Universities Report More Licensing Income but Fewer Start-Ups in 2005

BYLINE: GOLDIE BLUMENSTYK

At least two dozen universities each earned more than $10-million from their licensing of rights to new drugs, software, and other inventions in the 2005 fiscal year, according to a survey released last week. The number of institutions creating large numbers of spinoff companies based on their researchers' inventions, however, apparently dropped off sharply from the previous year.

The findings are drawn from a report on a survey conducted by the Association of University Technology Managers.

In a break from past years' practice, however, the association did not release summary data for all colleges and universities that participated in the survey (there were 160 respondents for 2005). But it did provide selective information from the 151 institutions that agreed to have their names and responses published.

Among those, Emory University reported the highest figure for licensing income, but its $585-million-plus in 2005 included a lump-sum payment of $525-million that it received when it sold its rights to future royalties on an anti-AIDS drug to two companies.

New York University ranked second, with $133.8-million, a notable uptick from the $109-million it reported in the 2004 fiscal year. But another New York institution, Columbia University, might have ranked even higher had its numbers been made public as part of the survey. According to its annual report on science and technology ventures, Columbia generated just under $160-million from invention licensing.

The University of California, which includes data from all of its campuses (there were nine in 2005), reported income of nearly $93-million. Wake Forest University, with a research budget that was about 5 percent of the California system's, reported income of nearly $50-million, an increase of about $15-million over the previous year.

Concentrated Efforts

Michael Batalia, director of the office of technology asset management at Wake Forest, said the university's biggest source of licensing income continued to come from a wound-healing device known as the Vacuum-Assisted Closure and two other portfolios of inventions that were licensed to companies: a set of neurosurgical tools and some medical-imaging tests. "The VAC is the home run," he said.

Although Wake Forest's research budget is relatively small, Mr. Batalia said its focus on medical fields was significant for technology transfer. "Medical licensing tends to be more valuable," he said.

Also, his office concentrates its licensing activity on "meatier deals," Mr. Batalia explained.

"Instead of just running to file a patent application" on all the inventions disclosed to his office, he said, he and his three colleagues in technology management will often concentrate efforts and money on just a few inventions each year, developing prototypes and market-research data. By doing so, Wake Forest has been able to make better deals because companies are willing to pay more when the market potential is clearer. (The survey report says Wake Forest sought no new U.S. patents in 2005, but Mr. Batalia said he believed that figure was a typographical error.)

The report does not give a total for the number of start-up companies formed by universities in 2005, but the figures it does provide indicate a slowdown. In the 2004 fiscal year, seven institutions reported forming 10 or more companies. In 2005, only four formed 10 or more companies, according to the data in the survey. (If Columbia's numbers had been part of the published data, there would be five such institutions. It created 10 spinoffs in 2005.)

The total number of start-up companies formed by the 151 openly identified respondents was 404. For the 164 respondents reporting data for 2004, the figure was 425.

Over all, the 151 institutions that identified themselves reported signing a total of 4,053 new licenses and options for the rights to use their inventions in the 2005 fiscal year, and they collectively filed for 9,079 new patents.

In that same year, the institutions were issued 2,835 U.S. patents. Because patents can take months or years to issue, many of those were based on inventions from earlier years.

In another break from past practice, officials of the technology managers' association would not say which universities had answered anonymously or how many institutions deemed the nation's biggest research universities, based on their research spending, had participated. In the past, the association has striven for heavy participation from such institutions because they account for the bulk of the technology-transfer activity going on in the country.

A New System

Dana Bostrom, the association's vice president for surveys and metrics, said the changes in the report were deliberate. The association is "taking steps to enable a more knowledgeable discussion about the effectiveness of academic-technology transfer" because of concerns that people who look at the survey use the numbers for rankings without taking into account the different goals and resources of various institutions, she said in an e-mail message.

Ms. Bostrom, associate director of the University of California at Berkeley's Industry Alliances Office, said some additional data may be released when a fuller version of the report is published. The date for release of that data is not scheduled.

She said the association was also working with other organizations to develop other "metrics" -- such as ways to assess levels of additional research money coming to an institution as part of a licensing deal -- to better explain the role of technology transfer.

Some groups say such changes miss the mark. Universities Allied for Essential Medicines, an organization of students at more than 30 research universities that has been pressing such institutions to do more to help assure that people in developing countries can afford patented medicines, said the technology-managers association should ask more about "access" in its future surveys.

"We want our universities to have more responsible patenting and licensing policies, and so far there is no way to measure that," said David Scales, an M.D. and Ph.D. candidate at Yale University and manager of the metrics program for Universities Allied for Essential Medicines.

In October, following a meeting in Philadelphia, the student group issued a document it calls the Philadelphia Consensus Statement calling on universities to promote research on neglected diseases, to undertake licensing deals that will ensure that patents are not enforced on lifesaving drugs sold in poor countries, and to collect and make public "statistics on university intellectual-property practices related to global health access." So far, more than 1,700 people, including several Nobel laureates, have signed the statement.

Copies of the association's report, "U.S. Licensing Survey: 2005," are available through the group's Web site (http://www.autm.net).