Sustaining Superior
Performance.(Porter, 1985), that described a value chain as simply a chain of
activities. Products pass sequentially through all activities of the chain; the
completion of each activity results in a certain level of gain in value. The successful
completion of each stage in this chain of activities has inherent value as well, and

21
gives the products more added value than the simple sum of added values of all
activities.
Every product has a value chain, but medical products have a value chain that
is particularly complex and difficult to manage. This is in large part because such
products are highly regulated by governmental agencies such as the US FDA. These
regulatory agencies will allow product commercialization only after the product has
been shown to complete a number of additional activities to assure quality, that often
include performance and safety testing on the bench, in animals and finally in
humans.
This well-documented set of activities for drugs has been estimated by Di
Masi and his colleagues (2006) to take on average, 14 years and more than $800
million dollars. Like other aspects of the value chain, the regulatory “value chain”
recognizes the reduction of risk, or conversely, the increase in “regulatory certainty”,
as the product passes through certain activities successfully.
Some of these activities are illustrated in Figure 3. As the level of regulatory
certainty increases, the value of the product also increases.
The very long path that has been made necessary by regulatory requirements
has a very real cost for successful product development and commercial success.
Inspection of literature, trade journal articles and speeches by venture capitalists
richly document the concern of investors that medical products remain risky
investments for a longer time than conventional products.

22

Figure 3: Value Chain for New Medical Technologies

Venture capitalists of the millennium, badly burned when their dot-com
investments lost value, are still wary of university spin-offs, particularly in the life
sciences. Studies by Price-Waterhouse-Coopers and the National Venture Capital
Association (Price-Waterhouse-Coopers & NVCA, 2007) and Venture One
(VentureOne, 2006) have shown that angel investors and venture capitalists, often
the first investors to support products in early stage development, also are waiting
until later stages to invest in university based technologies. Even if
commercialization were to be realized by a small start-up company, complex
products such as drugs and high-risk medical devices have ongoing requirements for

23
quality management, regulatory documentation and marketing sophistication beyond
the capabilities of the small company. Consequently, few medical products that are
developed initially in the university are commercialized by the nascent company that
might have been formed by the investigators with university support. Instead at
some point, a larger company with richer resources and stronger experience in
commercialization will almost certainly acquire the emerging product and carry the
expensive late-stage development activities needed for regulatory and reimbursement
approval.
Yet large multinational companies that acquire new medical products have
problems of their own. They often must answer to stockholders who are concerned
that acquisitions show commercial success soon after acquisition, and they are
typically risk intolerant.
A medical product that is still early in development holds very high
commercial risk. Anyone who follows the stock market has seen how healthcare
company shares can change precipitously by the announcement of regulatory
approvals or disapprovals.
The case of Dendreon is a good example of how an FDA ruling can severely
affect the stock price of a healthcare company.
The company's shares fell 64% in very heavy trading after the company
announced that the Food and Drug Administration wants more trials before
approving its prostate cancer drug. The Seattle-based company said the FDA
sought additional clinical data on the survival benefit of its drug Provenge,
which the company hopes will be a prominent treatment for advanced
prostate cancer. Dendreon has already completed two Phase III, or final-stage
trials of the drug. However, those studies were relatively small, testing about

24
100 patients apiece. The FDA ruling effectively holds up approval for
Provenge until a larger Phase III study is completed in 2010. (Swarts, 2007)

However, if that product has successfully passed animal tests and has reached
“first in human” status, it is considered to have reached a higher level of "regulatory
certainty". Thus, it is not surprising that most new pharmaceutical compounds are
acquired in or after even Phase 2 studies are completed. The demonstration that the
drug is safe in normal volunteers and shows sufficient effectiveness in albeit a small
population of patients augers well for the success of the product in the longer and
more costly phase III studies that FDA will demand prior to approval. At this stage,
a larger company might be willing to pay a much higher price for a later stage
acquisition, to reduce its ultimate business risk.
Not all biomedical applications are developed in exactly the same way, so
that the ultimate application of the technology and its potential multiplicity of actions
must be taken into consideration when trying to understand how valuable the
technology will be and when will be the best time for acquisition, if indeed
acquisition is appropriate.
In their 2004 paper entitled "Different Timelines for Different Technologies",
Powell and Moris compared the commercialization patterns of biotechnology,
electronics/photonics, information technology, manufacturing and materials-
chemistry research projects that were funded through the Advanced Technology
Program (ATP), a government program that is a public–private partnership program

25
aimed at bringing new civilian technologies closer to commercialization (Powell &
Moris, 2004).
They concluded that medical products are generally more complicated and
less amenable to early commercialization than other product types. Nevertheless,
some biotechnology products, such as those with diagnostic rather than therapeutic
applications, have a number of early opportunities such as use in research and testing
services where human trials are not needed before the products can be sold. These
advantages are attractive to potential commercial partners or acquirers even if
biotechnology applications do not generate large cash flows or economic impact in
this initial application. The modest cash flows that the product can generate in
nonclinical applications can help to support the additional development needed to
validate use in diagnostic or therapeutic applications in man where the product may
be most valuable from a sales point of view.

2.2 The Medical Product Development Cycle
The drug value chain is based on a development route that follows four major
steps (i) Drug Discovery (ii) Preclinical Activities (iii) Clinical Trials (Phase I, II and
III) and (iv) FDA Review.
Di Masi and his colleagues surveyed ten pharmaceutical firms and analyzed
the development costs of sixty eight randomly selected new drugs. The results
showed that the average cost per new drug was US$403 million (2000 dollars).

26

Figure 4: The Drug Development Cycle (PhRMA, 2010)

Capitalizing these costs to the point of marketing approval resulted in a total
pre-approval cost of US$802 million (2000 dollars). The study also showed that the
total capitalized costs increased at an annual rate of 7.4% above general price
inflation (DiMasi, et al., 2003).
The costs estimated by Dimasi and his colleagues were based on a relatively
restricted sample of products. A more recent study by the US Government (Adams
& Brantner, 2006) argues that "Policymakers should take care in using a single
number to characterize drug costs and that these cost numbers are determined by a
series of factors, including the strategic decision making of the drug firm
themselves."
The study by Adams and Brantner concluded that considerable variation
exists in the cost of developing different drugs. The results of their study estimated
the cost of new drug development to range from $500 million to $2 billion
depending on the type of drug or the firm developing the drug. As an example, they

27
compared the cost of developing an HIV/AIDS drug, estimated at $479 million, to
that of a new drug to treat rheumatoid arthritis estimated at almost twice the cost,
$936 million. They suggested that the large discrepancy could be explained, at least
in part, by the FDA's regulatory policies associated with the development of new
treatments for HIV/AIDS that include accelerated review times and reduced clinical
trial requirements for these critically-important drugs.
The medical device value chain is based on a development route that is, in
most cases, less complicated, less expensive and less time-consuming than that for
drugs.

Figure 5: The Medical Device Development Cycle (FDA, 2009)

No literature could be identified that analyzed and/or estimated the costs of
medical-device development. This lack of research may not be surprising; medical
devices vary hugely in complexity, from cardiac pacemakers to surgical gloves, so

28
that the development of different devices would be expected to differ substantially in
complexity and cost, making estimates for “average” products unrepresentative.
It is perhaps apparent from the above descriptions that the innovation and
development process underlying medical product commercialization is very different
to that of other industries. Added complexity is introduced because of the constraints
imposed by the regulatory bodies such as the FDA in the United States. The
regulations imposed by bodies like the FDA require a large number of
developmental activities and reporting requirements that are collectively referred to
as "Regulatory Affairs". Many researchers in industry and universities have
historically viewed "regulatory" activities as a hindrance rather than a help. However
the role of regulatory affairs has changed considerably in the last decade.
Back in those prehistoric times, Regulatory (or 'Registration', as it was then)
was more or less a 'post office,' and the work essentially involved compiling
reports written by the experts in R&D and mailing them to the various
regulatory authorities. The modern view of regulatory affairs is as a dynamic,
business-oriented unit, focused on getting products to the market with a
commercially viable label, as quickly as possible and for the least possible
expense. Regulatory is involved at a very early stage in the development
process, often helping with 'portfolio management,' choosing which products
should progress to the clinic. (Lassoff, 2007).

The role of the regulatory affairs department is seen in the view of Lassoff as
a central process that identifies and brings together the many activities necessary to
achieve product commercialization within the regulated environment as illustrated in
Figure 6.

29

Figure 6: The Hub of the Wheel (Lassoff, 2007)

Healthcare companies have long recognized the importance that Regulatory
Affairs plays in the strategic aspects of a new product development, and typically
have relatively large departments of highly trained personnel to assure its efficient
function.
If a drug is worth a million dollars a day on the market, then the loss of
weeks or months to regulatory delays can be catastrophic for the recovery of the
many millions of dollars invested in research and development. However, most
universities still have underdeveloped systems in place to address the regulatory
issues that may arise during a research project. If regulatory affairs is so important

30
to the successful development of new medical technologies then why is it not in
evidence at most research universities? It may be logical to suggest that those
universities wanting to do a better job of medical-product commercialization will
attempt to learn from the models adopted by the healthcare industry. Universities can
use these models to identify areas of specialization that they are missing, and
consider whether investments in these areas might be useful and profitable.
Regulatory affairs defined narrowly as the strategic identification of the most
efficient translation of the product from bench to market is only one of the
considerations that might be important in the way that new products are developed.
For example, in the recent past, the outcomes assessments, or the effectiveness of the
product in relation to other products for a similar therapeutic indication, given
relative costs, have also been seen as important in assuring timely commercialization
and ultimate product reimbursement. This field of Health Economics/
Pharmacoeconomics involves the application of the principles of economics to health
related products, programs and services. In the case of pharmaceuticals, economic
viability depends on a variety of factors, including product efficacy, safety, patient
reported outcomes, pricing, effectiveness and formulation (Hemels, Wolden, &
Einarson, 2009).
In his 1997 paper entitled " The Effect of Pharmacoeconomics on Company
Research and Development Decisions", Graboski noted that the majority of
developmental costs accrue in later stages of the development cycle, when
regulatory activities and strategies are particularly important; most “go or no-go”

31
decisions were made after the Phase II trials are finished. Graboski further suggested
that considerations of health economics could be introduced at an earlier stage in the
development cycle to help make go-no decisions sooner (Grabowski, 1997).
The growing emphasis on cost savings and efficiencies as well as safety and
efficacy at early developmental stages underline the central role that well-designed
regulatory and clinical staging together with estimation of costs and effectiveness
can play in managing developmental costs. Most of these activities are grouped into
the catch-all phrase of regulatory strategy, even though the activities are multifaceted
and increasingly multidisciplinary.

2.3 Theories Underlying the Study of Product Development and
Commercialization
It seems clear from much of the literature that discoveries of new materials,
methods and technologies in the university can help to drive medical-product
innovations. These innovations must in some way, and at some point, leave the
university in order to be sold through a commercial enterprise. However, the critical
events and activities that will make this transition successful are not well-
characterized. A few theories have been advanced that try to characterize success
factors underlying technology transfer and commercialization in the past, and these
may have value in specific studies of medical product commercialization, even
though developers did not consider medical products specifically in the development
of their theories. Three theories that initially were explored to guide the research to

32
be undertaken in this work include 1) the Knowledge Spillover theory, 2) the theory
of Cascading Commitment, and 3) the Triple Helix model.

2.3.1 The Knowledge Spillover Theory
The “Knowledge Spillover” theory, introduced in the late 1980s, was one of
the first theories that attempted to characterize the essential elements of technology
commercialization. This theory postulated that "geographically localized knowledge
spillover" in locations proximal to major universities was a crucial element
contributing to the success of technology transfer (Jaffe, 1986, 1989).
The physical proximity between the university and the local industry was
assumed to provide ready access to newly developed technologies. Add to the
relevance of the proximity itself were the social ties developed when individuals in
businesses and universities live in the same community and attend university
seminars or industry meetings where topics are discussed that appear to benefit the
local economy. This is one of the reasons that a large percentage of non-profit
incubators and science parks are located near universities and are subsidized by both
city and state governments.
The basic concept of the Knowledge Spillover Theory is implicit in much of
the research dealing with technology transfer. Many studies of entrepreneurship and
company growth through R&D can be found in the literature. Most of them focus on
the importance of finding and recognizing new opportunities and ultimately deciding
to exploit these opportunities. According to the Knowledge Spillover theory of

33
entrepreneurship, “people start a new firm because they are not able to
commercialize their ideas and knowledge within the context of their existing firm or
organization”(Gulbranson & Audretsch, 2008). The knowledge that is created within
institutions like universities eventually results in knowledge spillovers, which allow
entrepreneurs to identify and potentially exploit these commercial opportunities
(Acs, Audretsch, Braunerhjelm, & Carlsson, 2009).
Thus an important driver that is thought to contribute to the success of new-
product commercialization is the availability of new ideas from universities. Many of
the studies undertaken to explore the validity of this premise since the theory was
introduced have concluded that universities play a very important role in the
generation of new knowledge which ultimately creates new business opportunities
(Drucker, 1993; Florida, 1999; Leonard-Barton, 1995; Romer, 1993, 1995). This
theory has been useful to highlight the importance of new knowledge and locally
available receptor companies as a driver for commercialization, but it does not
illuminate the way in which such technologies are selected and managed in order to
ensure the effectiveness of that commercialization effort once a decision to transfer
the technology has been made.

2.3.2 The Theory of Cascading Commitment
A few years later, in 1995, another approach was explored to understand
factors that enhance technology commercialization. The theory of Cascading
Commitment described by Large and Belinko (D. W. Large & Belinko, 1995), was

34
concerned with human rather than geographic factors, and in particular, with the role
played by the team members in the technology transfer process. The theory
enunciated by Large and Belinko had a central premise and seven supporting
propositions. The central premise states that: “a successful commercialization team
is built by gaining the commitment of appropriate individuals from appropriate
organizations in a sequential cascading effect, by insightful and customized
solicitation of each new team member to join at the appropriate stage of
commercialization".
The seven propositions supporting this premise are as follows:
1. A complete team of key organizations is required.
2. A complete team of linchpins (those individuals who control the main
resources, money and knowledge) is required.
3. Linchpins must be solicited in an optimal sequence.
4. Linchpins must be solicited at an optimal stage.
5. Full linchpin commitment is required.
6. Diverse determinants of linchpins’ commitment must be present.
7. Linchpin commitment is necessary until launch.
In a follow-up paper, Large and colleagues describe a pilot empirical test that can be
used to test their theory of cascading commitment.
Using data from thirty four technology transfer cases at five Canadian federal
labs they concluded that the qualitative and quantitative results of their study
supported the seven propositions of the Theory of Cascading Commitment (D.

35
Large, Belinko, & Kalligatsi, 2000). However, the paper also pointed out how much
effect the commercialization project selection criteria had on the overall success of
the project.
The theory of Cascading Commitment draws attention to the importance of
adequate champions and teams as part of successful commercial development, but its
focus is relatively narrow. It identifies that linchpin individuals from industry and
academia must interact to ensure efficient and successful commercialization but does
not examine how these individuals organize their efforts.

2.3.3 The Triple Helix Framework
Perhaps the most cited framework that has been used over the last decade to
describe technology transfer system is the Triple Helix model, introduced by
Leydesdorff and Etzkowitz (Leydesdorff & Etzkowitz, 1996). Rather than looking at
the role of university and industry by studying the importance of new knowledge by
itself or the specific roles of individuals and teams, the model examines the potential
importance of high-level relationships and policies developed between universities
and industry. It also adds a third player, the government, to the mix of entities
believed to play a central role in technology commercialization. The studies that
have used the Triple Helix model as a framework have typically probed the relative
roles played by these three entities in determining the way in which university
research is funded, regulated, and transitioned, and the way in which the

36
performance of commercialization efforts are measured. In the original model, each
player was assigned a unique role characterized as follows:
1. Industry: Wealth Generation
2. Academia: Novelty Production
3. Government: Public Control
From the original descriptions of this basic framework, it has been possible to
identify an evolution in roles of all three participants over the last twenty years.
The role of the university has probably evolved the most. Thus it is not
surprising that the literature contains a wealth of studies on the changing role of
universities in the development of national and regional innovation systems
(Etzkowitz, 2002; Feldman & Desrochers, 2003; Goddard & Chatterton, 1999;
Gunasekara, 2006; Leydesdorff & Etzkowitz, 1998; Wong, 2007).
The role of the government seems also to have changed. Originally the
government's role in the triple helix model was primarily characterized in terms of
federal activities and funding opportunities. However, Gunasekara's research has
shown that state and local governments are increasingly proactive in Triple-Helix
dynamics (Gunasekara, 2006).
The Triple Helix model is based on the premise that successful technology
transfer and commercialization depends on the dynamics of interactions and
negotiations among universities, industry and state and regional governments. The
Triple Helix model seems to support the notion that government- university- industry
relationships can have a large influence on the efficient deployment of resources and

37
permit major technology support projects such as science parks and incubator
facilities that rely on the interactions between all three players (Etzkowitz, 2002).
The Triple Helix model is based on the idea of an interactive approach to
innovation with an overlap of interactions and negotiations among local universities,
industry and state and regional governments. A particularly clear example of these
interactions was characterized by Wong (2007), who used the Triple Helix model to
characterize the interactions between government, industry and academia in
promoting new-product development in Singapore. Starting in the late 1990s, the
Singapore government made a decision to advance a program that would make
Singapore into a major life-sciences R&D and industrial hub by systematically
managing the roles of the three players identified by the Triple Helix model.
The program involved efforts to attract new life-sciences companies to
Singapore and to establish new publicly funded research institutions that could
attract researchers from overseas (Finegold, Wong, & Cheah, 2004).
The local universities were also expected to play a major role in this program;
in particular, the National University of Singapore had initiated a plan to become
more entrepreneurial and had identified the life sciences sector as its major focus for
technology commercialization.
The science-driven nature of the biomedical industry, so reliant on
government funding for its success, appears to demand a higher degree of
governmental involvement in comparison to other industries (Cooke, 2003).
However, a review of the literature on the countries with the leading life science

38
clusters also suggests that the following core elements in the Triple Helix model are
key to success (Cooke, 2003, 2004):
1. The presence of cutting edge basic biomedical research by universities
and public research institutes.
2. The emergence of entrepreneurial biotechnology companies in the region
that are willing to commercialize the technologies that come from the
basic research.
3. The availability of seed funding from venture capital and/or industry.
4. The availability of sizable follow-up funding by large healthcare
companies.
It is also interesting to note that advanced research hospitals associated with, or in
close proximity to, the universities have also been seen as important players in the
success of new biotechnology clusters.
The Triple Helix model seems to hold significant promise as a framework for
the kinds of studies proposed here. We are interested in the relative and changing
dynamics between the three players identified by this model. In this particular study
we wish to understand the changing role of the universities as viewed by industry.
To establish a foundation and context for such studies, we first must examine
how these roles are described in current literature. In this review that follows, the
relative roles of government and industry, vis à vis the university, are first examined.

39
2.3.3.1 Government
In the US the federal government plays two major roles, funding and
governance, in the promotion of university healthcare research. The funding aspect is
quite straightforward; governmental bodies such as the National Institutes of Health
(NIH) provide grants to fund research projects. From 1998 to 2003, the budget of the
NIH doubled to nearly $27 billion (NIH, 2010). However, numerous other
governmental agencies also play a role in university health-related funding. The
National Science Foundation, The Department of Defense and the Office of Naval
Research are important sources for research funds directed respectively at
engineering-related development and development useful to military needs. In
addition federal agencies such as the Environmental Protection Agency, the US
Department of Agriculture, and the Centers for Disease Control also offer funding
for research in particular health-related areas. Much of the funding for research from
federal and state agencies has been directed at basic research and so is beyond the
scope of the research described here. However, concern about funding more applied
research that might improve the translation from bench to bedside has been
increasingly a focus for governments and a number of different mechanisms to
accomplish this have been introduced over the past thirty years. More attention is
now being directed towards understanding and maximizing "return on investment"
from government sponsored research, not only by government policy makers but
also by the popular press.

40
A recent article in Newsweek, for example, described how patients and
taxpayers are now more concerned with how many new treatments for disease have
been discovered with NIH funding rather than with its record of discoveries at the
basic science level (Sharon Begley & Carmichael, 2010).
This new level of expectation with regard to government- funded medical
research can be seen in the new "Cures Acceleration Network" that was included in
the Health-Care Reform Bill that came into law in March 2010. This new network
will provide funding, with a first year allocation of $500 million, to biotechnology
companies, academic researchers and advocacy groups to support promising new
discoveries across the so-called "valley of death".
US government has not only been an important source for research funding at
universities, but through its funding policies, an important voice for change. In a
recent speech in Philadelphia (Sept.16, 2009), the current Commissioner of the FDA,
Dr, Margaret Hamburg, pointed to the essential role that regulatory science plays in
the translating biomedical research discoveries to the clinic.
Just as biomedical research has evolved in the past decades, regulatory
science- the science and tools we use to assess and evaluate product safety,
efficacy, potency, quality and performance-- must also evolve…. The goal is
to place emerging, very promising areas in science and technology, such as
genomics and personalized medicine, the development of stem cell therapies
and therapies that harness the power of nanotechnology fully at the service of
public health.

Hamburg then indicated that increased investment in the field of regulatory science
is crucial to boosting sound rule-making in the drug and medical device industry.

41
Our nation has invested billions of dollars in biomedical research, an effort
that's indispensible for medical progress. But this research will not result in
new therapies and cures unless it's married to a robust investment in
regulatory science. We cannot afford to have a muscular investment in
fundamental research and discovery and only a scrawny counterpart in
regulatory capacity (Hamburg, 2009).

Specific initiatives relevant to this study are outlined below. These started with a
clear direction in terms of governance in the form of the Bayh-Dole Act, and were
followed by specific funding initiatives, some of which are summarized briefly
below.

2.3.3.1.1 Bayh-Dole Act
The Bayh-Dole Act, passed in 1980, was considered one of the most
significant governance events to affect the subsequent success of the US in the area
of technology transfer. This Act gave universities ownership of any intellectual
property derived from research that had been funded by federal grants (Mowery, et
al., 1999). It was concrete evidence that the federal government recognized an
important role for universities in the development and commercialization of new
technologies. Throughout much of the nineteenth and twentieth century’s
government support of technology-directed programs could be recognized in the
growth of support for land grant universities. However, until the 1980s, university
research occurred under federal grants without a clear path for the products of the
research to enter the commercialization arena. One disincentive for the development
and commercialization of these new technologies was the ambiguity over the

42
ownership of the technology. The Bayh-Doyle Act formalized university ownership
of the intellectual property derived from research that had been funded by federal
grants.
Since the enactment of the Bayh-Doyle legislation the federal government
has continued to express strong support for the commercialization of university
developed technologies. Two thousand and ten (2010) marks the thirtieth anniversary
of the passing of the Bayh-Boyle Act. To commemorate this anniversary a new web
site was launched (www.B-D30.org). The website included examples of
technologies and products that had originated from federally funded university
discoveries (AUTM, 2010b). The AUTM Report (2010) pointed out that since the
enactment of the Act more than 5,000 new companies were formed around university
research.
In 2008, more than 600 new products that were developed from university-
based technologies were introduced into the marketplace. With respect to medical
products, there have been 153 new medical technologies introduced into the
healthcare marketplace since the Act was introduced in 1980.

2.3.3.1.2 Clinical and Translational Science Awards (CTSA)
Although the government policy makers have been sensitive for many years
to the problems of “bench to bedside” translational research, few tools have been
available to support this transition. One specific initiative created by the National
Institutes of Health (NIH) has specifically focused on how clinical and translational

43
research is conducted. A national consortium of medical research institutions, funded
through Clinical and Translational Science Awards (CTSA), is working to change
the way that translation of biomedical research occurs across the US. Consortium
members are charged with reducing the time it takes for laboratory discoveries to
become treatments for patients by engaging communities in clinical research efforts
and training clinical and translational researchers. When fully implemented in 2012,
about 60 institutions will be linked together.
The formation of these Clinical and Translational Science Institutes (CSTI) is
a good starting point. However CTSIs are primarily directed at facilitating the
clinical trial phases of development and not with the other aspects of development,
such as preclinical research, early manufacturing, and areas where regulatory affairs
may play a role.
The NIH developed the CSTI initiative with the "vision to reduce the time it
takes for laboratory discoveries to become treatments for patients, to engage
communities in clinical research efforts and to train clinical and translational
researchers".
The importance of this attention is reinforced by a 2009 government-
sponsored study looking into biomedical research funding in the US (Dorsey, et al.,
2010):
We spend more on biomedical research than any other country in absolute
terms and very likely in relative terms as well. We spend very little on
whether we are getting these treatments to patients efficiently and caring for
those patients effectively even though these kinds of studies could produce
more positive results than almost any treatment.

44
However, it is important to recognize that this program has its limitations. The total
funding that is sequestered for the CSTI program is substantial, with a budget goal of
$500 million per year (CTSA, 2010). This level of funding is only half of what was
previously identified to be the cost of commercializing a single drug.

2.3.3.1.3 S BIR/ STTR Programs
The US Small Business Administration (SBA) Office of Technology
administers the Small Business Innovation Research (SBIR) Program and the Small
Business Technology Transfer (STTR) Program. Through these two competitive
programs, SBA ensures that the nation's small, high-tech, innovative businesses are
assisted by federal funding.
Eleven federal departments participate in the SBIR program and five
departments participate in the STTR program awarding $2 billion to small high-tech
businesses (NIH-SBIR, 2010).
A new initiative has just been introduced by the SBA, called the SHIFT SBIR
(NIH-SHIFT, 2010). The primary objectives of the SHIFT SBIR initiative are: (1) to
foster research that is translational in nature and (2) to transform academic scientific
discoveries into commercial products and services.
The SHIFT program requires that an investigator who is primarily employed
by a US research institution at the time of application to transition to a Small
Business Concern (SBC) and be primarily employed (more than 50% time)
by the SBC by or at the time of award. A SHIFT SBIR grant enables an SBC
to increase both its scientific research staff and its core competencies. The
Project Director/Principal Investigator (PD/PI) may also facilitate SBC
licensing of intellectual property (IP) from the PD/PI’s prior academic

45
institutions, promote collaboration opportunities with academic investigators,
and enable better access to academic resources. It is important to note that the
authorizing legislation for the SBIR program (Small Business Innovation
Development Act of 1982) provides for retention by an SBC of the rights to
data generated by the SBC in the performance of an SBIR award. (NIH-
SHIFT, 2010)

2.3.3.1.4 Cures Acceleration Network (CAN)
During the debate on the new Health-Care Reform Act, Senator Arlen
Specter introduced legislation to transform medical research by creating the Cures
Acceleration Network (“CAN”). The mission of this new institution is to speed up
the process of turning government funded medical research into treatments that can
benefit patients in the US (Cure, 2010).
This idea of "Centers for Cures" at the NIH was first brought forward by
Richard Boxer, a urologist at the University of Miami, and Lou Weisbach, a Chicago
entrepreneur (S. Begley, 2008).
Their vision for these "Centers" were “physical entities that would house
multidisciplinary teams of biologists, chemists, technicians and others who would
take a discovery and nurture it along to the point where a company is willing to put
up the hundreds of millions of dollars to test it in patients”. However, many
researchers are wary of using NIH money for a new center for cures; they worry that
it would divert dwindling funds from basic research which in fact might be the basis
for those hoped-for cures (S. Begley, 2008). The funding would be available to
biotech and pharmaceutical companies, and patient advocacy groups in addition to
universities and other traditional research institutions.

46
Key features of the CAN Act include (Cure, 2010):
1. A $2billion independent agency, providing funds to translate research
discoveries from the bench to the bedside.
2. Awards outside of traditional funding streams, to accelerate the
development of cures and treatments including, but not limited, to drugs,
devices, and behavioural therapies.
3. Flexible and expedited review process to get monies into the hands of the
grantees as quickly as possible. These funds will complement the NIH,
not compete or take funds from the NIH.
4. Two types of grant awards, each authorized at $1 billion in the first fiscal
year.
5. Funds to applicants who do not have access to private matching funds and
the Cures Acceleration Partnership Awards, requiring a match of three
federal dollars to one grantee dollar.
An interesting requirement for these grants is the specification of protocols
appropriate for regulatory approvals at all stages of development. This is a high
hurdle for any organization but particularly for universities.

2.3.3.1.5 Joint NIH-FDA Leadership Council
In February of 2010 the FDA and the NIH announced an new initiative
designed to speed up the process of facilitating the translation of new medical
technologies to patients (NIH-News, 2010): "This collaboration… is the first of its

47
kind and will use the NIH’s breadth of experience as a leader in biomedical sciences
to help make the translation of biomedical discoveries into effective treatments as
seamless as possible." (NIH Director Francis S. Collins, M.D., Ph.D.)
The initiative involves the scientific disciplines of translational science and
regulatory science. As part of the effort, the agencies will establish a Joint NIH-FDA
Leadership Council to spearhead collaborative work on important public health
issues. The role of the Leadership Council is to ensure that regulatory considerations
are integrated into all research and development planning. The Council will also look
at ways to make sure that the latest science, especially in the case of “first in class”
products, is used to direct the regulatory review process.
In addition, the NIH and the FDA will jointly issue a Request for
Applications, making $6.75 million dollars available over three years for work in
regulatory science. Quotes from the individuals participating in this Leadership
Council reinforce the views of the Council regarding the importance of this work to
drive commercialization:
We've all been following the remarkable advances in biomedical sciences led
by the NIH with great enthusiasm for years. However, much more can be
done to speed the progress from new scientific discoveries to treatments for
patients. Collaboration between NIH and FDA, including support for
regulatory science, will go a long way to foster access to the safest and most
effective therapies for the American people. (HHS Secretary Kathleen
Sebelius)

The FDA plays an essential and unique role in how therapies are evaluated.
We are the bridge between biomedical research discoveries and new medical
products. We now have a special opportunity—and responsibility—to
harness advances in science and technology to support our efforts. We are
working in collaboration with the best minds and research institutions

48
available, so that we can better develop and utilize new tools, standards and
approaches needed to properly assess the safety, effectiveness and quality of
products currently in development or already on the market. (Margaret A.
Hamburg, M.D., Commissioner of Food and Drugs)

2.3.3.1.6 National Center for the Advancement of Translational Science
(NCATS)
The formation of the National Center for the Advancement of Translational
Science (NCATS) was one of the recommendations that came out of the 2010 NIH
Scientific Management Review Boards Report on Translational Medicine and
Therapeutics (Board, 2010). The Mission Statement of NCATS is “To advance the
discipline of translational science and catalyze the development and testing of novel
diagnostics and therapeutics across a wide range of human diseases and conditions”.
NCATS functions:
1. To improve the processes in the therapeutics development pipeline by:
• Experimenting with innovative approaches along the pipeline
through an open access model
• Choosing compelling therapeutic projects that can serve to
evaluate those novel methods as they move through the pipeline
• Promoting and facilitating interactions with regulatory agencies to
advance the field of regulatory science
2. To catalyze the development of novel diagnostics and therapeutics by:
• Facilitating and supporting partnerships and collaborations across
all sectors

49
• Providing resources to enhance and enable the development of
therapeutics
• Enhancing training in disciplines that are relevant to translational
sciences
During a Faster Cures Webinar in March, 2011 (Cures, 2011b), NIH Director
Frances Collin was asked if the NIH would actually take a new drug through the
entire development cycle and his response was:
NIH would push it far enough along then to make it commercially attractive
then figure out how to “pass the baton”. This would include, if NIH has done
a lot of work, shared royalties so the public is reimbursed for the public’s
efforts to create this opportunity. So this would not be worlds in collision
with the private sector it will have to be worlds in collusion. Five to six years
ago this type of model wouldn’t have been seen as not so attractive to the
private sector but as NIH has been gaining in credibility from the preliminary
steps that have been conducted so far and as the opportunity for new targets
to be tackled successfully have been growing well beyond the capacity of the
private sector to take care of themselves; I think the interest in this type of
partnership is now very high.

With respect to concerns that this new NCATS initiative will reduce the NIH funds
for basic research Collins stated:
...the resources that are going into NCATS, as of October 1(2012), are all
programs that are already funded, they are in different parts of NIH, we are
bringing them together in a collective way. The only new funds that we see
NCATS might be able to receive are the Cures Acceleration Network 100
million dollars that is in the president’s budget. (Cures, 2011b)

2.3.3.2 Industry
The traditional role of industry, as defined by the Triple Helix model, is
“wealth generation”. However “wealth generation”, at least for medical products

50
industries, is typically preceded by many years of wealth investment at the
development phase that must later be recouped if the company is to be profitable. To
develop a new drug, for example, Guarino (2007) identifies 127 separate types of
activities that in themselves may contain several different sub-activities as part of the
development path (Appendix A). These activities range from synthesis and analytic
and stability testing, to animal studies to evaluate safety and efficacy, to clinical
studies, to formulation and manufacturability.
Inspection of this list amply illustrates why drug device development can be
such a demanding, costly and risky undertaking.
By the early 1990s when the Triple Helix model was first promulgated,
strains were already appearing in the ability of many innovative companies to
compete successfully in the manner that had been typical in the 1980s. On one hand,
new medical products were becoming much more expensive to develop. By the early
2000s, for example, the cost of new drug development was estimated to be
approximately $800 million (DiMasi et al., 2003; Adams, 2006). To cope with rising
costs and risks of product failure in the marketplace, an unusually high number of
mergers took place in the 1990s. It was reflected in the market share of the top 10
pharmaceutical firms, which rose from 20% in 1985 to 48% in 2002 (Dazon, et al.,
2007). Such consolidations were required to increase the size and investment
capabilities of companies.
On the other hand, it also became harder for industry to recoup their
investment costs back through product sales.

51
In 1984, legislation had been introduced to provide a simpler approval path
for generic drugs. The Drug Price Competition and Patent Term Restoration Act, or
Hatch-Waxman Act (21 USC 355), opened the door to a significant change in the
competitive landscape for innovator pharmaceutical companies. Initially these
competitors were cautious about challenging innovator companies with regard to
commercialization and were content to wait for patents on products to run out prior
to submission for their generic approvals. However, a clause in the Hatch-Waxman
Act rewarded generic entrants who entered the market early by invalidating the
patent of a pioneer company. This clause was increasingly seen by the generic
companies as a source for huge profit, and the larger generic companies hired
divisions of patent lawyers who could identify problems in the patents of the
innovator companies. Thus the market share of generics began to rise sharply in the
later 1990s.
At the same time, other innovative companies put pressure on the exclusivity
of the pioneer company in a second way. By developing follow-on drugs that were
only modestly different structurally from the pioneer drug to treat the same
condition, treatment options were introduced earlier and diluted the exclusivity of the
first-in-class product.
All of these pressures that began in the 1990s accelerated at the change of the
millennium. To cope with rising costs, many US based healthcare companies, most
notably large pharmaceutical companies with the largest research budgets, continue
to cut research and development (R&D) staff.

52
AstraZeneca announces it would continue cutting jobs by eliminating another
10,400 by 2014, or about 16% of its workforce, including thousands in its
research and development group. About 3,500 R&D jobs will be cut in the
process, the company said, adding that it intends to keep increasing
investment in drug research happening outside of the company. (Wall Street
Journal, January 28, 2010)

The strategy announced by Astra Zeneca is not unique. It parallels similar cost-
cutting measures at Glaxo Smith Kline PLC and reflects and industry trend to reduce
research spending (Whalen & Stovall, 2010). These pressures forced internal R&D
divisions to justify their existence, often unsuccessfully. Instead, companies looked
to outside biotechnology firms and academic groups for new experimental drugs to
buy and develop.
The new model of purchasing pipeline products rather than developing them
internally should at first glance seem to provide a windfall to universities where
those new ideas are being developed. However, this opportunity is not as promising
as it might seem since companies also tend to delay the point at which they wish to
acquire the new technologies. Large companies with obligations to stockholders and
quarterly business targets have been reluctant to invest in early stage discoveries.
The preference has been to acquire these technologies at the point where they
have entered clinical trials and have already even demonstrated proof of safety and
efficacy, at least in small patient numbers. A “valley of death” can exist for new
products between the time that they are prototyped or formulated and the time when
they are identified as targets by large companies (S. Begley, 2008; Sharon Begley &
Carmichael, 2010).

53
Further, studies by Price-Waterhouse-Coopers and the National Venture
Capital Association (Price-Waterhouse-Coopers & NVCA, 2007) and Venture One
(VentureOne, 2006) have shown that angel investors and venture capitalists, often
the first investors to support products in early stage development, are also waiting
until the later stages to invest in university based technologies. Thus, researchers are
finding it more and more difficult to secure early stage funding to develop their
technologies.
The moves by industry to reduce R&D expenditures imply that they are
making significant assumptions about product availability at the stage at which they
wish to acquire new technologies. First is the assumption that large numbers of
untapped discoveries in universities and small start-up companies are waiting to be
exploited, and second, is the assumption that those discoveries will be developed to a
stage that minimizes risk to the acquirer, past the “valley of death”. If large
companies assume that small start-up companies will first take responsibility for
product development to bridge the “valley of death”, then the models for small
company development will be critical to the new economic reality. If in turn small
companies rely on the university to bring products further down the developmental
path to minimize their business risk and developmental costs, then we must try to
understand what expectations both large and small companies have for the roles of
the university. One way to probe this question is to ask directly what some of these
industry players expect from universities.

54
A recent step in this direction has been taken by the USC Stevens Institute for
Innovation at the University of Southern California in 2009. The Stevens Institute
conducted ninety-four in-depth interviews with geographically and commercially
diverse venture capitalists to better understand the relationship between the academic
and venture capital communities: what motivates the various stakeholders, what they
see as the most pressing problems facing university–venture relations, and what can
be done to improve the process for everyone involved (Holly, 2009).
The study uncovered five key factors that required attention from the
university: (1) understanding investor motivations, (2) supporting entrepreneurs, (3)
streamlining bureaucracy, (4) improving access and visibility, and (5) fostering a
culture of innovation on campus. These five key factors can act as benchmarks for
universities to evaluate their interactions with venture capital companies.
However, to our knowledge such questions have not been posed
systematically to medical device or pharmaceutical companies interested in acquiring
new medical products at the pre-commercial stage.

2.3.3.3 Academia
The role of the university is defined traditionally by the Triple Helix model as
“novelty generation”. It is still the case that many of the medical technologies
developed at universities are novel, and would be considered as "first in class"
products. Such products are often valuable from a commercial viewpoint because
they targeted unmet therapeutic needs where markets can be large and relatively

55
price-insensitive. The expertise associated with these novel products typically lies
within the researchers who developed the technology, so that the further
development can be enhanced by the continued participation of the researcher in the
development process. However, in many cases, the scientists and engineers who are
skilled at discovery are not well-prepared or interested for developmental work that
requires different tools and business approaches.
Healthcare products and services are arguably the most difficult technologies
commercialize because of the level of regulatory scrutiny that that they must undergo
before gaining market approval. Any start-up company faces innumerable
challenges, but these challenges increase when products have high-risk outcomes
such as patient injury, and long developmental paths dictated by regulatory, quality
and reimbursement considerations. The opinion has been expressed that universities
lack the industry experience and the product knowledge that is required to be
successful in the commercial realm. Further, each product discovered by a scientist
typically poses a unique set of developmental and funding challenges.
Expertise in that product type may be impossible to acquire elsewhere and
the level and type of support required by associated spin off companies is to some
degree specific to the new technology. Thus developmental activities are fraught
with unexpected difficulties. It is not uncommon to find that many new healthcare
technologies which could benefit society have been relegated to the shelves in
university labs (S. Begley, 2008; Sharon Begley & Carmichael, 2010).

56
Nevertheless, many examples of successful university spin off companies
exist in the health-care technology sector, and in some cases the success of these spin
offs may be directly attributed to the support that they were given by their respective
universities. What differentiates a well-prepared university and one that in fact may
impede product commercialization has recently been an important area of study. In
the 1990s, most universities put into place Technology Transfer Offices that took
responsibility for managing intellectual property developed by researchers employed
by the university. However, it has only been recently that a few universities have
taken ventures beyond this stage by developing ancillary support systems-
incubators, regulatory support offices, clinical trial consulting or management
services and even good manufacturing laboratories. Further, universities approaches
to such activities are to a large degree ad hoc and experimental.
Thus many questions can be posed about what would constitute a successful
support system for technology development in a university. What current medical
technology commercialization models exist at universities around the globe? Are
some models better than others? How is the success of these models measured?
Which universities are considered to be leaders in commercializing medical
technologies and why?
It is not yet clear to what extent expensive investments in these kinds of
support services will translate into useful commercial outcomes given the complexity
and unique nature of the many types of products with which a university potentially
could have to deal.

57
Support comes in many forms, from financial support, to technical support, to
the use of lab space and incubator facilities. Every new commercialization project
may require a unique mix of support services.
Although many specific questions about the usefulness and success of
different forms of university support remain to be analyzed fully, certain key
practical questions remain. What are current and best practices for the support of
potential technology commercialization projects in the university? In order to
develop this question further, the descriptions below evaluate some of the past and
current activities that have been undertaken in universities and their affiliated
partners.

2.4 Technology Transfer Activities in the US
2.4.1 Introduction
The expansion of research and development in the life sciences has boosted
the number of research universities that profit from the commercial success of their
products. Today, about 70% of all technology royalties earned by universities come
from the life sciences, with the remainder mainly derived from the physical sciences,
including engineering (Mowery, et al., 1999).
“Technology transfer” in some measure depends on technology licensing, in
which products are commercialized by an outside entity that pays ongoing fees under
some form of legal agreement for use of the idea or product. However, as
universities and researchers become more sophisticated not only in the research

58
aspects of R&D, but in the developmental aspects as well, they have begun to
recognize that the management of intellectual property is only one aspect of product
commercialization.
The concept of technology transfer has become broader to include all aspects
of activity underlying the ultimate commercialization and societal adoption of new
technologies developed at the university.
The concept of Technology Transfer was first introduced at the University of
Wisconsin at Madison in 1925. However, most of the other universities in the US
did not follow suit until the 1970s (Slaughter & Leslie, 1997). Today, Technology
Transfer Offices have become the hub for a variety of activities apart from patent
and licensing management. In addition universities are experimenting with new
models for technology development and transfer.
In part these initiatives may come from a Technology Transfer Offices have
not been as effective as possible for ensuring translational activities. Technology
Transfer Offices have done much to educate researchers about the challenges of
intellectual property protection and product development. However, most papers
generated to analyze the effectiveness of technology transfer activities are written by
professionals working in the Technology Transfer Offices, and so may not provide
an unbiased view of the effectiveness of activities, that are often regarded in a
positive light. More anecdotal feedback from researchers and venture capitalists
seems to suggest concern about the effectiveness and breadth of these activities in at
least some institutions.

59
The evaluation is complicated by the fact that universities differ greatly in
their expectations of their Technology Transfer Offices. A 2001 study of
Technology Transfer Offices at sixty two major US Universities found that
objectives in the licensing process differ from one university to another, but typically
is focused on the amount of royalties and fees generated rather than the number of
commercial products eventually produced (Thursby, Jensen, & Thursby, 2001).
A very interesting observation from a more recent study of Technology
Transfer Offices in the US (Jensen, Thursby, & Thursby, 2003), was that many of
the directors of the Technology Transfer Offices included in the study believed that
less than half of the potential commercial products were actually disclosed to their
offices by the researchers involved.

2.4.2 Types of Commercial Partnerships
Universities have a difficult challenge to advance new technologies alone. In
a 2007 Business Week article that dealt with the University of Florida's rise in the
ranks of technology transfer universities, the author points out that American
institutions of higher education are still struggling to turn ideas into cash (Arndt,
2007). From 2000-2005 university research funding jumped nearly 45% while
money earned from license fees to universities rose at only half that pace over that
same period.
Half of the universities in the survey on which the article was based reported
that they employed fewer than six people in their technology transfer units. Thus

60
universities have often looked for way to develop partnerships outside of the
universities to enhance developmental activities.
There are basically two types of commercialization projects that occur within
a government or university lab (D. W. Large & Belinko, 1995).
1. Commercialization that is “pushed” out of the research environment by
the researcher and/or the administration.
2. Commercialization that is “pulled” by an outside entity, most commonly
a company, wishing to commercialize or otherwise use the technology.
Typically these two types of commercialization have not been differentiated, but
some studies suggest that they differ in their paths and success rates. Large and
colleagues, for example, concluded that projects in which industry exercised “pull”
by early involvement through either industry developed or jointly conceived
technology, experienced higher success ratings than projects with lab-conceived
technology (D. Large, et al., 2000).

2.4.2.1 Licensing/Material Transfer Agreements
One of the most common ways in which universities and industry work
together is through the transfer of rights over the use of products. Licensing
is often the first choice for the flow of new technology from the university to
industry. By giving a license for a new technology to a commercial entity,
the university essentially “transfers” the use of that invention either
exclusively or nonexclusively for stipulated periods of time and areas of use.
The movement of a new technology from industry to academia also can
occur, typically when a prototype or new drug product is given to a university
researcher for investigational purposes.

61
Such transfers are covered by material transfer agreements, “for use in
research that is not funded by the for-profit entity. (Annotation from the
Institute of Medicine (IOM) Material Transfer Agreement)

In the past, the use of licenses and technology transfer agreements has often
been problematic because inexperienced individuals often failed to specify important
elements of the contracts that raised concerns later in development. However, in
2005 and 2006 the Institute of Medicine's Forum on Drug Discovery, Development,
and Translation brought together representatives from academic research centers and
the biopharmaceutical industry to reach agreement on templates for material transfer
agreements and clinical trial agreements (Snipes, 2006).
This is a significant step because it not only provides guidance on a very
important part of the technology transfer process but gives an example of effective
shared efforts by industry and academic researchers to work together and understand
the needs and pressures of the other party. The final template developed by these
interactions was comprehensive. It included sections on the transfer of materials,
intellectual property rights, confidentiality, publications, indemnities and insurance,
terms and termination clauses, as well as miscellaneous provisions.

2.4.2.2 Proof of Concept Units
"Proof of Concept Centers" are a relatively new approach taken by US
universities In their paper entitled "Proof of Concept Centers: Accelerating the
Commercialization of University Innovation", Gulbranson and Audretsch provide
insight into how these Proof of Concept Centers work by looking at both the

62
Deshpande Center at the Massachusetts Institute of Technology (MIT) and the Von
Liebig Center at the University of California at San Diego (UCSD) (Gulbranson &
Audretsch, 2008). In both cases, these Proof of Concept Centers were put in place
by their respective universities to address the funding gap for seed investment.
As is the case with most incubator facilities, no shared lab space is promised
in these Proof of Concept Centers; the researchers whose projects are chosen to be
included in the Centers still continue to do their research in their own labs.
The Von Liebig Center at UCSD was started in 2001 with a $10 million gift
from the William Von Liebig Foundation to the Jacobs School of Engineering. The
mission statement for the Center is: “to accelerate the commercialization of UCSD
innovations into the marketplace, foster and facilitate the exchange of ideas between
the University and Industry, and prepare engineering students for the entrepreneurial
workplace".
To meet their objectives the Center provides three types of services (i) seed
funding (ii) advisory services and (iii) educational programs. The Center provides
seed funding in the range of $15,000 to $75,000 and typically funds ten to twelve
projects each year. Potential projects are assessed by a 5-8 member review panel
made up of both university and industry representatives. The criteria for inclusion
into the Center include the technology's novelty and need, the potential market size,
the market definition, the technology's maturity, the utility of the grant, the
intellectual property position and the credibility of the principal investigators
(Gulbranson & Audretsch, 2008).

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The Deshpande Center at MIT was started in 2002 with a $17.5 million
donation to the MIT School of Engineering. The Deshpande Center provides two
types of grants to support promising new technologies: (i) Ignition grants (up to
$50,000) that can be used for exploratory experiments and proof of concept studies
and (ii) Innovation Grants (up to $250,000) which are used to fully develop the
technology. Innovation Grants are only awarded to projects where proof of concept
has been proven and researchers have developed a clear R&D and Intellectual
Property plan.
By funding the development of these new technologies the Center aims to
make research projects more attractive to outside investment by venture capital
companies and industry (Gulbranson & Audretsch, 2008).

2.4.2.3 Incubators
The role of most business incubators is to support start-up companies so that
they have a better chance of survival. This support normally may include shared
facilities and equipment, low cost lease rates, shared administrative functions to
reduce overhead, business planning and technical assistance and marketing and legal
consultation.
The incubator model has been adapted to meet a variety of needs, from
fostering commercialization of university technologies to increasing employment in
economically distressed communities to serving as an investment vehicle.

64
The Batavia Industrial Center, commonly regarded as the first US business
incubator, opened in Batavia, N.Y., in 1959, but the concept of providing business
assistance services to early-stage companies in shared facilities did not catch on with
many communities until at least the late 1970s. As of October 2006, there were over
1,400 incubators in North America, up from only 12 in 1980. Of those, 1,115 were in
the United States, 191 were in Mexico and 120 were in Canada (NBIA, 2010).
According to the National Business Incubator Association (NBIA), most North
American business incubators (about 94%) are nonprofit organizations focused on
economic development. Only six percent of North American incubators are for-profit
entities.
In 2004 a group of researchers compared the number of start-up companies
that successfully graduated from three major types of incubators in the US: (i) Non-
Profit, (ii) For-Profit and (iii) University Based (Peters, Rice, & Sundararajan, 2004).
The results of their survey showed that the non-profit incubators had the
highest success rate (based on graduating from the incubator facility), followed by
university and then for-profit incubators. The research also showed that the success
of the different types of incubators related mostly to the presence or absence of
coaching and access to networks of specialized companies.

2.4.2.4 Industry-University Cooperative Research Centers
Industry-University Cooperative Research Centers are typically based on the
premise that the industrial partner will provide funding for specific types of research

65
projects in return for the "right of first refusal" over any new technologies that are
developed in the Centers.
An example of this type of relationship is the BASF Advanced Research
Initiative at Harvard University. In 2007, Harvard and BASF announced that BASF
would be investing $20 million, over five years, to "foster a vibrant and dynamic
intellectual exchange" between the University and BASF.
The $20 million would be used to fund proof-of-concept projects that had
been developed in the School of Engineering and Applied Sciences. In return for
their investment, BASF had the right to first refusal for any projects that they
deemed had commercial potential (Roush, 2007).

2.4.2.5 Technology Transfer Assistance (TTA) Boards
A Technology Transfer Assistance Board is a body that receives technology
transfer assistance requests from private sector firms. The Board uses a problem
statement from the private firm to determine the appropriate group that would most
likely to be able to provide the appropriate solution. The Regional Technology
Applications Board at NASA's Marshall Space Flight Center is an example of one of
these TTA boards (Harper & Rainer, 2000). The Regional Technology Applications
Board reviews the problem statements that it receives from the private sector then
makes a decision as to which of its centers is most likely to come up with a solution
for the client.

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To date, the Marshall Space Flight Center Technology Transfer Office has
responded to over 8,000 requests for assistance from the local industry.

2.4.2.6 Disease Foundations
In the past, disease-focused foundations were typically fund-raising
organizations that provided money for research and health-care assistance to
individuals with a condition targeted by the foundation. However, in the last few
years, the mandates of these organizations have in some instances expanded to
include proactive technology development in an attempt to facilitate the translation
of medical products of value to their areas of special interest. A particularly
interesting example is the Myelin Repair Foundation, which funds research on
treatments for multiple sclerosis. This Foundation actively manages the five
scientists at five universities handpicked by founder Scott Johnson, requiring them to
share data almost as fast as they collect it, mandating collaboration and pushing
discoveries through the valley of death (S. Begley, 2008).
Contractors are hired to develop ways to scale up a discovery of turn stem
cells into myelin-making cells that could help MS patients. The Michael J. Fox
Foundation for Parkinson's Research is another example of a private group that
closely manages and directs their scientists during the discovery stages then
continues to work with them through the development cycle (Sharon Begley &
Carmichael, 2010).

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2.4.2.7 Accelerator Funds
In 2007 Harvard University started its own funding body targeted, called the
Technology Development Fund, with an initial $6 million in private donations, to
develop biomedical products. The overall plan at the time was to raise a total of $10
million from private donations and eventually, make the fund self sustaining. The
goal of the fund was "to provide Harvard Scientists with the financial resources
needed to traverse the development gap and generate the confirmatory data required
to attract commercial partners" (Buderi, 2008).
In its first year the fund invested $1.3 million in six projects which included
technologies that dealt with cancer, HIV and diabetes. These Accelerator funds look
and behave very much like Venture Capital funds. However, a significant difference
is that individuals providing the private donations do not have an expectation of
return on their investments.

2.4.2.8 Research Parks
Research parks are large multi-partnered efforts to enhance “Knowledge
Spillovers” between universities and tenant firms, in order to enhance regional
economic growth (Link, 2002). A university research park is defined as
...a cluster of technology based organizations that locate on or near a
university campus in order to benefit from the university’s knowledge base
and ongoing research. The university not only transfers knowledge but
expects to develop knowledge more effectively given the association with the
tenants in the research park". (Link & Scott, 2005)

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In cases where the park is on or adjacent to a university campus, the
university normally owns the land and either oversees, or at least advises on, aspects
of the activities that take place in the park as well as on the strategic direction of the
park’s growth. When the park is located off campus, the park land is normally owned
by a private venture, often with state or regional government assistance. In this
instance the university has typically contributed financial capital to the formation of
the park so that some form of some type of administrative relationship exists
between the university and the research park (Link & Scott, 2005). Based on
information from the National Science Foundation's Database there were eighty-one
such university research parks in the US formed from 1950 to 2002.

Figure 7: Population of University Research Parks in the US by Year Founded
(1951-2002)

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2.4.2.9 Spin-off Companies
Licensing has traditionally been the dominant route for the commercialization
of public sector intellectual property. However, the formation of university-based
spin-off companies constitutes a potentially important technology transfer option
(Siegel, D, & Link, 2003). The spin-off company typically relies not only on limited
funding from investors of various types, but also on small business development
grants and tax incentives to provide the resources needed for product development.
Most spin-off companies have a limited lifespan, that ends either when the products
can find no commercial route for success or when it is acquired by a larger company
that sees value in the commercial potential of its products. A study recently
published in the Journal of Technology Transfer showed that over 38% of the
university spin-offs in the US were in the medical products field; the second leading
area of spin-offs was Software at 26% (Zhang, 2009).
In a paper entitled “Entrepreneurial Orientation, Technology Transfer and
Spin-off Performance of US Universities” O’Shea and colleagues (O'Shea, Allen,
Chevalier, & Roche, 2005) used literature and data from 1980 to 2001 to determine
why some universities were more successful than others when it came to generating
Spin-off companies. They suggested that success in spin-off activity was related to:
(i) incentive structures to reward academic entrepreneurial endeavors, (ii)
decentralized operating structures to provide greater autonomy to research teams and
(iii) a centralized staff of experienced technology transfer personnel.

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2.4.3 Metrics Used to Measure the Success of University Technology Transfer
One of the most challenging problems in understanding the success of
technology transfer is identifying appropriate ways to measure success and
satisfaction.
One organization that has been particularly concerned with this challenge is
the Association of Technology Managers (AUTM), a global network of more than
3,500 technology transfer professionals who work in academic, research,
government, legal and commercial settings. The AUTM US Licensing Activity Survey
Summary: FY2008 (See Appendix B) is perhaps the most comprehensive report of
how technology transfer professionals assist researchers in bringing new products
and services to market (AUTM, 2010b). Excerpts from this survey suggest a very
active translational environment. It identifies that 648 new commercial products
were introduced, 5,039 total license and options were executed, 595 new companies
were formed, and 20,115 patent disclosures were made in 2008. It also identifies
that more than $50 billion was invested as sponsored research. What is more
difficult to assess is the impact of this investment on the economy. Further it is
difficult with this instrument to compare US activity in the translational arena with
that of other countries.
To provide some insight into this comparison, researchers from the
University of Boston, the University of Glasgow and Croft Intellectual Property in
Australia have developed a bench marking methodology called “Purchasing Power
Parity Adjusted Total Research Expenditures”, or ATRE, which allows researchers

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to make quantitative comparisons between the practice of technology transfer in
different countries (Hofmann, Cullen, Croft, & Stevens, 2001) (See Appendix C).
The metrics that they included were broken into three main categories: investment in
Technology Transfer (research expenditures, staffing and legal expenses);
technology transfer inputs (invention disclosures, patent applications and patents
issued); and technology transfer outputs (licenses/options executed, licensing
income, start-ups, licenses with equity and equity liquidation). A group of
researchers at United Nations University in the Netherlands have set out to develop a
set of internationally comparable indicators to look at how the success of university
commercialization differs from country to country (Arundel & Bordoy, 2010). The
authors believe that such comparisons should be possible of minor changes are made
to the existing survey instruments being used in the US and Europe.
They suggest adding new indicators: who is licensing the technology from
universities, what is the extent of licensing exclusivity, what percentage of patents
have been licensed at a given university and what differentiation is seen between the
number of licenses and license income that comes from patented versus non-patented
technologies.

2.5 Summary and Research Direction
In an attempt to commercialize new technologies developed by their
researchers, US universities have implemented or participated in a number of
different approaches including university support services, licensing offices, Proof of

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Concept centers, incubators, industry-university research centers, technology transfer
assistance boards, disease foundations, accelerator funds and spin-off companies.
However, there is little systematic work that addresses which of these
approaches, or combinations of approaches might be considered as "best practices".
A useful definition of best practices was defined by Chevron as "any practice,
knowledge, know-how, or experience that has been proven to be valuable or
effective in one organization that may have applicability to other organization"
(O'Dell & Grayson, 1998).
Benchmarking builds on knowledge of best practices. It is the process of
identifying, understanding and adapting outstanding practices from a range of
organizations. Benchmarking teams act by assessing the current state of operations
with regard to a particular process or area, identifying gaps and problems, and then
searching for best practices outside of the organization (O'Dell & Grayson, 1998).
As described in the Triple Helix framework, the three key players in the
commercialization of university technologies are academia, industry and
government. Therefore, the best way to understand what constitutes a “best
practices” model is to get feedback from these players. In this particular research
project work will be directed at analyzing one relationship of the Triple Helix model,
the university-industry relationship, from the viewpoint of the industry sector.
Other than the report entitled "Working Together, Creating Knowledge: The
University-Industry Research Collaboration Initiative" (Forum, 2001), which looked
at how the industry and universities, in general, should work together little literature

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has been published on this relationship. When asked why this was the case,
representatives from a number of university Technology Transfer Offices speculated
that these discussions with respect to university-industry interfaces were one-off type
negotiations between individual companies and the research institutions with whom
they worked.
There are many methods, both quantitative and qualitative, that researchers
can use to study the state of a system and to suggest ways to improve practice.
In this study, we are particularly interested in the perceptions of industry with
regard to the activities and attitudes that they have encountered in their interactions
with universities. If we can gain insight into the types of issues that industry
believes to be important with respect to the relationship between universities and
industry, we can contribute to the development of benchmarks that will aid
universities to assess their current practices.
By comparing their current practices with the information obtained from the
industry sector, universities will be better able to perform a gap analysis to determine
what, if any, gaps need to be addressed in order for them to attract more involvement
from the industry.
One of the drivers for the research outlined here is the change in emphasis
that industry seems to be placing from in-house to outsourced innovation. The task
of finding these new products falls under the mandate of what is normally called
Business Development in most companies. These individuals must search for and
assess new medical technologies that could potentially be added to the company’s

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development pipeline. Thus, business development officers in companies might be
optimally placed to assist in understanding the view of industry with regard to
university interactions in the technology transfer process.
In this study, we will use a mixed –methods approach with surveys and
interviews to examine the views held by industry, as seen through the eyes of its
business development staff, with regard to the technology transfer processes that are
in place and active at the universities with which they deal.

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CHAPTER 3
METHODOLOGY
3.1 Introduction
This exploratory study used focus-group and on-line survey methods to
explore the views of business development experts in medical products companies.
The survey took as its starting point a previous study by the University of Southern
California Stevens Institute for Innovation (Appendix D) that explored the views of
venture capital thought leaders regarding their experiences with university
interactions (Holly, 2009). In that study, a semi-structured interview procedure was
based on a set of questions to which we have access (Appendix E). Survey
development was then guided by evidence gained from current literature and
informal discussions with a small group of individuals with interests and experience
in technology transfer. Content validity was tested by convening a focus group to
critique the survey. The survey was then fine-tuned on the basis of input from the
focus group and administered to a sample of business development managers of 80
medical products companies, including at least 20 pharmaceutical and 20 medical
device companies.

3.2 Development of Initial Survey
The initial survey was prepared using the web-base survey tool, Qualtrics
(http://www.qualtrics.com/). A first set of questions was developed in consultation
with a small number of academic associates who have experience in technology

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transfer and start-up company development. The questions covered the following
topic areas:
• What do the industry representatives think about the way that US
universities work to commercialize medical technologies?
• Do the industry representatives believe that there is a need for change?
• What, if anything do they think is missing?
• Are there elements in current procedures that are impediments to
university-industry interaction?
• Can the industry representatives provide examples of universities that are
particularly effective at technology transfer, either in the US or globally?
Why do they feel that the university is particularly effective?
A focus group was be convened to review and provide input with respect to the
survey questions to be included in the final survey instrument. This group was
heterogeneous with respect to the specific backgrounds of the individuals recruited
into the focus group (Table 2).
The focus group was scheduled for ninety minutes. All of the members
agreed that the proceedings could be captured by video.
The group was given the draft survey in advance of the meeting and given
paper copies on the day of the focus group. Prior to the meeting, refreshments were
offered, introductions were made and the participants were given fifteen minutes to
eat, chat and reread the proposed questions.

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Table 2: Participants in Focus Group

No. Description of Participants
1 Individual with Business Development experience in the Pharmaceutical
Industry
2 Individual with Business Development experience in the Device Industry
3 Individual with Technology Transfer experience
4 Second individual with Technology Transfer experience
5 University researcher in the pharmaceutical area
6 University researcher in the medical device area
7 Individual with industry experience in the development of pharmaceuticals
8 Individual with industry experience in the development of medical devices

The proceedings started with a short presentation by the moderator (MJ)
regarding the purpose of the research and the survey. General questions regarding
the proceedings were discussed. The group moderator then initiated a discussion
about the value and improvements needed for the proposed questions. Time was
managed to ensure the opportunity for more general feedback at the end of the
session when the group share general comments regarding the overall survey
questions and the methods being used. The survey was then modified according to
the advice received from the focus group members.
The final survey was configured on the web-based survey platform. The
effective operation of the system was validated by sending the survey to 10
participants or instructors in the doctoral program, to ensure that the emails arrived
properly and the answers could be returned and analyzed appropriately.

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3.3 Survey Deployment and Analysis
The target populations for this survey were senior managers (Director level or
higher) from Business Development groups of both Pharmaceutical and Medical
Device Companies with previous experience working with universities. These
individuals were screened by phone or email to identify their willingness to receive
the survey, and to clarify that they meet the criteria for inclusion into the surveyed
population.
The survey was then distributed to 80 Business Development professionals
from the medical device industry and the pharmaceutical industry who agreed to
participate.
No remuneration was required to encourage participation. However, two
staged reminders were used to encourage the return of the surveys after 30 days.
The survey tool was broken down into six (6) main sections; (1) General
information about the respondent, (2) Overall capabilities of the universities with
which they have had experience, (3) Nature of interactions with US universities, (4)
Trends in industry interactions with US universities, (5) Universities in US that are
considered to be “Star performers” and (6) Opinions of respondents regarding
existing models.

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Table 3: Breakdown of Survey Questions

Sections in Survey Tool
No. of question
in section
1 General information about the respondent 2
2 Overall capabilities of the universities with which they have
had experience
2
3 Interactions with US universities 5
4 Trends in industry interactions with US universities 5
5 Universities in US that are considered to be “Star
performers”
2
6 Respondents opinions of the existing model 5
Total No. of
Questions= 21

The initial survey was a twenty-one question, on-line survey using the
Qualtrics web-based survey design and delivery system (http://www.qualtrics.com/).
The Qualtrics software provided a platform for designing, distributing and evaluating
survey results. The survey included a combination of “Yes/No”, “Choose One”,
“Scaled” and “Open Ended” questions.
To remove biases from individual questions all of the possible answers in any
given question were randomized using the Qualtrics software. Results of the surveys
were collected and stored electronically.
The Qualtrics software automatically calculates either percentages, counts,
minimums, maximums, standard deviations, variances or means for all of the
“Yes/No”, “Choose One”, and “Scaled” questions. For the purpose of this study all

80
data was graphed and analyzed using percentages and/or actual counts. Given the
nature of the questions used in this survey there really is no way to ensure a normal
distribution and as such no further statistical analysis was done on the results. Open
ended survey questions were examined for their information content and analyzed to
see if any trends or common elements appeared.

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CHAPTER 4
RESULTS
4.1 Results of Focus Group
The main purpose of the focus group was to assist the investigator in
designing an effective survey tool and deploy it in an effective manner which would
maximize the response rate. The 90 minute period over which the focus group met
was divided into three phases. In the first phase (approximately 30 minutes), broad
questions regarding the overall survey structure and deployment were discussed. In
the second phase (approximately 45 minutes), the strengths and weaknesses of
individual questions were considered. In the last phase (approximately 15 minutes),
there was again general discussions about the topic and its potential use, followed by
informal conversations. The main feedback from the focus group centered on
sampling methods. The importance of getting a good mix of company sizes and
industry sectors was emphasized to ensure that the results of the survey accurately
reflected a diversity of company sizes and product sectors. The group felt that the
sampling should ensure good representation from smaller companies because they
currently seemed most willing to work directly with universities. The focus group
also agreed that ensuring the anonymity of the survey responses would heighten the
sense of security that responses could be expressed honestly.
The group felt that “war stories” would be particularly useful to illustrate
how industry felt about the current models of university-industry interaction and
where changes, if any, were required in future.

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4.2 Analysis of Survey Results
Eighty links to the on-line survey were disseminated between December 1,
2010 and January 31, 2011; seventy two responses were received, yielding a
response rate of 90%.
Two of the seventy two respondents did not complete the survey because,
they did not believe after reviewing the survey questions that they had sufficient
experience in the subject areas addressed by the survey.

4.2.1 General Information about the Respondent
Of the seventy respondents, 53% worked in small companies with 100 or
fewer employees. Twenty three percent worked in large companies with more than
5000 employees (Figure 8).

Figure 8: How Many Employees Work in Your Company/Research Foundation?

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Respondents were broadly distributed across different sectors of the industry,
with most in medical device and prescription pharmaceutical companies (Figure 9).
The sum of numbers in Figure 9 is greater than the number of respondents, reflecting
the fact that some respondents worked in companies that operated in two or more
sectors.

Figure 9: What Product Area(s) is/are Your Company/Research Foundation
Involved In?

4.2.2 Overall Capabilities of the Universities with which they have had Experience
Respondents affirmed that a broad range of services were offered by US
universities to enhance technology transfer (Figure 10). The most common services
available at US universities appeared to be proof-of-concept facilities, phase 1
clinical trial capabilities and business and laboratory incubator facilities. More

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rarely were the universities found to be equipped with manufacturing facilities under
GMP for clinical trials, or regulatory support services for IND/IDE submissions.

Figure 10: Which of the Following Support Services Have You Found in the
Universities With Whom You are Discussing Potential Technology Transfer
Options?

Respondents also had a wide range of views when asked which
services/facilities they believed to be most important for universities to have in place
to support the development of medical products. The respondents placed the highest

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value on funding for developmental activities within the university (e.g. Accelerator
Funds), and the presence of Proof of Concept facilities (Figure 11). The least
important support services in the opinion of the industry respondents were GMP
manufacturing facilities for clinical trials.

Figure 11: Using the Sliding Scale Below (click and drag) Please Indicate the
Importance of Each of the Following Support Services to Medical Product
Development by the University Past the Discovery Phase

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4.2.3 Interactions with US Universities
The majority of respondents (74%) expressed the view that impediments to
the university-industry interactions existed (Figure 12).

Figure 12: Are There any Elements in the Current University Technology Transfer
Models That You Consider to be Impediments to University-Industry Interaction?

Respondents were forthcoming in their text responses regarding limitations of
the university system. The majority of respondents had text responses (N=53) and
these ranged from comments as short as 5 words to as long as 521 words.
Comments could be divided into nine major areas of focus: (i) unrealistic
valuation of technology by investigators and university staff, (ii) lack of
motivation/incentives for researchers, (iii) lack of overall understanding of the steps
and risks involved in the development of a new medical product, (iv) lack of

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financial and personnel resources (v) very slow response times, (vi) overly
bureaucratic procedures, (vii) ineffective technology transfer mechanisms, (viii)
issues related to the handling of intellectual property and (ix) Overall hostility
towards industry as a whole. Some of the respondents expressed strongly-stated
disapproval of university practices in general (see Appendix F for Complete
Responses). The most prevalent type of comment, expressed by 40% of respondents,
was concerned with the unrealistic valuation of university technologies. Below are
selected comments related to each area.

(i) Unrealistic valuation of technology
Over estimation of the value of inventions leading to long or failed
negotiations for use.

Over estimating value of University IP, unrealistic expectations around
potential royalty rates and lack of flexibility around IP ownership and
contractual terms.

Inability to realistically value the technology and under estimation of what is
involved in commercialization of such.

Universities view the value of their IP license too high early on and want up-
fronts and early milestones which are not consistent with the risk which a
company, especially a smaller start-up/entrepreneurial company, is taking to
try and develop it. Also, universities have a hard time valuing the need for
the company to obtain additional licenses to unblock the IP.

Most University Tech transfer organizations have no concept of the actual
costs/risks in bringing medical device products to market. They have
completely unrealistic valuations for very early stage technology, want
excessive money up front, and payments throughout a project. They are
staffed with people without any real world experience and are focused solely
on IP.

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Universities in my view tend to overestimate the value of early stage
programs. My statement is based on the historically high attrition rates seen
for pre-proof of concept programs. In many cases this has inhibited initiating
early stage collaborations.

One can make an argument that Universities are moving toward a model of
obtaining returns that a privately funded company would expect for their
innovations, except the University uses public money to fund their
innovation.

(ii) Lack of motivation/incentives for researchers
No motivation/incentive for universities to monetize or capitalize their
discoveries. Leads to a lack of urgency and lack of accountability for
activities that could generate significant revenues for the university.

Bayh–Dole Act often puts University and investigators add odds with
incongruent incentives/fears.

(iii) Lack of overall understanding of the steps and risks involved the development of
a new medical product
The lack of understanding by academia of industry has also limited the
success we've found when working with universities; while we haven't
needed regulatory support from the universities, it would have been helpful
for someone to have understood our regulatory path and related needs from
the academic research team.

Legal negotiations on contracts/royalties belie a lack of understanding that
the major work & investment in getting a therapy to market is done after the
proof of concept stage.

University places too much value/restriction on 'Concept', with little or no
appreciation of the attrition risks faced by industry.

The amount that the university expects to share with the company that is
funding the research is often times unrealistic and does not reflect the
significant risk to pre-clinical or early clinical drug candidates and the
significant financial expenditure by companies involved in the development
side.

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The lack of understanding of drug development from the tech transfer side
can create unrealistic expectations regarding deal structure.

Most University Tech transfer organizations have no concept of the actual
costs/risks in bringing medical device products to market.

Universities do not package the "idea" in a way that allows a businessman to
assess product feasibility. Aside from technical cleverness, the idea needs to
be packaged within the context of IP protection ('s do OK here),
manufacturability, market/customer fit, development cost, reg. plan,
development schedule. U's need to emulate what an internal company R&D
group would need to do to sell their "idea" to management. [sic]

(iv) Lack of resources, both qualified personnel and financial
Lack of resources, both financial and personnel, have impeded past
opportunities.

There is not enough funding for critical animal experiments, production of
molecules for those experiments, pk studies that can take a possibility and
demonstrate its practicality to a potential partner.[sic]

Lack of funding for tech transfer offices which prevents useful and timely
interactions.

Many are underfunded and allow opportunities to languish or pass them up
entirely.

(v) Very slow response times
The University does not seem to embrace the concept of time. Project
timelines are undefined and when defined are not meet.

Universities are slow to respond - it can take many months, if not years to get
license agreements in place.

The time to get university agreement on contracts can go on for months,
sometimes approaching years.

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(vi) Overly bureaucratic procedures
Administrative time delays.

Cumbersome (complex and/or time consuming) approval processes;
Cumbersome documentation (contract) processes Lack of transparency on
process(es) for approval and documentation
Many layers of approval.

Slow and bureaucratic decision process.

(vii) Ineffective Technology Transfer Offices
University offices too slow, too regimented/inflexible in dealing with
variables in negotiations.

Most of the people in UTTs do not understand the needs of the business,
especially in a start-up phase. [sic]

It totally depends on the institution. Some have weak or have no TT models -
- this can be the kiss of death. Some are too stingy, reducing incentives.
Many are underfunded and allow opportunities to languish or pass them up
entirely. [sic]

People on staff in the Tech transfer office are poorly trained at best and
incompetent at worst.

University tech transfer groups often do not approach dealing with industry
from a realistic view point. There needs to be a better understanding from the
university position regarding business and how best to negotiate a tech
transfer deal with business.

Personnel - less than experienced personnel in the Tech Transfer Office -
Difficulty in doing deals - rigid - risk adverse - prefer to own 100% of
nothing.

Many tech transfer offices clearly are incentivized to sell the IP, not think
outside the box for other arrangements.

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(viii) Issues related to the handling of intellectual property
IP negotiations can take forever. If a pharma company has invested years of
work to discover a molecule, then it is not reasonable for the university to
claim all IP that is generated as part of a collaboration. The inability of some
university tech transfer offices to distinguish IP coming into the university
from that going out of the university can be a significant impediment to
collaboration. [sic]
The IP reach-through often precludes the licensing of assays, animal models
or other tools to industry for use in drug development.

The realization that IP can't always be controlled by the University.

(ix) Overall hostility towards industry as a whole
Suspicious to slightly hostile attitude toward entrepreneurs (vs. being
welcoming and serving as a good host).

My experience has been that when a scientist/entrepreneur wants to license
some IP to a pharma, the TTO is worried that the pharma is trying to 'screw'
the university-- and, the reality is that IP covering early stage discoveries has
very little value. [sic]

When respondents were asked if they believed that the proximity of a
university had any effect on the decision making process when looking at potential
university partners, 59% responded that it was not an important factor; only ten
percent felt that it was very important (Figure 13).

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Figure 13: What is the Importance of the Proximity of the University (same city) in
the Decision Making Process when Selecting a University with Whom You Might
Partner?

Respondents were asked to rank the stage in the medical product
development life cycle at which they would prefer to get involved with a university
research project. Most appeared to prefer earlier rather than later stages. Thirty-
seven percent ranked the Proof of Concept phase as their first preference, and 32%
ranked the conceptual stage as a first preference (Figure 14). In contrast, 65% of
respondents ranked Phase III clinical trials as their least preferred stage at which to
get involved.

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Figure 14: Please Rank the Following Stages in the Product Development Life
Cycle that your Company/Research Foundation Prefers to Get Involved with a
University Researcher

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The results in Figure 15 show that the industry respondents believed that
streamlining the bureaucracy during negotiations with universities was the most
important factor in improving relationships between universities and industry. The
second most important factor was a better understanding of how a given technology
will benefit the industrial partner.

Figure 15: Please Indicate the Importance of the Following Factors in Improving the
Relationship between Industry and Universities

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4.2.4 Trends in Industry Interactions with US Universities
Figure 16 shows that 57% of the industry respondents indicated that their
corporate strategy includes an increased role for university research.

Figure 16: Does Your Corporate Strategy Include an Increased Role for University
Research?

Sixty eight percent of the respondents who replied that their company’s
corporate plan did indeed include an increased role for university research also
indicated that their company's/research foundation's corporate budget were planning
to allocate additional resources for working with universities.

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Figure 17: If You Answered Yes to the Question Above, Will Your
Company's/Research Foundation's Corporate Budget Allocate Additional Resources
for Working with Universities?

When asked if their company’s interactions with universities would be
focused mainly on universities in the United States, 50% of respondents said yes and
40% replied no (Figure 18).

Figure 18: If You Answered Yes to the Question Above, Does Your
Company's/Research Foundation's Increased Interaction with University Researchers
Focus Mainly on US Universities?

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Those respondents who answered affirmatively reported different types of
interactions. Those respondents who answered negatively identified that the favored
target for expansion of activities was the EU, followed by Asia Pacific and China
(Figure 19).

Figure 19: If You Answered No to the Above Question, Please Rank the Other
Geographic Regions that Your Company will be Concentrating On

About equal number of responses identified that universities would be
sources for new technologies in their pipelines or research partners on specific
projects (Figure 20). Less frequently the interaction was considered to include the
development of spinoff companies for eventual acquisition and in a few cases, the
respondent felt that all of these avenues were being pursued. The sum of numbers in

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Figure 20 is greater than the number of respondents, reflecting the fact that
respondents were able to chose more than role for the universities.

Figure 20: Which of the Following Roles Do You See US Universities Playing in
Your Company's/Research Foundation's Long-term R&D Plans?

4.2.5 Universities in US that are Considered to be “Star Performers”
Respondents who were asked to indicate the "star" performers amongst US
Universities with whom they had interactions gave a variety of answers (Table 4).
Nine of the forty four respondents indicated that they felt that Stanford University
was one of the schools that did an outstanding job of technology transfer while six of
the forty four respondents identified the Massachusetts Institute of Technology as
their choice.

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Harvard, with three selections was the third choice and the University of
California, San Francisco, the University of Virginia and the University of Florida
Florida were the choice of two respondents each. The sum of numbers in Table 4 is
greater than that of number of respondents, reflecting the fact that some respondents
identified more than one university.

Table 4: If You Feel That One University in the US Does an Outstanding Job of
Technology Transfer, Can You Identify That University and Explain Why?

U.S. University
Number of
Respondents
Stanford University 9
Massachusetts Institute of Technology 6
Harvard University 3
University of California, San Francisco 2
University of Virginia 2
University of Florida 2
University of Pittsburgh 1
Johns Hopkins 1
California Institute of Technology 1
University of Pennsylvania 1
University of Nebraska 1
Columbia University 1
University of California, Irvine 1
University of Michigan 1
University of California, San Diego 1
Rutgers University 1
The collective University of California system 1
University of Wisconsin 1
California Institute for Quantitative Biosciences (qb3) 1
Did not feel any of the schools that they have dealt with did an outstanding job. 10
TOTAL NUMBER OF RESPONDENTS (N) 44

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The respondents were also asked to explain what it was about the universities
that they chosen that made them "star" performers. The following is a sampling of
some of the comments that were made about the top three choices (i) Stanford (ii)
Massachusetts Institute of Technology and (iii) Harvard.

(i) Stanford University
Stanford University...has specific goals to attempt to translate research into
commercially viable products. Has a streamlined tech transfer system.[sic]

Stanford can offer great flexibility with terms that are palatable to
commercial partners, such as Commercially Reasonable Efforts for diligence.

They have a well run mechanism to preview technology (internet based) and
have simple boiler plate contracts.

In my estimation it is because many years go their pension fund manager
elected to invest a small percentage of pension funds in university start-ups.
Companies like Genentech resulted.

(ii) Massachusetts Institute of Technology
MIT is really good at understanding what characteristics the technology
should have to attract buyers and does an even better job at bringing in
industry to help design/develop those technologies. Technology transfer, for
MIT, means monetizing the value of their hard earned research to bring value
to society, not an individual professor trying to make a name for him/herself.

MIT - they aggressively market their capabilities, network with the venture
community and they are very responsive during agreement negotiation.

(iii) Harvard
Harvard University: they are very active in partnering / put licensing, the
team is very professional, an organization / grant has been created to promote
interesting and valuable programs, the quality of science is excellent.

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Harvard have a critical mass of scientists and work well across
disciplines.[sic]

When respondents were asked if they have had any interactions with any
"star" performers outside of the US no one university stood out. As can be seen in
Table 5, Imperial College London was the only school that was mentioned twice
with the University of Manchester, University of Singapore, Cranfield University,
University College London, Cancer Research UK, University of Dundee and Utrecht
University all mentioned once.

Table 5: Do You Feel That One University Outside of the US Does an Outstanding
Job of Technology Transfer, Can You Identify Which University and Explain Why?

Foreign University Number of Respondents
Imperial College London 2
University of Manchester 1
University of Singapore 1
Cranfield University 1
University College London 1
Cancer Research UK 1
University of Dundee 1
Utrecht University 1
No experience with foreign universities 15
TOTAL NUMBER OF RESPONDENTS (N) 24

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When the respondents were asked to explain what it was about the foreign
universities that made them "star" performers there were a number of general
comments with respect to the overall differences between the way that universities in
the US and Europe interact with industry. The following is a sampling of some of the
comments that were made.
Discussions and particularly contractual negotiations with UK universities in
general are generally more smooth than with US.[sic]

However, my impression of European institutions is that the staff interacts
much more closely with industry on scientific collaboration. Similarly, our
O.U.S. research sites appear to have a much greater degree of contact with
universities and rely more heavily on them for technical and laboratory
testing support.

4.2.6 Respondents' Opinions of the Existing Model
Thirty nine percent of respondents either strongly agreed or agreed that the
current university and NIH conflict of interest guidelines had a negative effect on
how they worked with potential university partners. Thirty seven percent neither
agreed nor disagreed that the current conflict of interest guidelines effected their
interactions with US universities while 24% disagreed or strongly disagreed with the
statement (Figure 21).

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Figure 21: University and NIH Conflict of Interest Guidelines Have a Negative
Effect on How You Work with Potential University Partners. Do You Agree with
this Statement?

Figure 22 shows that 24% of the survey population strongly agree or agree
that US universities are doing a good job of working with industry when developing
new medical technologies.

Figure 22: Universities in the US Do a Good Job of Working with Industry to
Develop New Medical Technologies. Do You Agree with this Statement?

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In comparison, 36% of respondents either strongly disagreed or disagreed
with the notion that US universities are doing a good job of working with industry
when developing new medical technologies with the majority of respondents (40%)
indicating that they neither agreed nor disagreed.
Respondents were forthcoming in their text responses which outlined what
they believed were the pros and cons of working with US universities in the
development of a new medical product under the existing model. The responses
(N=58) ranged from comments as short as 4 words to as long as 151 words and were
broken down into two groups, (1) pros and (2) cons of working with US universities
in the development of a new medical product under the existing model(See
Appendix F for Complete Responses). On the pro side, the comments can be broken
down into five categories (i) access to experts/opinion leaders in their field, (ii)
discovery of innovative new technologies, (iii) access to public research funding, (iv)
broader "out of the box" thinking and (v) access to specialized
equipment/technology. Below are selected comments related to each category;

(i) Access to experts/opinion leaders in their field
Creative thinking, deep expertise in advanced fields.

Opinion leaders and other domain expertise in one location.

A forum for spontaneous idea generation that supports the strategic defined
remit of companies - the two are complimentary.

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Innovation and access to talent (post docs and grad students).

Opinion leaders and other domain expertise in one location.

(ii) Discovery of innovative new technologies
Cutting edge medicine/science.

Source of new ideas for driving early stage innovation.

Great new technology being developed.

State of the art discovery research and mechanisms of action analyses.

(iii) Access to public research funding
Public funding of early stage, high risk research.

Ability to access technology at an early stage, chance for government funding
of research programs.

(iv) Broader "out of the box" thinking
There is, among university research programs, a broad diversity of research
activities much broader in scope than any one company could possibly
pursue.

Working with individuals who understand science/research (and who
understand the importance of good science), who think outside the box, and
are not constrained to think in terms of budget/business/BOD.

Also, universities might not be under as great pressure as industry researchers
to "fail early, fail fast" given that some research might be part of a graduate
student's thesis program.

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(v) Access to specialized equipment/technology
Access to the latest technology, and eager students.

Access to new skills, technologies, key expertise and new ways of working.

Great on-site equipment for testing devices.

The comments that were received from the respondents with regard to the
"con" side of working with US universities in the development of new medical
products were similar to the responses that were collected earlier in the survey when
asked about impediments to university-industry interaction. The responses can be
broken down into six categories:(i) unrealistic valuation of technology by
investigators and university staff, (ii) lack of overall understanding of the steps and
risks involved the development of a new medical product, (iii) very slow response
times, (iv) overly bureaucratic procedures, (v) ineffective technology transfer
mechanisms and (vi) Issues related to handling of intellectual property position (See
Appendix F for Complete Responses). Below are selected comments related to each
category.

(i) Unrealistic valuation of technology
Cons include an unrealistic assessment about the value of programs at the
early stage i.e. how much effort will be need to take these ideas and concepts
and develop them into a product concept and product.

Unwarranted financial expectations both in time and money.

They sometimes overstate the value of what they have.

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In short most university researchers and tech transfer offices inflate the value
of their asset when licensing and want too many restrictive terms.

Unrealistic expectations for time and money.

Excessive expectations for financial commitments for medical devices given
the early stage of development.

(ii) Lack of overall understanding of the steps and risks involved the development of
a new medical product
Lack of understanding about the product development/commercialization
process for new products.

They view biotech/pharma as an endless ATM.[sic]

Lack of understanding of what it takes to get a product to market to return on
the investment makes negotiations difficult.

Individuals not having an appreciation for industry needs and the overall
business development path, individuals who lack regulatory understanding
and what is needed to get products approved.

Cons include lack of understanding of drug development process and lack of
a sense of urgency.

Scientists normally focused on grants and administration (tech transfer) not
always understanding of pharma's goals/objectives/procedures. [sic]

Unrealistic tech transfer; lack of understanding that the conception is just the
first step on a very long and expensive road.

University professors don't generally understand industry drug development.

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(iii) Very slow response times
Procedures/process/timelines for getting to an agreement to do work; lack of
urgency on timelines and deliverables.

Too slow.

The biggest con is slowness.

Sloppy time lines and grant report attitude vs. timed product development.

Administrative time delay; unrealistic milestones.

Glacial pace of getting any contracts executed.

Lack of sensitivity to industry time lines and scheduling.

(iv) Overly bureaucratic procedures
Bureaucratic negotiations for rights to technology.

Con's - bureaucracy, costs.

Bureaucracy! ..academic approaches which are not feasible to manufacturing.

(v) Ineffective Technology Transfer Offices
Awkward interface between business office and academic lab, hinders setting
up a deal.

Tech transfer office staffed with people who have never had operational
experience.

Tech Transfer offices are very difficult to work with.

Limited business understanding.

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(vi) Issues related to handling of intellectual property position
The biggest factor against working with universities is ownership of IP and
the expense of licensing.

IP position that universities take.

Handling novel IP that is not contemplated at the beginning of the
collaboration.

When asked if they believed that there is a need for a change in the way
universities interact in the US, 86% of the respondents replied that they either
strongly agreed or agreed that there was indeed a need for change while six percent
responded that they strongly disagreed or disagreed that any change was necessary
(Figure 23).

Figure 23: There is a Need for a Change in the Way in which Universities and
Industry Interact. Do You Agree with this Statement?

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The final question that the respondents were asked was "What if anything you
would like to see universities do differently". Unlike the other text questions in the
survey, this question is more difficult to break down into general categories due in
part to the very specific nature of the answers. The answers covered areas such as the
incentives given to researchers, faster more streamlined negotiations, lower upfront
payments, additional financing from the university, more creative and flexible and
understanding that universities are not industry (See Appendix F for Complete
Survey Responses). The four areas that received the most mention advised the
university to (i) Establish relationships with industry, (ii) recruit people with industry
expertise, (iii) develop a better understanding of industry's needs and (iv) change the
way that Technology Transfer Offices work. Below are selected comments related to
each category.

(i) Establish relationships with industry
Invite scientists from industry to present seminars and participate in open
forum meetings. When I was a graduate student at Berkeley, the only
seminar speakers were from academia. Most of the Ph.D.s and Post-docs
never get to interact with industry scientists until they are out looking for a
job.

More interactions to get advice from industry. More selectivity in what is
pitched, so that the attentions are focused.

Should have a core group focusing on external relationships. This group
should have broad experience and support from the university.

Professionalize activities, including IP. Develop long term and stronger
relationships with sponsors. Think about co investment of capital.

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There should not be an "us vs. them" philosophy. Just because an
organization or an individual is industrial or "for profit" does not make their
motives suspect. Universities in general should make it easier for
collaboration at the level of the individual investigator, clinician or lab.

(ii) Recruit people with industry expertise
Recruit more ex-industry people to work in their business office to facilitate
tech. transfer.

Add experienced drug developers to TTO or create a proof of concept group
that supports the researchers. This group CAN NOT be people from big
pharma who spend 10% of their time helping or are volunteers. These need
to be paid individuals whose job is to advance technologies to partnering.[sic]

Hire top flight tech transfer staff with industrial experience and empower
them. Bridge the divide between business/legal and science/technology.

Hire people with industrial experience to guide their internal decision
making. IP is just one facet of product development and tech transfer.

They need to focus on translational research and hire successful staff who are
capable of guiding such projects from industry. We are beginning to see
translational research institutes being developed by academic organizations
but in most cases they are just paying lip service to the use of the term
translational research by the NIH.

(iii) Develop a better understanding of industry's needs
Get a better understanding of the industry needs in terms of intellectual
property and manufacturing, more flexibility in the licensing deals.

Understand business.

Educate the faculty and researchers in product development methodologies
and discipline.

Invest in gaining an understanding of the development and commercialization
issues of the technology they seek to out license so that a more realistic
understanding of value and shared risk can be negotiated.

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Better understand industry's goals and development process.

Develop greater business awareness of how to work with industry and what
industry needs re: innovation.

I like what I am seeing as a general trend for universities to have
commercialization/innovation centers staffed with former industry people. It's
especially helpful when the university individuals are well-versed in the
technologies that have been developed at the university and can respond to
queries specifying needs/wants of a potential partner. More of the same going
forward, please!

(iv) Change the way that Technology Transfer Offices work
Strengthen tech transfer offices to better vett opportunities, negotiate more
realistically and professionally.[sic]

Seek a win-win solution, don't worry about whether you will look like an
idiot if you miss the next "Apple" or medical breakthrough technology;
realize that MOST of what you patent/file is NOT going to ever reach
successful commercial maturity.

Change the culture of Tech Transfer; Provide support - IP (FTO and novelty),
regulatory, reimbursement assistance; Reward faculty inventors more
generously and not use proceeds as a means to operate ineffective tech
transfer offices.

Better tech transfer offices particularly around company funded work at the
university and IP.

Better VPR's more in tune with the realities of industry interactions Better ip
policy that does not try to claim ownership of industry IP. [sic]

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4.2.7 Cross Tabulations
A preliminary examination was conducted to evaluate if the size of the
company or the sector in which the respondent worked had any effect on the views
of the respondents. A cross tabulation was therefore performed to see how size or
nature of the company affected answers concerning the need for a change in the way
in which universities and industry interact. A preliminary examination was
conducted to evaluate if the size of the company or the sector they worked in had any
effect on their views of profiles of the respondents affected their views on whether or
not there is a need for a change in the way in which universities and industry interact.
The pool of survey respondents in this study was comprised of
representatives from all of the major sectors of the healthcare industry and from
companies of various sizes. Of the seventy respondents, 53% worked in small
companies with 100 or fewer employees while 23% worked in large companies with
more than 5000 employees (See Figure 8). Thirty eight percent of the respondents
worked in companies that had pharmaceutical interests with 31% in the medical
devices field.
The remaining sectors covered were biologics (16%), stem cells (6%), gene
therapy (5%) and "others" made up the remaining four percent.
Two examples of data sets subjected to cross tabulation analyses are shown
in Appendix G. For the first cross tabulation, the question, "There is a need for a
change in the way in which universities and industry interact. Do you agree with
this statement?" was cross tabulated with the size of the company in which

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respondents worked. The modal value for both companies with 100 or less
employees and companies with 3,000 or more employees was "agree". The
approximated P value for this correlation using a Chi Square test was 0.53 with 24
degrees of freedom. For the second cross tabulation, the question "There is a need
for a change in the way in which universities and industry interact. Do you agree
with this statement?" was cross tabulated with the healthcare sector that respondents
companies worked in. The modal value for Pharmaceutical, Medical Device and
Biologics companies were all "agree". The approximated P value for this correlation
using a Chi Square test was 0.57 with 40 degrees of freedom.

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CHAPTER 5
DISCUSSION
5.1 Consideration of Methods
The present study was directed at understanding how the medical products
industry views the current state of university-industry interactions in the US. Survey
methods were considered to be a useful approach to gain insight into the strengths
and challenges associated with university-industry interactions by eliciting a
relatively large numbers of views to standardized questions. This approach takes
advantage of the well-acknowledged advantage of surveys as a method of
observation when trying to describe the characteristics of a large and diverse
population. Challenges can exist, however, with regard to the validity of survey
outcomes. These are often described in detail in textbooks of experimental design
(e.g., Patton, 2002) and must be assessed critically when interpreting the results of
this study.
Two aspects of validity that are particularly germane to the study carried out
here are: (i) the face validity of the questions of the survey, to assure that the
questions are sufficiently appropriate and broad for the purpose intended and (ii) the
external validity of the survey, related to the representativeness of the sample with
respect to the whole population of industry-employed individuals who work with
universities and have useful opinions about that interaction. This latter aspect can be
problematic if respondents are chosen in a non-representative way or if the response
to the survey is too low to ensure that the sample itself is not biased.

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Concerns about the face validity of the survey were considered central to the
usefulness of this study. In this study, we used a focus group to improve face
validity, defined as:
...a simple form of validity in which researchers determine if the test seems to
measure what is intended to measure. Essentially, researchers are simply
taking the validity of the test at face value by looking at whether a test
appears to measure the target variable. (Psychology, 2011)

Face validity is important in order to assure that the constituent questions in the
survey are reasonably likely to provide insight into the important issues and concerns
that have been identified in the literature are indeed appropriate to gain insight into
university-industry interactions from the point of view of industry.
The use of a focus group to comment critically on the survey was felt to be an
effective way to ensure that the approach of the investigator from inspection of the
literature was ratified and improved by gaining the insights of experts from both
academia familiar with study design, and business development leaders who
understood the issues of importance with regard to university-industry interactions.
Such an approach is not the usual way in which focus groups have been employed
but has recently been recommended to assist the researcher in controlling bias that
might be inherent if the survey is designed by only one or two individuals (Solberg,
2011, submitted).
Concerns about external validity center on the ability of the sampled
population to represent the broad views of industry with regard to translation of
medical products from university to industry. Because companies differ in size,

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effort was made in this study to obtain feedback from small as well as large
companies. The challenge then arose with respect to the definition of “company size”
in a way that would allow comparison to other literature. Such definition is not
straightforward because the features used to differentiate a "small' company from a
"large" company can vary by country, industry sector, and defining body.
Although many agencies and investigators define the size of the industry by
its number of employees, other methods, such as annual sales, value of assets and net
profit, can and often are used to discriminate small from large companies.
The US Small Business Administration (SBA) breaks down company sizes
by different criteria related to the sectors in which companies work and considers a
small company as follows; "$7.0 million as an appropriate size standard for the
services, retail trade, construction, and other industries with receipts based size
standards; 500 employees for the manufacturing, mining and other industries with
employee based size standards; and 100 employees for the wholesale trade
industries" (SBA, 2009). In the context of this study the "Medical Products Industry"
covers a breadth of industry sectors, from multinational pharmaceutical companies to
small biotech start-ups. Thus it was not possible to fit all of the respondent
companies into a single SBA category by the aforementioned definition. Therefore,
for the sake of comparison, we have arbitrarily defined a small company as one with
100 or fewer employees.
Because the respondents were associated with a company of a particular size,
it was possible to compare the views of individuals from small companies with those

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from large companies. These comparisons, exemplified by the cross-tabulations
illustrated in Appendix G suggest that the views of respondents from small and large
companies do not differ greatly.
The modal value of the responses from individuals working in large and
small companies when asked the question, "There is a need for a change in the way
in which universities and industry interact. Do you agree with this statement?" were
found both to center on “agree”.
Confidence in the validity of the results was further enhanced by the strong
similarities of responses amongst respondents from different product sectors.
The medical products industry in the US is predominantly made up of
companies involved in pharmaceuticals and medical devices with a smaller number
of companies working in areas such as biologics, gene delivery and stem cells.
Because respondents covered a spectrum of medical products industries, it
was possible to compare the views of individuals working in different sectors. As
was the case with company size, these comparisons suggested that the views of
respondents working in pharmaceutical, medical devices, and the other sectors did
not differ greatly.
A second consideration that is often apparent in studies using surveys is the
potential impact that a relatively low response rate can have on the
representativeness of the data. Research has shown that considerations such as the
year the survey was taken, the number of questions in the survey, the number of pre-
notification contacts, the number of follow-up contacts and survey topic salience all

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can have an effect on the response rate (Sheehan, 2001) . Sheehan identified from a
review of the body of published research using E-Mail for data collection that the
average response rate for an E-Mail survey in 2000 was 24%. However, in the
present study, the response rate of 90% was substantially higher than that reported by
Sheehan, and is in fact unusually high for an electronically administered survey. The
high response rate might be attributed to at least two contributing factors. It might
affirm the usefulness of pre-notification contacts with potential respondents as a
means to introduce the survey and of subsequent follow-up contacts to assure that the
survey arrived and was completed. Alternatively it might reflect the high degree of
interest in this topic area by the respondents.
The latter interpretation seems to be reinforced by the large number of text
responses received and the length and emotive content of many such responses.
What might, however, affect the external validity of results is the focus of
this survey on business development experts. It is possible that the views of
individuals in other aspects of the companies, such as regulatory experts, research
and development experts or clinical trial experts, might differ and these additional
populations might provide more insights into impediments and challenges not seen
so clearly through the eyes of the business development experts.
Since business development professionals are primarily focused on
acquisition of new technologies or new companies, it is perhaps not surprising that
one of the major areas of concern raised by the respondents was the process of

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technology transfer and the operation of Technology Transfer Offices. Such a focus
might be unexpected if, for example, clinical trial program managers were polled.

5.2 Consideration of Results
5.2.1 Capabilities of US Universities
One of the objectives of this study was to explore the types of infrastructure
and services currently being offered to researchers in US universities in support of
translational activities. It was outside the scope of this study to look at all of the
support services offered by all of the US universities undertaking medical research
but the results gave some insight into those services that industry representatives
have seen in their recent experiences with US universities. It was interesting that
respondents seemed to view funding for developmental activities and provision of
Proof of Concept facilities as two areas most likely to be valuable for successful
innovation. These two areas are relatively expensive and challenging to
provide."Proof of Concept Centers" are a relatively new approach taken by US
universities.
In their paper entitled "Proof of Concept Centers: Accelerating the
Commercialization of University Innovation", Gulbranson and Audretsch provide
insight into how these Proof of Concept Centers work by looking at both the
Deshpande Center at the Massachusetts Institute of Technology (MIT) and the Von
Liebig Center at the University of California at San Diego (UCSD) (Gulbranson &
Audretsch, 2008). As is the case with most incubator facilities, no shared lab space

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is promised in these Proof of Concept Centers; the researchers whose projects are
chosen to be included in the Centers still continue to do their research in their own
labs. The Center provides three types of services: (i) seed funding, (ii) advisory
services, and (iii) educational programs and seed funding in the range of $15,000 to
$75,000.
Given the fact that both MIT and UCSD both have Proof of Concept Centers
in place it is not surprising that both of these schools were mentioned when the
survey respondents were asked which universities in the US that they considered to
be “star” performers. In this regard, it was interesting that Harvard University was
also mentioned when survey respondents were asked which universities in the US
that they considered to be “star” performers. Its reputation may derive in part from
its approach to create its own targeted funding source, called the Technology
Development Fund, in 2007. The goal of the fund was "to provide Harvard Scientists
with the financial resources needed to traverse the development gap and generate the
confirmatory data required to attract commercial partners" (Buderi, 2008). In its first
year the fund invested $1.3 million in six projects which included technologies that
dealt with cancer, HIV and diabetes. From the outside looking in, these Accelerator
funds look and behave very much like venture capital funds. However, a significant
difference is that individuals providing the private donations do not have an
expectation of return on their investments.
Proof of Concept facilities and funding mechanisms are expensive to put into
place. Funding to support the Proof of Concept facilities at MIT and UCSD and the

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accelerator fund at Harvard were initially developed using private donations; $10
million dollars for the Von Liebig Center at UCSD, $17.5 million dollars for the
Deshpande Center at MIT (Gulbranson & Audretsch, 2008) and $6 million dollars
for the Technology Development Fund at Harvard (Buderi, 2008).
It is not clear how resources such as these are to be afforded by other
universities. The information may suggest that technology transfer will be more
effective at those universities with endowments and strong fund-raising capabilities,
and with the will of senior university administer to foster direct investment in these
areas. It does not however, guarantee that the returns on those investments will be
adequate to justify the expenditure of funds.
Clearly this could be an area in which better tracking of technology transfer
successes could help to provide insight into which areas of investment have the most
potential for return on investment.

5.2.2 Industry-University Interactions
The findings of this study suggest that individuals involved in the business
development functions strongly believe that universities in the US need to change the
way in which they interact with industries when developing new medical
technologies. If you combine the fact that nearly 75% of respondents believed that
impediments to the university-industry interactions did exist with the fact that 86%
either strongly agreed or agreed that there was need for change in those interactions,
it seems clear that universities have additional work to do. Such attention to

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university-industry relationships is especially important because of views also
expressed here that interactions between industry and academia are likely to grow
rather than shrink in future.
The finding that corporate strategy for 57% of the industry respondents
included an increased role for university research, and 68% of companies were
planning to allocate additional resources for this purpose, supports the notion that
these types of interactions with universities have high priority.
The results in this study suggesting further growth in university-industry
interactions seems consonant with anecdotal evidence already present in the popular
press and with thought leaders in the private sector. In a recent interview with
Nature, Patrick Vallance, Vice-president of Medicines Discovery and Development
at GlaxoSmithKline, was asked his opinion about the changing relationship between
industry and academia, and the prospects for new models of drug discovery
(Cressey, 2011a). His response was that “internal drug discovery is still important,
even with the best will in the world, much of the external drug-discovery work still
leaves quite significant gaps”. Nevertheless, he went on to say:
If you look at many academic labs, they know the things that aren't
necessarily put in papers. GSK is not going to have 15 years' experience with
one target like they have, because we move from target to target. What we do
have is real expertise in turning that target into a medicine. The idea is to
unite those two strengths and tie ourselves together in a milestone-driven
partnership. That way we play to each other's strengths and instead of it being
a cash transfer, we're actually working together.

When asked if it was realistic that a company like GlaxoSmithKline could adopt a
model in which all of their R&D was done externally, Vallance explained that he did

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not believe this to be workable; he expressed the view that one would lose the ability
to make proper judgments about what is going to work and why. He suggested that,
in his mind, a 50/50 internal/external research model about right.
One of the response sets about elements that would improve the transfer of
technology did yield a surprise was that concerned with the importance of
geographical proximity of universities with which a company intended to work.
When respondents were asked if they believed that the proximity of a
university had any effect on the decision making process when looking at potential
university partners, almost 60% indicated that it was no longer an important factor
and only ten percent felt that it was still important. This result raises questions about
the importance of geography in the development of research parks, viewed as “large
multi-partnered efforts to enhance “Knowledge Spillovers” between universities and
tenant firms, in order to enhance regional economic growth” (Link, 2002). A
university research park has been defined as:
...a cluster of technology based organizations that locate on or near a
university campus in order to benefit from the university’s knowledge base
and ongoing research. The university not only transfers knowledge but
expects to develop knowledge more effectively given the association with the
tenants in the research park. (Link & Scott, 2005)

The success of research parks in the US has been attributed, in part, to the
geographic proximity of universities and is based on the theory of knowledge
spillover, where the physical proximity between the university and the local industry
was assumed to provide ready access to newly developed technologies. However,
recent attempts to duplicate the successes of the early parks, such as the Research

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Triangle Park in North Carolina, have, for the most part, failed (Link & Scott, 2005).
The results of this survey would suggest that, in this era of strong electronic
communication tools and easy air access to most universities, the physical proximity
of potential university partners is no longer as important a factor as has been viewed
in the past.
Such a view is further supported by responses in this survey suggesting that
companies no longer concentrate all of their efforts on research conducted at
universities in the US; they are now looking at distant geographic regions such as
Europe, China and the Asia Pacific. As industry attempts to find new ideas anywhere
in the world, US universities will find in future that they must compete with
universities around the globe as they develop industry interactions.
Whenever discussions turn to the topic of funding for new medical
technologies facing the “valley of death”, the role played by venture capital
companies is often viewed as important. Thus it is interesting to compare the results
presented here with those collected in a recent study, already discussed in Chapter 2,
by the University of Southern California’s Technology Transfer Office, the Stevens
Institute. The white paper entitled “Venture Capital–University Interface: Best
Practices to Make Maximum Impact” (Appendix E) surveyed the views of venture
capitalists regarding their likes and dislikes when working with universities. The
results of the Stevens Institutes survey highlighted five main categories of activities
to enhance interactions which included areas such as streamlining bureaucracy and
increased access to university researchers.

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To determine if the priorities of venture capitalists and business development
professional from industry differed in this area, one of the survey questions in this
study asked the survey respondents about the importance of each of the five factors
that were highlighted by the USC Stevens Institute’s paper; (1) understanding
investor motivations, (2) supporting entrepreneurs, (3) streamlining bureaucracy, (4)
improving access and visibility, and (5) fostering a culture of innovation on campus.
Of the five categories, the respondents seemed to feel most strongly that streamlining
the bureaucracy during negotiations with universities was one of the most important
factors in improving relationships between universities and industry.
The second most important factor appeared to be the need for better
understanding of how a given technology would benefit the industrial partner. The
results of this study indicate that industry and venture capital companies, though very
different in their approaches to investing in new medical technologies, share some
common ground when looking at how universities can improve the current model.
Industry continues to be the biggest player in the commercialization of
university research and the results of this survey give a strong indication that this
involvement will continue to grow. “With drug pipelines running dry and a slew of
blockbuster medicines about to lose patent protection, the voices arguing that the
traditional drug-development process is too expensive and inefficient to survive are
getting louder” (Cressey, 2011b). In his 2011 Nature article entitled “Traditional
drug-discovery model ripe for reform. Academic researchers set to play much greater
role in pharmaceutical development", Cressey further identifies that pharmaceutical

127
companies are considering the value of outsourcing their early-stage drug
development, including phase I safety trials, to academia and/or small specialized
drug development companies. By outsourcing these early stages, pharmaceutical
companies would be able to focus on their core strengths, including Phase II and III
clinical trials, marketing and sales.
One of the goals of this research project was to develop a better
understanding of the role(s) for universities through the eyes of industry, in the
development of new medical products. Their views were considered to be important
because industry is a key stakeholder and "customer" for university innovations.
What was not clear at the outset of the study was the stage at which this customer
preferred to be involved with the university and what was the nature of the role
envisioned for the university in such transactions.
The results of the survey revealed that early interactions were typically
preferred; the Proof of Concept stage and conceptual stage were identified as first
and second choices of most business development manager. When asked about the
role that they envisaged for universities, the two primary choices were sources for
new technologies in their pipelines and research partners on specific projects. When
the results of both questions are combined, it would appear that industry is not
looking for universities to deliver fully developed products; rather they see
universities primarily as sources of new ideas and partners in the development of
products to help fill their pipelines. This finding may have implications when
universities consider the addition of expensive, later stage infrastructure such as

128
laboratories with Good Laboratory Practice or Good Manufacturing Practice
capabilities to support the development of medical products. These are expensive
both to create and to operate. Universities must consider at what point it becomes
economically unfeasible to support medical product development without a
commercial partner.
The fact that industry appears to prefer to partner with universities at an early
stage in medical product development illuminates a difference between the views of
industry and venture capitalists when making decisions as to when they should invest
in a new medical technology.
Studies by Price-Waterhouse-Coopers and the National Venture Capital
Association (Price-Waterhouse-Coopers & NVCA, 2007) and Venture
One(VentureOne, 2006) have shown that angel investors and venture capitalists,
often considered to be the first investors to support products in early stage
development, are in fact waiting until the later stages to invest in university based
technologies. Thus the role of industry as an initial investor in medical product
innovations must not be overlooked.
Industry and venture capital partnerships are the usual way that medical
innovations are developed for eventual market entry.
The current literature suggests that this is typically accomplished by licensing
the intellectual property (Kenney & Patton, 2009; Litan, et al., 2007; Swamidass &
Vulasa, 2009). However, many believe that the formation of university-based spin-
off companies constitutes an important technology transfer option (Siegel, et al.,

129
2003). One of the more interesting findings from this section of the study was that
the industry respondents did not view the development of spin off companies as a
major role for universities in the US.

5.2.3 The Existing Model
It was not a goal of the present study to evaluate all elements and facilities for
medical product development that currently exist in the university. For example,
Technology Transfer Offices are such a common feature of research intensive
universities and have received so much study in the past that their further analysis
was not a focus for this survey.
Nevertheless, a significant finding in this survey related to technology
transfer and was strongly communicated through the text answers that survey
participants were encouraged to add. Many of the text responses were found to
express concern or even hostility about the way that universities handled their
Intellectual Property (IP).
When a respondent says “The biggest factor against working with
universities is ownership of IP and the expense of licensing” and “The realization
that IP can't always be controlled by the University”, a clear message is being sent
that the issue of university IP needs to be addressed.
In recent years a number of journal articles written have tried to address why
the current model of technology transfer is not meeting expectations.

130
With titles like “Why university inventions rarely produce income?
Bottlenecks in university technology transfer” (Swamidass & Vulasa, 2009),
“Reconsidering the Bayh-Dole Act and the current university invention model”
(Kenney & Patton, 2009) and “The university as an innovator: Bumps in the road”
(Litan, Mitchell, & Reedy, 2007) it seems apparent that the entire model of
technology licensing is under review. The authors in all of these articles point out
what they consider to be the pitfalls in the current technology transfer system and
they put forward alternative models that advance alternative models that they believe
would improve the current system. These new proposals differ in some of their more
granular detail but overall can be assigned to two main categories; (i) the “Inventor
Ownership” model where the inventor owns the IP and can exercise the choice to
use their own Technology Transfer Office or use an outside third party body for their
technology transfer activities and (ii) The “Public Domain” model where all new
government funded inventions developed at universities would be publicly available
through some form of non-exclusive licensing agreement.
In February 2011 there was a meeting held in Toronto, Canada, which
brought together forty invited representatives from industry, academia and funding
agencies to discuss how to address the issue of companies and/or academia working
in parallel on similar or identical target molecules (Cressey, 2011b). One of the
organizers of the meeting, Chas Bontra, head of the Structural Genomics Consortium
at the University of Oxford, laid out his vision of what a new model might be.

131
Bontra’s model was based on an approach currently used in the UK by
researchers looking at treatments for so called “neglected diseases”. In this model,
all of the intellectual property (IP) restrictions are lifted; companies compete for
ownership only after early clinical trials had shown a drug to be safe and potentially
effective.
Until Phase I and possibly Phase II trials have been completed, all data on
prospective drug candidates is publically available. Bontra argues that this freedom
to operate would allow targets to be validated more quickly, and potentially translate
into significant cost savings:
The model would rely heavily on academic scientists supported by a global
initiative costing about $325 million a year, with half coming from the
pharmaceutical industry and half from public and charitable sources.
Successful drug candidates would be made available for the initiative's
commercial sponsors to buy and bring to market.

Another major area of concern that came out of the text responses was a
strong belief that universities have unrealistic valuation of university technologies.
Statements such as “Inability to realistically value the technology and under
estimation of what is involved in commercialization of such” and “Most University
Tech transfer organizations have no concept of the actual costs/risks in bringing
medical device products to market” should send a strong message to university
Technology Transfer Offices, to examine the way in which they evaluate their new
technologies.
Proponents of the existing valuation methods will undoubtedly defend their
position by saying that industry will always consider that universities over value

132
their technologies, because they want to acquire pipeline products as cheaply as
possible. This degree to which this is true is not clear. However, whether the
primary role for the universities should be in "selling" technologies is also of
concern, even at the level of authoritative consortia such as the National Academies.
In a recent report that reviews how US universities have managed IP since the
implementation of the Bayh-Doyle Act, the National Academies reminded
universities that their main goal is not to raise money, but rather to disseminate new
knowledge and technologies as widely as possible (Merril & Mazza, 2010).
Who should benefit financially from any new medical discoveries made by
researchers at US universities is one of the most contentious issues in the debate
regarding university-industry interactions. Many would argue that the ultimate goal
of government funded medical research is not to derive profits for researchers and
universities but rather to provide benefits to the health of society as a whole (Cures,
2011a). When analyzing the data from the survey, one text response appeared to
summarize this concern: “One can make an argument that Universities are moving
toward a model of obtaining returns that a privately funded company would expect
for their innovations, except the University uses public money to fund their
innovation”.
If universities are perceived to overvalue the products of their research, who
is setting the value? The primary driver should be the Technology Transfer Offices,
whose performance is often measured by their ability to generate revenue. A 2009
study by Kenney and Patton argues that Technology Transfer Offices are so fixated

133
on generating revenue because that is how their performance is often measured
(Kenney & Patton, 2009).
In the colorfully titled white paper, “Are Universities patent Trolls”, Mark
Lemely of Stanford University, contends that the dominant strategy for Technology
Transfer Offices, because of their tie to the annual budget, is to look for deals with
large up-front payments and to only pursue the new technologies that offer them the
biggest payoff (Lemley, 2006). This idea of university Technology Transfer Offices
looking for “large up-front payments” was supported by the text answers from the
survey respondents when asked if there were any impediments to working with
universities and what they believed to be the “cons” of working with a universities.
The survey did not include any questions which directly related to
Technology Transfer Offices yet the performance, or non performance, of these
offices was a common thread in a large number of the text answers. In fact the text
answers which dealt with Technology Transfer Offices seemed to elicit the most
amount of emotion from the survey respondents. Strong opinions are clearly evident
in text responses such as the following; “Most University Tech transfer organizations
have no concept of the actual costs/risks in bringing medical device products to
market. They have completely unrealistic valuations for very early stage technology,
want excessive money up front, and payments throughout a project. They are staffed
with people without any real world experience and are focused solely on IP” and
“People on staff in the Tech transfer office are poorly trained at best and incompetent
at worst”.

134
The survey tool used in this study was made up of a combination of
“Yes/No”, “Choose One”, “Scaled” and “Open Ended Text” questions; all of which
provided valuable information. One of the most interesting findings of the study was
not related to the responses to a specific question but rather the amount of effort, and
often emotion, which was evident in many of the open ended text responses. These
text answers provided practical, real life, examples of what the current issues are and
where changes can be made.

5.2.4 Current Trends
The results of the survey presented here suggest that the current model for
university-industry interaction has problems. There are recent signs that these
problems are being recognized, at least in some quarters, and are being addressed by
different initiatives at both the governmental, private and not for profit agencies and
groups. On the side of the government, it has driven change in approaches of
funding agencies.
On March 16, 2011 NIH Director, Frances Collins, participated in a question
and answer webinar session that was hosted by Faster Cures and dealt with the
proposed National Center For Advancing Translational Sciences (NCATS).
The formation of NCATS was one of the recommendations that came out of
the 2010 NIH Scientific Management Review Boards Report on Translational
Medicine and Therapeutics (Board, 2010). The Mission Statement of NCATS is “To
advance the discipline of translational science and catalyze the development and

135
testing of novel diagnostics and therapeutics across a wide range of human diseases
and conditions”. With respect to concerns that this new NCATS initiative will
reduce the NIH funds for basic research Collins stated:
...the resources that are going into NCATS, as of October 1(2012), are all
programs that are already funded, they are in different parts of NIH, we are
bringing them together in a collective way. The only new funds that we see
NCATS might be able to receive is the Cures Acceleration Network 100
million dollars that is in the president’s budget. (Cures, 2011b)

Six hundred and fifty people attended the webinar representing a very diverse
group from patient advocacy groups, industry, academia and disease foundations.
The majority of the questions dealt with how the NIH will be accomplish this
“advancement” and what their role will be in the overall translational picture as
NCATS moves forward after its launch in October, 20102. In the words of Director
Collins the main motivation for the new center is "the need to view the drug
development pipeline as a scientific problem, ripe for experimentation and process
engineering” and the main goal of the center will be to “re-engineer the pipeline,
identify ways to be more efficient and more prone to success going through”.
With respect to the NACTS’s role in the overall development of new medical
products in the US, Collins said that the center would be a “modest” contributor and
that there real role may be to act as a “hub” for cross NIH and cross sector
discussions as to how all of the interested parties can work together in an effective
way.
Partnerships that allow, especially in rare diseases, when resources are
limited, building upon every possible source of intelligence, creativity and
frankly funding, is going to be critical to speed the process. As you know,

136
NIH is not exactly in the circumstance now where we have as many resources
as we like for anything, so any type of partnership of that sort would be
appropriate to look at. And I might add that with the foundation for NIH as a
way of managing these kinds of partnerships financially, I think it is a fairly
seamless process to be able to put that together. With any of the organizations
interested in this we will be very much inclined to explore creative processes
for building those partnerships.

A new role for the private sector in creating new types of partnerships is also
apparent, in, for example, the concept of “open innovation”, where collaborative
drug research, often developed with industry resources, is published openly without
the constraints of intellectual property protection. In 2010 GlaxoSmithKline screened
an entire collection of 13,000 compounds that kill malaria parasites and put that
library in the public domain in an effort to interest universities in a virtual drug-
discovery effort (Guth, 2010). Researchers, including those from academia, were
permitted to access the data bank with the understanding that they would then put
their own information back into the public domain. When asked about the role of this
concept in the future of drug development, Patrick Vallance, vice-president of
medicines discovery and development at GlaxoSmithKline, replied:
We don't know whether it works, we don't know whether the worldwide
scientific community will play ball and put that information back in the
public domain. I do think that if that turns out to be a more effective way of
making medicines, we will have to think about the business model that allows
you to do it in other areas.

There are also new players emerging onto the scene when it comes to the
funding issue, including significant efforts by not for profit foundations. In March of
2011 the Gates foundation, for example, made its first direct equity investment in a
for-profit biotech company when it invested ten million dollars into Liquidia

137
Technologies (Timmerman, 2011). Liquidia has developed a method to create 3-D
shaped particles that can be made to look like a virus and can elicit an immune
system response in humans. Doug Holtzman, a deputy director on the infectious
diseases team at the Gates Foundation, explained that “it took more than a year to
sort through the technical, financial and legal issues before the Gates Foundation was
comfortable enough to make the Liquidia investment a reality but this could provide
a template for a new financing approach, which seeks to balance the focus and
discipline of a venture investment with the nonprofit mission of fostering global
health innovation”. What role these groups will play in the future, and how large a
player they will be, is still uncertain but they add one more option for universities as
partnerships to commercialize their research projects.
In the final question of the survey presented here, respondents were asked
"What if anything you would like to see universities do differently?". The answers
reinforced many of the issues that had been identified elsewhere in the survey and
gave practical suggestions about areas in which universities might focus change. By
knowing where changes are perceived to be needed, universities with limited
financial resources may be able to achieve maximum return on investments.
Most comments were found to center around four main themes (i) establish
relationships with industry,(ii) recruit people with industry expertise, (iii) develop a
better understanding of industry's needs and (iv) change the way that Technology
Transfer Offices work. All four of the main themes are either solely or partially
within the purview of Technology Transfer Offices. It may therefore not be

138
surprising that most of the newly proposed technology transfer models include
alternatives to using Technology Transfer Offices (Kenney & Patton, 2009; Litan, et
al., 2007; Swamidass & Vulasa, 2009).
As industry and other partners interact, issues may arise regarding the nature
of these new relationships not only to improve research but potentially also to
complicate it through conflict of interest concerns. A recent conference of industry,
government and academic leaders sponsored by National Center for Research
Resources (NCRR) entitled “CTSA Industry Forum: Promoting Efficient and
Effective Collaborations Among Academia, Government and Industry” identified
that the university rules governing conflict of interest were starting to be viewed as
problems for technology transfer activities between the university and industry
(NCRR,2010).
In particular, they worried that industry might find it difficult to work with
university researchers if long procedures for financial disclosure and caps on
reimbursement for industry-linked activities were to be present. In this study
however, results suggested that conflict of interest rules currently in place at
universities are not yet viewed as major impediments by business development
specialists in industry. The fact that only 39% of respondents either strongly agreed
or agreed that the current university and NIH conflict of interest guidelines had a
negative effect on how they worked with potential university partners may suggest
that this issue has not yet become a compelling concern to business development
officers in general.

139
Such a conclusion may be supported by the further finding that the issue of
conflict of interest was never featured in the respondent text answers with respect to
the “cons” of working with universities. Changes to the conflict of interest
guidelines are being considered by NIH and other governmental agencies to restrict
the amount of money that can be paid to researchers without disclosure, to require
payments to be transparent and publicly accessible, and to limit the role of the
researchers as paid speakers or advisors for companies (NCRR, 21010). Such
changes are important to investigators because of the value that they place on their
industry relationships.
Moses and Martin (2011), point out:
during this decade of growing scrutiny between academic institutions and
companies, that the academic researchers that they surveyed value their non-
financial company ties, with access to technology or research materials, more
than personal compensation or support of their laboratories" (Moses and
Martin, 2011).

Maintaining such relationships would appear to be central to the continuing
exchange of ideas and innovations between the university and industry.

5.3 Conclusions and Future Considerations
The medical products industry, and in particular the pharmaceutical industry,
has gone through major changes in the US over the last few years. Continued
pressure on controlling healthcare costs combined with fewer products in the
development pipeline have forced the industry to re-think how it approaches the
commercialization of new products. At the same time, government is also

140
responding to societal and political pressure to improve the translation of research
derived innovation funded through government. The new NIH initiative to form the
National Center for Advancing Translational Sciences (NCATS) is one such highly
visible initiative. Thus, two of the three players in the triple helix, industry and
government, have identified that a problem exists and have made changes to address
the issues.
It will take years before we will find out whether or not any of these new
initiatives put forward by the US government and industry will have any positive
effects on how we develop medical products in the US, but the first step is realizing
that a problem exists that should be addressed. In contrast, academia, to date, has
shown little evidence of changing the basic model that they have used since the
implementation of the Bayh-Doyle Act in 1980.
Universities that want to differentiate themselves may well be advised to take
a page from Clayton Christensen’s book entitled The Innovators Prescription: A
disruptive solution for healthcare, which introduces the concept of "disruptive
innovation," to the healthcare debate. Basically, a disruptive innovation is “any
innovation (in technology and business models) that transforms an existing market or
sector, making it simpler, more affordable, and more accessible” (Christensen,
Grossman, & Hwang, 2009).
Is it possible to re-engineer the way that universities develop new medical
technologies in the US? Can we re-design the way that medical researchers interact
with governments and industry? As part of the response to the problems articulated

141
here and elsewhere, universities may be forced to address rearticulate its vision of its
role. As recommended by the National Academies, “The mission statement should
embrace and articulate the university’s foundational responsibility to support smooth
and efficient processes to encourage the widest dissemination of university-generated
technology for the public good” (Managing University Intellectual Property in the
Public Interest; National Academies 2010).
At no point in this survey did any of the industry respondents use the words
“smooth” or “efficient” to characterize their interactions with US Universities.
Hopefully the snapshot of views collected here will provide a baseline that
will assist universities to recognize at least some impediments to positive and
efficient interactions central to the ability to commercialize important medical
discoveries and inventions for the public good.

142
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APPENDIX A
DRUG DISCOVERY AND DEVELOPMENT LOGIC PLAN EXAMPLE
(GUARINO, 2007)

151

152

153

154

155

156

157
APPENDIX B
AUTM LICENSING SURVEY INSTRUMENT 2008 (AUTM, 2010A)

158

159

160

161

162

163

164

165

166

167

168

169

170

171

172

173

174
APPENDIX C
BENCHMARKING TECHNOLOGY TRANSFER METRICS FROM DIFFERENT
COUNTRIES

175
APPENDIX D
VENTURE CAPITAL–UNIVERSITY INTERFACE: BEST PRACTICES TO
MAKE MAXIMUM IMPACT

176

177

178

179

180

181

182

183
APPENDIX E
THE USC STEVENS INSTITUTE FOR INNOVATION; DRAFT SURVEY
(HOLLY, 2009)

184

185

186

187
APPENDIX F
FINAL QUALTRICS SURVEY REPORT
Initial Report
Last Modified: 02/02/2011

1. How many employees work in your company/research foundation?

# Answer Response %
1 1-50

33 47%
2 51-100

4 6%
3 101-500

6 9%
4 501-1000

4 6%
5 1001-3000

7 10%
6 3001-5000

0 0%
7 More than 5000

16 23%

Statistic Value
Min Value 1
Max Value 7
Total Responses 70

188
2. In what product area(s) is/are your company/research foundation involved?

# Answer Response %
1 Medical Devices
37 53%
2 InVitro Diagnostics
11 16%
3 Prescription Pharmaceuticals
37 53%
4 OTC Pharmaceuticals
8 11%
5 Biologics
28 40%
6 Drug Delivery
16 23%
7 Generic Drugs
5 7%
8 Gene Delivery
8 11%
9 Stem Cells

11 16%
10 Medical Software
6 9%
11 Other (please list below)
7 10%

Other (please list below)
consulting
industrial biotechnology
Specifically Huntington's disease
Research infrastructure, operations, financial management, regulatory, ethical,
administration.
Many others: IT, telecom, chemistry and materials
Surgical procedures and technical innovation
preservation of living materials for medical and research use

Statistic Value
Min Value 1
Max Value 11
Total Responses 70

189
3. Which of the following support services have you found in the universities with
whom you are discussing potential technology transfer options?

# Question Often Sometimes Rarely Never
Cannot
answer Responses Mean
1
Regulatory support
for IND/IDE
submissions
1 5 18 35 9 68 3.68
2
GLP capabilities for
animal trials
6 18 24 15 5 68 2.93
3
Business Incubator
facilities
9 39 9 8 3 68 2.37
4
Laboratory Incubator
facilities
8 44 4 8 4 68 2.35
5
Manufacturing
facilities under GMP
for clinical trials
1 8 24 26 9 68 3.50
6
Funding for
developmental
activities from within
the university
(ex.Accelerator
funds)
4 23 18 15 7 67 2.97
7
Phase I clinical trial
capabilities
10 21 20 12 5 68 2.72
8
Proof of concept
facilities
11 27 19 6 6 69 2.55

190

Statistic
Regulatory support for IND/IDE submissions
GLP capabilities for animal trials
Business Incubator facilities
Laboratory Incubator facilities
Manufacturing facilities under GMP for
clinical trials
Funding for developmental activities from
within the university (ex.Accelerator funds)
Phase I clinical trial capabilities
Proof of concept facilities
Min Value 1 1 1 1 1 1 1 1
Max Value 5 5 5 5 5 5 5 5
Mean 3.68 2.93 2.37 2.35 3.50 2.97 2.72 2.55
Variance 0.73 1.14 1.01 1.07 0.85 1.24 1.31 1.28
Standard Deviation 0.85 1.07 1.01 1.03 0.92 1.11 1.14 1.13
Total Responses 68 68 68 68 68 67 68 69

191
4. Using the sliding scale below (click and drag) please indicate the importance of
each of the following support services to medical product development by the
university past the discovery phase:

# Answer
Min
Value
Max
Value
Average
Value
Standard
Deviation Responses
1
Regulatory support for IND/IDE
submissions
0 100 33.94 28.51 53
2 GLP capabilities for animal trials 0 100 48.39 30.75 57
3 Business Incubator facilities 0 100 39.93 28.34 56
7 Laboratory Incubator facilities 0 100 48.66 27.79 58
4
Manufacturing facilities under
GMP for clinical trials
0 87 27.40 24.93 52
5
Funding for developmental
activities from within the
university (ex. Accelerator funds)
0 100 60.52 29.43 63
6 Phase I clinical trial capabilities 0 100 50.31 27.85 54
8 Proof of concept facilities 0 100 59.79 32.48 63

192
5. Are there any elements in the current university technology transfer models that
you consider to be impediments to university-industry interaction?

# Answer Response %
1 Yes
52 74%
3 No
10 14%
2 No opinion

8 11%
Total 70 100%

Statistic Value
Min Value 1
Max Value 3
Mean 1.40
Variance 0.53
Standard Deviation 0.73
Total Responses 70

193
6. If you answered yes to the question above can you please explain what it is that
you see as an impediment to university-industry interaction?

Text Response
No motivation/incentive for universities to monetize or capitalize their discoveries. Leads
to a lack of urgency and lack of accountability for activities that could generate significant
revenues for the university.
Universities are more frequently needing participation in downstream rights that is beyond
simple royalties and includes sharing milestones, sublicense fees, etc. As a small biotech
company where we intend to find a larger partner for development and commercialization,
this means multiple splitting up of the pie and makes the overall licensing from the
University less attractive. One can make an argument that Universities are moving toward
a model of obtaining returns that a privately funded company would expect for their
innovations, except the University uses public money to fund their innovation.
The interface between academic labs and business, such as venture capital, remains a
challenge. Universities need someone to explain all the requirements for drug discovery
and development, and why an academic lab needs a business person to facilitate acquiring
the resources required.
Unrealistic valuation of technology by the technology transfer office. Failure to take
serious inquiries seriously. Too little vetting of technology offers (low signal to noise ratio,
too many offers of weak technologies.
Legal negotiations on contracts/royalties belie a lack of undrstanding that the major work
& investment in getting a therapy to market is done after the proof of concept stage
lack of funding, long negotiation time or onerous requirements, upfront payments in
contracts
Universities in my view tend to overestimate the value of early stage programs. My
statement is based on the historically high attrition rates seen for pre-proof of concept
programs. In many cases this has inhibited initiating early stage collaborations.
Lack of resources, both financial and personnel, have impeded past opportunities. The
lack of understanding by academia of industry has also limited the success we've found
when working with universities; while we haven't needed regulatory support from the
universities, it would have been helpful for someone to have understood our regulatory
path and related needs from the academic research team.
1. Universities have difficulties assessing the most promising opportunities for further
development (it is not easy and they are stretched thin across many activities). 2. There is
not enough funding for critical animal experiments, production of molecules for those
experiments, pk studies that can take a possibility and demonstrate its practicality to a
potential partner.

194
Universities are slow to respond - it can take many months, if not years to get license
agreements in place. Also, most univerisities do not have a budget for marketing their
technologies.
Too often the TTO feels the 'need' to make sure and extract the most out of the industry in
terms of payment. My experience has been that when a scientist/entrepreneur wants to
license some IP to a pharma, the TTO is worried that the pharma is trying to 'screw' the
university-- and, the reality is that IP covering early stage discoveries has very little value.
It is true that these inventions may be of value but that will require years of work and the
probability of success is very small. Thus it is quite frequent that the university TTO
greatly prolongs the process for no good reason (sorry about the rambling quality of this
response).
Lack of GMP compliant facilities
over-valuation of IP, lack of undestandingof translation, over-empahsis on profit motive vs
public health, failure to work efecitvely with their investigators
unclear understanding of valuation metrics resulting in mismatch of expectations.
University often over value the wrong things and miss opportunities to partner for success-
building long term relationships to foster education would be a terrific idea.
Publications : inventors want to publish data that shall be confidential for some time due to
IP issues Royalties : requierements for royalty payments can be too high for early stage
programs Back ups : access to back ups is sometime restricted or submitted to contarins
by the inventors
Onerous negotiation times, naively high valuation of early stage assets, lack of
understanding of the difference between evaluation stage by industry and commercial
development, overly optimistic idea of weighting of upfront v. milestone payments
Mandatory overhead charges unrelated to nature and scope of work. Cumbersome
(complex and/or time consuming) approval processes Cumbersome documentation
(contract) processes Lack of transparency on process(es) for approval and documentation
Lack of flexibility on intellecutal property and publishing
IP negotiations can take forever. If a pharma company has invested years of work to
discover a molecule, then it is not reasonable for the university to claim all IP that is
generated as part of a collaboration. The inability of some university tech transfer offices
to distinguish IP coming into the university from that going out of the university can be a
significant impediment to collaboration.
Over estimation of the value of inventions leading to long or failed negotiations for use.
The University does not seem to embrace the concept of time. Project timelines are
undefined and when defined are not meet.

195
The IP reach-through often precludes the licensing of assays, animal models or other tools
to industry for use in drug development.
Lack of understanding of industry;s requirements. Most assets coming out of university
have little value for the industry because 1) experiments are not controlled, reproducible,
etc. and/or 2) early publication weakened the patents.
University places too much value/restriction on 'Concept', with little or no appreciation of
the attrition risks faced by industry. University offices too slow, too regimented/inflexible
in dealing with variables in negotiations.
My perception is that the Universities are not in touch with the real world; they continue to
stay behind.
Failure to agree on legal language
Over estimating value of University IP, unrealistic expectations around potential royalty
artes and lack of flexibility around IP ownership and contractual terms
UTT offices mostly try to cell patents when companies are interested in a product that is
built with a patent portfolio and the value of the complete package is much more than bits
and pieces. Most of the people in UTTs do not understand the needs of the business,
specially in a start-up phase.
There is insufficient awareness of the value a university-industry relationship can provide
to a company's technology/product development program. Perhaps universities need more
effective means to contact target companies (with respect to common science, technology,
engineering and/or clinical strenghts) and propose collaboration opportunities.
Manufacturers who would use a university's GLP, pre-clinical, clinical or manufacturing
services would need to know that the activities would be found compliant with applicable
regulations if inspected by FDA or other regulatory bodies. Another impediment could be
logistical issues such as distances between sites that would be perceived as hampering
communication and productivity. There are ways to overcome this but these are likely not
well-understood by potential industry partners.
General lack of knowledge of what is necessary for success in inductry; lack of funding for
tech transfer offices which prevents usefull and timely interactions; ;lack of IP support (no
money to pursue)
Transparency to work under way and status/progress updates.
Administrative time delay
It totally depends on the institution. Some have weak or have no TT models -- this can be
the kiss of death. Some are too stingy, reducing incentives. Many are underfunded and
allow opportunities to languish or pass them up entirely.
in ability to realistically value the technology and under estimation of what is involved in
commercialization of such

196
Universities view the value of their IP license too high early on and want upfronts and
early milestones which are not consistent with the risk which a company, especially a
smaller start-up/entrepreneurialcompany, is taking to try and develop it. Also, universities
have a hard time valuing the need for the company to obtain additional licenses to unblock
the IP
people on staff in the Tech transfer office are poorly trained at best and incompetent at
worst.
The amount that the university expects to share with the company that is funding the
research is often times unrealistic and does not reflect the significant risk to pre-clinical or
early clinical drug candidates and the significant financial expenditure by companys
involved in the development side. The time to get university agreement on contracts can
go on for months, sometimes approaching years. Then there is the GXP (GLP, GMP,
GLP) compliance issues which the company must meet global standards.

In one case, our company was able to have a university research group (CR-UK) fund a
"pilot" study in the UK and take full responsibilty for the study, but only had publishing
rights vs patent rights and financial reimbursement post-P2 study.
Process-oriented culture (vs. prioritizing closing deals) Suspicious to slightly hostile
attitude toward entrepreneurs (vs. being welcoming and serving as a good host)
Over valuation of assests. Under valuation of needed additional effort/investment to IND.
Very heterogenous quality of tech transfer officers Bayh–Dole Act often puts University
and investigaotrs add odds with incongruent incentives/fears
Universities do not package the "idea" in a way that allows a businessman to assess
product feasibility. Aside from technical cleverness, the idea needs to be packaged within
the context of IP protection ('s do OK here), manufacturability, market/customer fit,
development cost, reg. plan, development schedule. U's need to emulate what an internal
company R&D group would need to do to sell their "idea" to management.
University tech transfer groups often do not approach dealing with industry from a realistic
view point. There needs to be a better undeerstanding from the univetrsity position
regarding business and how best to negotiate a tech transfer deal with bujsiness.
- Personnel - less than experienced personnel in the Tech Transfer Office - Difficulty in
doing deals - rigid - risk adverse - prefer to own 100% of nothing - Many layers of
approval - limited funds for patenting

197
Most Univ Tech transfer organizations have no concept of the actual costs/risks in bringing
medical device products to market. They have completely unrealistic valuations for very
early stage technology, want excessive money up front, and payments throughout a
project. They are staffed with people without any real world experience and are focused
soley on IP. I have had Univeristy tech transfer staff tell me with a straight face their
technology (not even a product yet) warrants a 40% royalty rate!!! I explained that I
would have to invest $5M to bring it to market. The product ASP would be approx
$250/unit. The COGS would be 30% or $75/unit. The distribution costs are 35% or
$87.50/unit, and their desired royalty is $100/unit. This leaves the company who is
assuming all risk along with the $5M investment, -$12.5/unit! I told them you can get a
better ROI on the $5M by investing in a bond! When faced with facts and supporting
documents, they refused to modify their position and simply stated my distribution costs
and COGS are too high. Needless to say, I did not sign a license agreement! I bring this
up, because this is not a unique situation. It demonstrates a fundemental lack of
knowledge about the costs associated with product development, gaining regulatory
approval, manufacturing and distribution, and the profit margins necessary to fund future
development. This is not completely the Tech transfer department's issue and is systemic
because this type of effort is not a core competency within Universities. The job of
Universities is to educate students and conduct research. The vast, vast majority of
Professors have no experience in these matters as well, so they cannot advise their Tech
transfer departments in any substantive manner. Even those professors who have
"industrial" experience through consultant agreements have no real experience in these
matters. They are paid to consult, not create a Design History File (DHF) for a regulatory
submission.

They have never had to put in place and maintain a quality system to enable a company to
maintain regulatory compliance and pass ISO certification. Most academic animal
laboratories would be shocked at the costs associated with conducting and maintaining
GLP practices within their facility. Academic animal labs are under severe funding
pressure. Where are they going to find the money to maintain this infrastructure? The
question becomes, what should Universities do? Fundementally, they must recognize that
the earlier the technology, the more back loaded and lower the financials should become.
This is a risk based approach any company will understand. The further along in the
product development cycle the technology/product is, the more they can ask for up front.
While this is simple and intuitive, it is not commonly adopted. Given the costs, profit
margins, infrastructure requirements, and core competencies involved, I would argue
Universities should NEVER compete directly with Industry in producing product. There is
very little likelihood they will be able to do it faster and/or better. The same can be said in
reverse. Industry is not in the business of basic science. We cannot assume the risk or the
timelines. Universities should focus on IP, proof of concept, and early non-GLP/pre-
clinical animal work as a means to find a venue for their technology to be commercialized.

198
Complicated and expensive IP licensing. Slow and bureaucratic decision process.
Difficulty in maintaining confidentiality. Pressure to publish. Lack of funding to cover the
gap between invention and establishing commercial feasibility. Not being able to afford or
obtain high quality IP prosecution. In the present ecomomy investors are relucltant to
invest in early stage technology. The successful venture capital firms have become very
large funds and do not find it economical to make the small investments required by start-
ups. All of the universities I have talked with are struggling with the issue of tech
transfer because they really need the income successful transfer would generate. In my
view this process should be managed by an independent organization staffed with
professionals, with a seed fund and the authority to handle the relationship between
industry and the University.
Depends on the particular Tech Transfer office. Some are geared to helping but others
make the contracting and fee structure so onerous that it becomes a serious block.
Excessive royalty expectations, particuarly for exclusive licenses
University administrations can be too greedy ... too bureaucratic
Unreasonable expectations regarding intellectual property and finances.
Who owns IP from work that is conducted within the university but funded by the
company. USC has been reasonable about this but the UC system is aweful to deal with.
The realization that IP can't always be controlled by the University.
Intellectual property position of Universities
Stanglehold on IP; licensing of IP is too costly and overly burdensome in time and money
In most cases Universities have an inflated view of their technology and are inexperienced
in negotiation.
The majority of IP from universities for therapeutics is of very limited value to industry as
such. The targets and IP around them are just the beginning of the drug discovery process
so we are more interested in collaborating to access expertise than to license IP. Many tech
transfer offices clearly are incentivized to sell the IP, not think outside the box for other
arrangements. It is a slightly different story for technologies, especially for diagnostics. In
that case, industry is sometimes happy to exclusively licence IP. Also, the lack of
understanding of drug dev't from the tech transfer side can create unrealistic expectations
regarding deal structure.

Statistic Value
Total Responses 53

199
7. What is the importance of the proximity of the university (same city) in the
decision making process when selecting a university with whom your might partner?

# Answer Response %
1 Very important
7 10%
2 Fairly Important
22 31%
3 Not important

41 59%
Total 70 100%

Statistic Value
Min Value 1
Max Value 3
Mean 2.49
Variance 0.46
Standard Deviation 0.68
Total Responses 70

200
8. Please rank the following stages in the product development life cycle that your
company/research foundation prefers to get involved with a university researcher
(click and drag to move ranking)?

# Answer 1 2 3 4 5 6 7 Responses
1 Conceptual Stage 20 8 8 5 4 11 6 62
2 Discovery 7 24 9 8 3 3 8 62
3 Proof of Concept 23 8 21 4 5 0 1 62
4 GLP Animal Studies 4 13 6 26 4 3 6 62
5 Phase 1 clinical studies 4 4 10 11 31 1 1 62
6 Phase 2 clinical trials 0 5 5 7 8 37 0 62
7 Phase 3 clinical trials 4 0 3 1 7 7 40 62
Total 62 62 62 62 62 62 62 -

Statistic
Conceptual
Stage Discovery
Proof of
Concept
GLP
Animal
Studies
Phase 1
clinical
studies
Phase 2
clinical
trials
Phase 3
clinical
trials
Min Value 1 1 1 1 1 2 1
Max Value 7 7 7 7 7 6 7
Mean 3.35 3.27 2.42 3.74 4.10 5.08 6.03
Variance 4.86 3.64 1.95 2.62 1.73 1.78 2.92
Standard
Deviation
2.20 1.91 1.40 1.62 1.31 1.33 1.71
Total
Responses
62 62 62 62 62 62 62

201
9. Please indicate the importance of the following factors in improving the
relationship between industry and universities (click and drag).

# Answer
Min
Value
Max
Value
Average
Value
Standard
Deviation Responses
1
Better understanding of how
a given technology will
benefit the industrial partner
8 100 70.74 22.54 68
2
Increased support and
education of university
researchers wrt the tech
transfer and development
path
5 100 66.10 24.18 67
3
Streamlining of bureaucracy
involved in negotiation with
universities
10 100 81.46 23.10 69
4
Increased access to
researchers and improved
visibility of university
research projects
1 100 61.65 26.17 66
5
Enhancement of an
innovation culture at all
levels of university
administration
1 100 63.78 27.71 65

202
10. Does your corporate strategy include an increased role for university research?

# Answer Response %
1 Yes

39 57%
3 No
23 33%
2 Do not know
7 10%
Total 69 100%

Statistic Value
Min Value 1
Max Value 3
Mean 1.77
Variance 0.86
Standard Deviation 0.93
Total Responses 69

203
11. If you answered Yes to the question above, will your company's/research
foundation's corporate budget allocate additional resources for working with
universities?

# Answer Response %
1 Definitely will not
1 2%
2 Probably will not
5 11%
3 Don't know
8 18%
4 Probably will
21 48%
5 Definitely will
9 20%
Total 44 100%

Statistic Value
Min Value 1
Max Value 5
Mean 3.73
Variance 0.99
Standard Deviation 1.00
Total Responses 44

204
12. If you answered Yes to the question above, does your company's/research
foundation's increased interaction with university researchers focus mainly on US
universities?

# Answer Response %
1 Yes
21 50%
2 No
17 40%
3 Do not know
4 10%
Total 42 100%

Statistic Value
Min Value 1
Max Value 3
Mean 1.60
Variance 0.44
Standard Deviation 0.66
Total Responses 42

205
13. If you answered No to the above question, please rank the other geographic
regions that your company will be concentrating on Click and drag to move ranking).

# Answer 1 2 3 4 5 Responses
1 Europe 16 8 0 4 0 28
2 Asia Pacific 3 14 9 2 0 28
3 China 7 4 12 4 1 28
4 South America 1 2 5 17 3 28
5
Other (Please indicate which country
below)
1 0 2 1 24 28
Total 28 28 28 28 28 -

Other (Please indicate which country below)
Canada
Middle East
Canada
Australia, Canada
Canada, Australia

Statistic Europe
Asia
Pacific China
South
America
Other (Please indicate
which country below)
Min Value 1 1 1 1 1
Max Value 4 4 5 5 5
Mean 1.71 2.36 2.57 3.68 4.68
Variance 1.10 0.61 1.29 0.82 0.82
Standard
Deviation
1.05 0.78 1.14 0.90 0.90
Total
Responses
28 28 28 28 28

206
14. Which of the the following roles do you see US universities playing in your
company's/research foundation's long-term R&D plans?

# Answer Response %
1 Research partners on specific projects
42 61%
2
A source of new technologies to add to
your company's development pipeline

44 64%
3
Development of spin-off companies for
possible acquisition

10 14%
5 All of the above
22 32%
4 Other (Please explain below)
3 4%

Other (Please explain below)
consultants, advisors
Providing expert preclinical testing and preclinical and clinical consultation
NA-We are consultants

Statistic Value
Min Value 1
Max Value 5
Total Responses 69

207
15. If you feel that one university in the US does an outstanding job of technology
transfer, can you identify that university and explain why?

Text Response
Stanford University...has specific goals to attempt to translate research into commercially
viable products. Has a streamlined tech transfer system.
University of Pittsburgh OTL Tech transfer office headed by a person coming out of
industry (which is rare, usually it goes the other way) and this has helped foster an
entrepeneurial culture and has reached out to industry.
UCSF and Stanford. Outreach to the community. Track record of doing it. Sensible
financial expectations. Empowers their own researchers.
I've had good dealings with Johns Hopkins and Caltech, they were open about their
procedures and tried to help get the deal done.
Univ Penn / Wharton - has specific offices on tech transfer, has broad outreach programs
that highlight its research programs
my sample size is modest and all have faults
No one stands out. I would bucket based on tiers of academic excellence. In many cases
the better universities are more problematic in terms of finalizing agreements.
N/A.
Stanford can offer great flexibility with terms that are palatable to commercial partners,
such as Commercially Reasonable Efforts for diligence.
MIT - they aggressively market their capabilities, network with the venture community
and they are very responsive during agreement negotiation.
n/a
MIT- long history of interaction with investors and sponsors. Strong team
Harvard University : they are very active in partering / put licensing, the team is very
professional, an organization / grant has been created to promote interesting and valuable
programs, the quality of science is excellent.
Stanford University: an understanding of the difference between the advantages and goals
of industry v. academia; founders who understand their best role is as a technology or asset
expert, not a business expert;
University of Nebraska odes a good job of choping their products and helping to move the
process along.

208
Columbia University. They have been very reasonable and knowledgeable about how to
partner with industry, and have been very responsive vs the usual slow process.
MIT is really good at understanding what characteristics the technology should have to
attract buyers and does an even better job at bringing in industry to help design/develop
those technologies. Technology transfer, for MIT, means monetizing the value of their
hard earned research to bring value to society, not an individual professor trying to make a
name for him/herself.
no
UCI - they seem to be more in touch with business needs
Harvard have a critical mass of scientists and work well across disciplines
Stanford. number of startups tell the story.
M.I.T.: I am most aware of this institution's tech transfer based on news media coverage of
ideas and products generated by students that become commercialized by acquiring
companies. It's as if M.I.T. has programs that foster innovation consistently leading to
novel technologies and products that are attractive for acquisition, futher development and
commercialization.
University of Varginia. Most frequent successful interations based upon visibility to
technology and evident investment in areas of common interest.
University of Michigan; proven track record
They have all been difficult in different ways. Getting agreements signed and initiated can
be difficult to manage within annual budget cycles. A better appreciation for how industry
prioritizes and budgets its research is warranted.
University of Florida Gatorade
they all have their issues
University of Florida. Know how to structure win/win deals and is willing to wait for
monetary gain until later in development cycle
Stanford University and they have been the lead for decades.
UCSD
MIT
Rutgers. They want to work with you.

209
University of California (collectively) are pretty good. Responsive, realistic, and one
agreement with "headquarters" goes a long way to serve as a template for all the campuses.
Gladstone Institue and U of Maryland are horrible.
There may be some but I have not experienced same
Standord University. They have a well run mechanism to preview technology (internet
based) and have simple boiler plate contracts.
Stanford has probably the best reputation. In my estimation itis because many years go
their pension fund manager elected to invest a small percentage of pension funds in
university start-ups. Companies like Genentech resulted
none come to mind
University of Virginia, because they have a group that proactively reached out to industry
with ideas
UCSF. Understands business.
none are really good at it
Not aware of any that would be considered outstanding
Harvard, MIT, Stanford - all have excellent tech transfer offices and have a high degree of
sophistication working with industry.
University of Wisconsin: They have an organization set up t mamage tech transfer that is
experienced and real world.
QB3 (representing UCSF, UCB, and UCSC) and the Stevens Institute are the top two
offices I've dealt with for tech transfer. Neither one is a straight tech transfer office. Both
support entrepreneurs with education, foster innovation, and have highly skilled
individuals with industry experience working more as business dev't instead of regular tech
transfer. The other institute with a similarly high level of understanding of industry is the
Sanford Burnham which additionally has some capabilities for early drug discovery.

Statistic Value
Total Responses 44

210
16. If you feel that one university outside of the US does an outstanding job of
technology transfer, can you identify which university and explain why?

Text Response
As above
N/A.
U of Manchester has historically been very flexible and attuned to industry.
n/a
Singapore
Imperial College London : the quality of science is excellent, they are very active in
partering / put licensing.
NA
I can't think of one at the moment
no
Dundee have world class scientists in biological sciences and they are industry friendly
Discussions and particularly contractual negotations with UK universities in general are
generally more smooth than with US
Years ago, I was aware of a university in Utrecht, The Netherlands, that throught their
involvement in consensus standards work (e.g. sterilization) and research in product
sterilization, had a profound impact on sterilization practices and regulation. I don't have
sufficient experience with any one university O.U.S.; however, my impression of
European institutions is that the staff interacts much more closely with industry on
scientific collaboration. Similarly, our O.U.S. research sites appear to have a much greater
degree of contact with universities and rely more heavily on them for technical and
laboratory testing support.
Cranfield University, UK. Most frequent successful intereactions based upon visibility to
technology and evident investment in areas of common interest.
Do not have any answer
they all have their issues
Don't know

211
Cancer Research UK - funded studies on a new oncology drug, but took industry to
identify how to actually use the drug to be commercially successful. The drug actually
was kept "on the shelf" for years before industry had access to it to start to understand how
to actually make it work. CRUK has a full time development group, including a
pharmaceutical regulatory oversight group that is fully versed in their regional regulatory
requirements, including complete compliance with their regional GXP requirements and
actually manage ALL of the EU/CA interactions, including CTA/IMPD submissions as
well as safety reporting.
University College London
Imperial College London
No
none come to mind
No company is unique
have had no experience outside US
Same as above

Statistic Value
Total Responses 24

212
17. What are the biggest pros and cons about working with universities in the
development of new medical products?

Text Response
Pros: knowledge and passion about the subject matter Cons: Lack of understanding about
the product development/commercialization process for new products.
pros - source of new ideas for driving early stage innovation - leverage existing facilities
and equipment - capital efficient workforce cons - handling novel IP that is not
contimplated at the beginning of the collaboration - facilities are good for Discovery type
work, but not suitable for regulated activities (i.e GLP/GMP) - work force is typically
inexperienced and transient
Pros: innovation Cons: they view biotech/pharma as an endless ATM.
Pro - Great new technology being developed. Con - Awkward interface between business
office and academic lab, hinders setting up a deal.
Pro: creative thinking, deep expertise in advanced fields. Con: Prima donna culture
Pro - a forum for spontaneous idea generation that supports the strategic defined remit of
companies - the two are complimentary. Con - lack of understaning of what it takes to get
a product to market to return on the investment makes negotiations difficult.
pros - ability to shape product profile and development strategy, access to experts cons -
tech transfer office staffed with people who have never had operational experience.
Pro include: Access to Innovative programs and cutting edge technologies, Strong subject
matter expertise. Cons include an unrealistic assessment about the value of programs at
the early stage i.e. how much effort will be need to take these ideas and concepts and
develop them into a product concept and product.
Pros: working with individuals who understand science/research (and who understand the
importance of good science), who think outside the box, and are not constrained to think in
terms of budget/business/BOD. Cons: individuals not having an appreciation for industry
needs and the overall business development path, individuals who lack regulatory
understanding and what is needed to get products approved.
Great science, but not focused on drug development. Differences in motivation.
Pros include ability to access technology at an early stage, chance for government funding
of research programs Cons include lack of understanding of drug development process
and lack of a sense of urgency.
pros- lots of smart, innovative scientists cons- not 'geared' to working with pharma.
scientists normally focused on grants and administration (tech transfer) not always
understanding of pharma's goals/objectives/procedures.

213
innovation, access to patients
pro- innovation and access to talent (post docs and grad students) cons- lack of
organizational experience and cost relative to alternatives.
pros : innovation, excellente science, expertise in the filed, availability of new ideas cons :
sometimes too academic, no experience in drug development, need for publications can
create conflicts due to need from industry to file patents
Pros: public funding of early stage, high risk research Cons: lack of understanding of the
relatively small resource contribution of early stage, high risk research to commercial
development; difficult tech transfer offices, investigators that are too personally tied to
their technologies rather than the goal of commercial development (e.g. their particular
compound v. an effective treatment for disease); lengthy publication cycles that prevent
early access to data
Pros: Opinion leaders and other domain expertise in one location. Sometimes very useful
"brand" for credibility. Can be a center of excellence in a therapeutic areas or procedure
and therefore have a good pool of patients for clinical trials. Cons:
Procedures/process/timelines for getting to an agreement to do work; lack of urgency on
timelines and deliverables.
Pro: Innovation, creativity, fresh new science Con: unrealistic tech transfer; lack of
understanding that the conception is just the first step on a very long and expensive road
Intelligent, creative investigators
Con- too slow PRO-They are willing to stick with assets when the returns are low for
years in some cases tha later on do well.
Pro: new product/technology Con: Ownership
The biggest con is slowness. The biggest pro is access to novel technology.
University professors don't generally understand industry drug development. Universities
should bring, on staff or contract, a multidisciplinary group very experienced in drug
development to support researchers in their efforts. In that way, universities will maximize
the value of the technologies and reduce the legal expense of filing patents on research that
has little chance to get commercialized.
Pro - source of new science, scientific discovery Con - inflexible, rigid, slow
Universities have their own priorities including uncertainty of keeping graduate students
on the project. It becomes more of a hit-or-miss situation. On the pro-side, there is much
more creative thinking, faster action and sometimes less cmpany politics.
Lack of understanding as to what it takes to develop a druggable molecule Time taken to
negotiate the contract

214
pros - Access to new skills, technologies,key expertise and new ways of working. Cons are
unrealistic exopecations, possible lack of focus on end producvt and lenghty negotiation
period. Loking at ways we can model relationships where both risk and reward are more
shared.
IP protection and management, profs are paid and evaluated on number of published
research and not getting patents and building a IP portfolio. Misaligned compensation.
They are not trained to think product development. Sloppy time lines and grant report
attitude vs timed product development. Discipline and mindset issue.
PROs: There is, among university research programs, a broad diversity of research
activites much broader in scope than any one company could possibily pursue. A
university's research into a niche area of medicine, for example, could be beyond the scope
of a "generalist" manufacturer; however, the niche research could support a new medical
product with a broad range of clinical indications. Also, universities might not be under as
great pressure as industry researchers to "fail early, fail fast" given that some research
might be part of a graduate student's thesis program. CONs: I suspect that industry R&D
management likes to have tight control of research activites, and not having a "man in the
plant" who is directly involved with the research that is being conducted on behalf of the
company. A "reverse intern" program might help whereby a company researcher spends a
few months at the university and collaborates on the research.
unwarranted financial expectations both in time and money
Work is typically focused in early discovery and needs substantial further
development/maturation to reduce risk and increase value. Commercial forethought.
Cons: Adminstrative time delay Unrealistic milestones Pros: synergy
Our focus with universities mainly involves clinical validation of prospective diagnostic
assays. We typically develop the assays and they provide the samples, sometimes
including on-site preanalytical lab work. In this regard, university collaboration is
essential for our development of new diagnostic tests. As stated earlier, unpredictable
delays in getting agreements signed and initiated can be very frustrating, especially for our
internal resource allocation.
Pros- they sometimes don't know/appreciate what they have Cons- they sometimes
overstate the value of what they have
early access to IP and ability to shape early research through sponsored research
Except for some innovative ideas, working with universities is too cumbersome versus
working with other entities (gov't labs; incubator businesses). In short most university
researchers and tech transfer offices inflate the value of their asset when licensing and
want too many restrictive terms
Pro - innovative ideas, new approaches developed Con - lack of understanding on what it
takes to develop a therapeutic

215
Pros - great on-site equipment for testing devices Cons - very restrictive ownership rights
to transfered technologies, glacial pace of getting any contracts executed
How much they want to be directly involved in the pivotal development clinical trials or
manufacturing vs a resource of new development leads.
Pro: cutting edge medicine/science Con: total lack of understanding of development
process
Cons: Many of the observations don't withstand the rigor/QC needed to make a drug.
Unrealistic expectations for time and money Pros: Innovation
Pro - New ideas, leverage infrastructure Con - Inability to get on same "develpment"
page (not research)
Not understanding the differences between industrial science and academic science and
impact on a development project. ess. Not having a business view of the needs of a
product development process. Lack of sensitivity to industry time lines and scheduling.
Being a source for innovative ideas and new science.
Pros - Clinician input in identifying unmet clinical needs; specific research skills; source of
product concepts Cons - TechTranfer offices are very difficult to work with
Pro's - lots of new ideas Con's - bureaucracy, costs
Pro: Large source of technology with wide applications Cons: They don't know what they
don't know.
It is potentially an enormous source of new product ideas supported primarily by
government grants. I have already mentioned the problems
Pro - new technologies and new ideas Cons - expectation of up front fees associated
with transfer and the legal expenses associated with the process
Excessive expectations for financial comittments for medical devices given the early stage
of development.
PROS: Cost sharing until private capital available Opportunity to build value in
technology CONS: Bureaucratic negotiations for rights to technology
Pros - Strong academic and intellectual mindset Cons - Limited business understanding
Pros - state of the art discovery research and mechanisms of action analyses Cons - lack of
understanding around product development to meet regulatory challenges and market
demands.
Pros - access to the latest technology, and eager students Cons- bureaucracy! ..academic
approaches which are not feasible to manufacturing (COGS)

216
Ip, confidentiality, and indirects all cons Pros are bench to bedside potential
Cons: IP position that universities take Pro: capability of "out of the box" thinking
The biggest factor against working with universities is ownership of IP and the expense of
licensing. Addtionally, in a development project academic research is often slow, and
student researchers are in a learning mode. technical solutions are not always practical.
Universities underestimate the time and resources required for completion of development
and the regulatory process. On the plus side, the technology is advanced and creative -
well beyond the scope of the typical industrial 'boxed" in approaches. Working with
students in invigorating and good for the 'soul".
Pro: they often have the resources to perform complex studies Con: they are typically
unable to stay on a time table or within budget. Con: if they invent anything they end up
owning the technology. Con: If the technology is theirs to start with the licensing fees kill
small companies.
Depends on how you define development. In terms of collaborating, the biggest plus is
access to individuals who have a deep understanding of the biology which we simply can
not support fiscally in-house in industry. The biggest con is that it can be difficult to keep
the university partner focused on goals and deliverables. The latter is not always the case,
but frequently the researcher has their own strong agenda and would like to spend
time/money pursuing things that are of tangential interest to the industry partner.

Statistic Value
Total Responses 58

217
18. There is a need for a change in the way in which universities and industry
interact. Do you agree with this statement?

# Answer Response %
1 Strongly Disagree
3 4%
2 Disagree
1 1%
3 Neither Agree nor Disagree

6 9%
4 Agree
39 56%
5 Strongly Agree
21 30%
Total 70 100%

Statistic Value
Min Value 1
Max Value 5
Mean 4.06
Variance 0.84
Standard Deviation 0.92
Total Responses 70

218
19. What if anything would you like to see universities do differently?

Text Response
Create proper incentives in a systematic way to encourage the transfer from laboratory to
industry. Most are haphazard in their approach and don't appear to treat tech transfer as an
important function.
Invite scientists from industry to present seminars and participate in open forum meetings.
When I was a graduate student at Berkeley, the only seminar speakers were from
academia. Most of the Ph.D.s and Post-docs never get to interact with industry scientists
until they are out looking for a job.
Recruit more ex-industry people to work in their business office to facilitate tech. transfer.
1. Strengthen tech transfer offices to better vett opportunities, negotiate more realistically
and professionally. 2. Encourage and support students in considering careers in industrial
science. 3. Don't spin out companies which don't have a chance. 4. Star faculty need to
take themselves less seriously.
Yes, there is much more potential to enhance the interaction toward better and more
efficient design of new medicines
lower upfronts and more financial support during valley of death phase pre support from
VCs and companies
Universities need to be run more like a business; strategic goals, trained personnel, better
organization.
More interactions to get advice from industry. More selectivity in what is pitched, so that
the attentions are focused.
should have a core group focusing on external relationships. this group should have broad
experience and support from the university.
focus on discovering and validating new targets, pathways; better understand human
disease pathogenesis foucs on proof of priniciple, proof of concept
Professionalize activities, including IP. Develop long term and stronger relationships with
sponsors. Think about co investment of capital
get a better understanding of the inducstry needs in terms of intellectul property and
manufacturing, more flexibility in the licensing deals
Change the paradigm for rewarding investigators to include research that can lead to new
drugs/devices/technologies rather than just publications Establish boilerplate, accessible
agreements for early stage evaluation MTAs, more standardized licensing terms to
accelerate the use of new discoveries by industry

219
There should not be an "us vs. them" philosophy. Just because an organization or an
individual is industrial or "for profit" does not make their motives suspect. Universities in
general should make it easier for collaboration at the level of the individual investigator,
clinician or lab.
Focus on speed to completing negotiations. Focus on identification of key decision-
makers who can respond to tech transfer initiatives quickly and conclusively.
1. Focus on strategies that maximize the utilization (vs. expected value) of government
funded research. 2. Adopt policies to facilitate "pre-competitive" (ie, likely to be of low
commercial value) tech transfer to industry. 3. More realistic assessment of commercial
value of inventions may facilitate both of the foregoing.
Partner early and establish a family approach to shoping assets to a set group of partner
companies.
Sponsership of the graduate students program---timing and publication
Add experienced drug developers to TTO or create a proof of concept group that supports
the researchers. This group CAN NOT be people from big pharma who spend 10% of
their time helping or are volunteers. These need to be paid individuals whose job is to
advance technologies to partnering.
Understand business
Get off the pedestal - get real! Get away from Ph. D. (bow-tie) mentality. Hire
experienced people from the industry with product development experience - regardless of
their highest degree.
Universities need to take a more realistic view of what they have to offer and the time
taken to take a molecule to market.
Educate the faculty and researchers in product development methodologies and discipline.
Increase communication of available opportunities; validate areas of expertise via
certifications, inspections, third-party audits; assure that processes for arriving at
consulting an collaboration agreements are not onerous.
recognize their shortcomings in this area; if they wnat to profit from this approach they
need to invest in it
Adopt a more prgamatic and commercial orientation - parhaps even aligning University
Business School efforts w/ technology development efforts.
More flexibility for achieving translation from research to product
Hands off equity

220
invest in gaining an understanding of the development and commercialization issues of the
technology they seek to outlicense so that a more realistic understanding of value and
shared risk can be negotiated; seek a win-win solution, don't worry about whether you will
look like an idiot if you miss the next "Apple" or medical breakthrough technology; realize
that MOST of what you patent/file is NOT going to ever reach successful commercial
maturity.
recognize that loosing some technologies/revenues in the interest of getting a lot more is
better than being so restrictive that you neither loose nor gain anything.
Better understand industry's goals and development process
Hire top flight tech transfer staff with industrial experience and empower them. Bridge the
divide between business/legal and science/technology
Understand the entire medical product development and commeercialization process more
fully.
Change the culture of Tech Transfer; Provide support - IP (FTO and novelty), regulatory,
reimbursement assistance; Reward faculty inventors more generously and not use
proceeds as a means to operate ineffective tech transfer offices.
Hire people with industrial experience to guide their internal decision making. IP is just
one facet of product development and tech transfer.
I discussed this in a previous block. However this is a complicated issue that cannot be
covered in a few sentenses. I would be pleased to discuss this matter with you at your
convenience.
Streamlined process with expectations for financial reward from royalty on revenue
generation of technology rather than licensing fees
More creative licensing stratgies that minimize upfront financial committments to
universitiies that incentivize companies to commercialize technology.
Need to be more proactive in reaching out, especially for intellectual property
Get away from the idea that universities should be profit centers.
Better tech transfer offices particularly around compnay funded work at the university and
IP
Better VPR's more in tune with the realities of industry interactions Better ip policy that
does not try to claim ownership of industry ip
Develop greater business awareness of how to work with industry and what industry needs
re: innovation.

221
I am not sure how to answer this. Many of the UC campuses have reached out to industry
and that is a good beginning. However, researchers do not necessarily have a good
appreciation for the arduous development and regulatory pathways. Their understanding is
often too simplistic and naive.
They need to focus on translational research and hire successful staff who are capable of
guiding such projects from industry. We are beginning to see translational research
institutes being developed by academic organizations but in most cases they are just
paying lip service to the use of the term translational research by the NIH.
I like what I am seeing as a general trend for universities to have
commercialization/innovation centers staffed with former industry people. It's especially
helpful when the university individuals are well-versed in the technologies that have been
developed at the university and can respond to queries specifying needs/wants of a
potential partner. More of the same going forward, please!

Statistic Value
Total Responses 46

222
20. Universities in the US do a good job of working with industry to develop new
medical technologies. Do you agree with this statement?

# Answer Response %
1 Strongly Disagree
4 6%
2 Disagree
21 30%
3 Neither Agree nor Disagree

28 40%
4 Agree
16 23%
5 Strongly Agree
1 1%
Total 70 100%

Statistic Value
Min Value 1
Max Value 5
Mean 2.84
Variance 0.80
Standard Deviation 0.90
Total Responses 70

223
21. University and NIH Conflict of Interest Guidelines have a negative effect on
how you work with potential university partners. Do you agree with this statement?

# Answer Response %
1 Strongly Disagree
3 4%
2 Disagree
14 20%
3 Neither Agree nor Disagree

26 37%
4 Agree
23 33%
5 Strongly Agree
4 6%
Total 70 100%

Statistic Value
Min Value 1
Max Value 5
Mean 3.16
Variance 0.92
Standard Deviation 0.96
Total Responses 70

224
APPENDIX G
CROSS TABULATIONS

225

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Asset Metadata

Creator Jamieson, Michael Walker (author)

Core Title The role of universities in the commercialization of medical products: a survey of industry views

School School of Pharmacy

Degree Doctor of Regulatory Science

Degree Program Regulatory Science

Publication Date 12/13/2011

Defense Date 05/11/2011

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag Bayh-Dole,commercialization,medical products,OAI-PMH Harvest,technology transfer,TTO,University,valley of death

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Richmond, Frances (committee chair), Alkana, Ronald (committee member), Brinton, Roberta Diaz (committee member), Loeb, Gerald E. (committee member)

Creator Email michael.jamieson@usc.edu

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c127-616319

Unique identifier UC1400909

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