Alicia Löffler. Extraordinary Faculty First IPO Alumni Success Highest Licensing Revenues...

transcript

Alicia Löffler

Extraordinary Faculty

First IPO

Alumni Success

Highest Licensing Revenues

GROUPON

Northwestern is at an Inflection Point

Invention is serendipitous

Innovation is not

“It is an organization-wide effort that requires infrastructure and discipline and impacts how Northwestern University behaves within & with the world around”

Inspire a culture of innovation that bridges research and its practical use

for public benefit.

Many Ways to Bridge the Gap Between Research and Practical Use

StudentsPublications

Seminars, conferences, etc.Faculty consulting

Industry sponsored researchIndustrial affiliate programs

Commercialization: Intellectual Property, licensing, start-up

START-UPLICENSE TO

CORPORATIONS

RESEARCH NEW PRODUCTS FOR THE PUBLIC

What Keeps Us Moving in the Morning?Treating millions of patients around the globe

with fibromyalgia, pain associated with diabetes shingles, and epilepsy

Initial patent 1989Licensed to Parke-Davis 1990

ABO- Early detection of colon (and other) cancers –

Will save millions of lives 2006

Developed in collaboration with industryNIH and NSF

Wildcat System - HIV testing in remote and resource-poor areas of the world - predicted

to save 4 million lives in Africa/yearDeveloped in collaboration with Industry

2006Bill and Melinda Gates Foundation

Process of Innovation Fundamentally Changed in the Last Twenty Years

Government Academia Industry Innovations

Government

IndustryInnovations

The structure of innovation and commercialization today is so interwoven that it is difficult to delineate

government, academic from commercial institutions

The US Position in Innovation Fueled by Cornerstone Policies 1978-80

VC --Reagan’s Pension Funds

Patents - The Supreme Court's Diamond vs. Chakrabarty decision, allowed recombinant organisms

Bayh-Dole Act of 1984, helped move federally funded discoveries off the shelf and into private development.

Balance innovation incentives with access of innovation to the public

Bayh Dole Act

Allows: US Universities to have IP control of their inventions that resulted

from Federal Government Grants US Universities to grant exclusive licenses in the technologies to

private companies.

Restrictions: Universities must share proceeds with inventors. Reserves to the government a royalty-free non-exclusive license to

use the invention for government purposes. Bayh- Dole gives the government so-called "march-in rights" which

enable it to compel licensing of a federally funded invention if the patent owner has not commercialized the invention in a reasonable time or makes the product not accessible to the public

10,000

12,000

14,000

16,000

18,000

20,000 US Patent Activity from Academia

Total Patent Applications

New Patent Applications

Issued Patents

121991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500 Licensing Income

Total Income

Running RoyaltiesAll Other

Sale of Stock

1980-93

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 -

900 Start-Ups Formed

University Start-Up Companies

7,251 start ups formed 1980-2009

279,000 jobs created since 1996

$187 billion added to U.S. GDP

72% located in same state as institutionEvery state except Alaska

12.3% from California institutions11.8% from Massachusetts institutions

363 by MIT349 by University of California System175 by University of Utah34 by Northwestern University

Process

Expanded Purpose of the Function: From Linear to Multidimensional

Transactional Business Development

Business/Financing

PlanStart-up

Auction, trade, bundle, etc

Angel and Investor Advisors

Chemical, Pharmaceutical, Medical Device, Diagnostic Company Advisors

Patentability PatentMarket and Licensing

DisclosureCommercialization

To Comprehensive, Open, and Pro-active

Faculty Outreach

Innovation Mentors Program

Commercialization Clinics

DISCLOSURE

Creates important documentation:

a record of the invention

identifies the inventor(s) involved

identifies who sponsored the work

lists public disclosures and publications

First to Invent vs. First to File (soon to change)

Disclosure: Back-office Considerations

Discuss with inventors Inventor provides technical expertise Inventor may also provide industry contacts

Contact industry experts

Consult with legal experts

Internal analysis

Cross check sponsored work

Report to government

Determine inventor’s “home”

Determine previous commitments made

Prior art Invention development status Intellectual property position Enforceability Commercial potential Licensing potential

Typical criteria

PATENT

Exclusive rights granted for a limited period of time in exchange for a disclosure of an invention.

Must be new, useful and non-obvious.

Required by investors and commercial developers to justify investmentsOnly currency for startupsPositions faculty for further fundingFacilitates exchange of knowledge, promote disclosure rather than secrecy Adds clarity to agreements and partnerships

Patent decisions are often driven by publication (usually too early)

Why Patent?

Patents: Back-office Considerations

Licensing associates manage the process Technology and commercial expertise Responsible for invention from cradle to license Very resource intensive (money/skills/time)

Patent costs Typically $25,000 to $35,000 over life of U.S. patent

USPTO (US Patent and Trademark Office) fees Patent attorney/agent costs Higher patent costs for foreign coverage PCT (Patent Cooperation Treaty) application preserves

foreign rights while delaying costs

COMMERCIALIZATION PLAN

Plan to determine best path to bring the technology to society

License to operational company

License to startup

Commercialization Plan

Discuss with inventors Inventor may also provide industry

contacts Inventor’s preference (startup or license?)

Contact industry experts

Consult with investors

Match Faculty with entrepreneurs

Develop Marketing Plans

(with Kellogg students)

Market and “promote” technologies

Technical Risk Market Risk Financial Risk Regulatory Risk Management Capabilties Licensing potential

Typical criteria

LICENSE

An agreement where the owner of intellectual property gives permission to allow another party to act under all or some of the owner’s rights to further develop the technology

Complex agreements, covering decades Different inventions, different strategies Many ways to negotiate, approach to terms. Emotional Licenses NEVER die. They accumulate through decades. Re-

negotiations are the norm. About 200 active licenses

Licensing: Back Office Considerations

LicensorNorthwestern

UniversityLicensee

Development Organization

IP Rights

Northwestern’s Distribution Policy

Net Royalties = Cash Royalties

minus 20% for legal and administrative expenses

35inventor's research

inventor

Department

School or Center

Central

The People

PARTNERS AND ADVISORS

12 investor advisors from VC firms in the country Two external early stage VC firms

4 ADMINISTRATORS

Finance Databases Government compliance

2 BUSINESS DEVELOPMENT MANAGERS

Commercial and Start-up experience Work with licensing managers and inventors to determine commercialization path

7 LICENSING MANAGERS

Strong technical background, PhDs Conduct due diligence Manage invention from cradle to license Manage outside counsel Market technologies

30-35 STUDENTS

Vital Signs 2010

200 inventions/year, 75% biomedical

58 issued patents

6 start-ups (5 biomedical)

Licensing revenues of $180 million

222 active licenses

Northwestern University Licensing Revenues are the Highest in the Nation

Followed by Columbia, MIT, Rochester, Stanford and Harvard

Northwestern University Licensing Revenues have been ranked the Highest in the Nation(last survey released Dec. 2010)

2005 2006 2007 2008 2009 20100

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

800,000,000

900,000,000

Northwestern University Royalty Revenues

Invention Disclosures per SchoolSix month report

July thru December 2010

Total 103 inventions

Feinberg School of Medicine

McCormick School of Engineering

Weinberg College of Arts and Sciences

Invention Disclosures by Department Six month report

July thru December 2010McCormick

5%Biomedical Engineering

Chemical and Biological Engineering

Civil and Environmental Engineering

Electrical Engineering and Computer Science

Industrial Engineering and Man-agement Sciences

Materials Science and Engineering

Mechanical Engineering

Invention Disclosures by Department Six month report

July thru December 2010Weinberg College of Arts and Sciences

Chemistry

Neurobiology and Physiology

Invention Disclosures by Department Six Month Report

July thru December 2010Feinberg School of Medicine

17%Cell and Molecular Biology

Medicine

Microbiology/Immunology

Neurology

Obstetrics and Gynecology

Physical Medicine and Rehabili-tation

Physiology

Radiology

Surgery

Urology

Start-ups by School

MEAS WCAS FSM0

Potential profit is not a driver to bring research to the market: It is a numbers game.

Research Patents License ProfitsDisclosure

$1 – 3BResearch Funding

1000 disclosures 1 -2 licenseswill generate $1M

500 patents 150 licenses15 start-ups

Such long time lines make it almost impossible to pick winners

15 – 20 Years

Evolving Towards a Translational Culture

Role Modeling

Celebrate Role ModelsFACULTY

Catalyze ChangeSTUDENTS

Flawless, Efficient, Supportive Infrastructure

and PoliciesADMINISTRATION

Description Programs Identify serial inventors Celebrate success. Make “heroes” out of entrepreneurs

Annual Award Articles in internal & external publications

Use students as agents of changeLeverage students talents to “walk the halls” and help with commercialization

NUvention ProgramI2C (Innovation to Commercialization)Internship Program

Programs to educate and empower faculty in commercializationConnect faculty with outside knowledge

Commercialization ClinicsFaculty Lunches and SeminarsCIM Mentorship Program

Efficient, lean, holistic, process Developmental Therapeutics Program Implement Knowledge systemsProcess Engineering Language for Promotion & Tenure Decisions

Develop Know-HowFACULTY, STUDENTS.

ADMINISTRATORS

THANK YOU…..

Good luck!!

Alicia Löffler. Extraordinary Faculty First IPO Alumni Success Highest Licensing Revenues...

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