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BioBusiness - When Science Has a Potential Payoff

Interview with The Scientist and Dr. Louis M. Scarmoutzos


The Scientist: Technology Transfer Offices - Commercialization of Life Sciences Discoveries?

First of all, I would like to comment on your questions from the perspective of someone in industry, particularly from a small business perspective. Notwithstanding the differences between industry and academia (culturally and otherwise), there are also different perspectives from someone in a small company compared to someone from a large company.

Secondly, I am not going to comment on the fundamental philosophical differences between academia and industry and their respectively different goals. There has been a great deal of discourse and information written about these differences and how they give rise to potential conflicts.

I would like to focus my comments on the operational aspects of a technology transfer office and how it affects small businesses, at least from the perspective of an "outsider looking in".

The Scientist: What characteristics do you believe make a good tech transfer office?

Having the right mix of talent, prompt turnaround times, and reasonable valuation expectations (regarding intellectual property) are what I believe characterize a good technology transfer office (TTO). By having the right mix of talent, I mean not only legal professionals but also talented professionals with a good background in business and in technology.

The response time in industry, particularly small businesses, is much faster paced than at the university. It is not unusual to have several weeks pass by before you receive feedback or a response from the TTO. That may not sound like a lot at first, but for small businesses, it can be a very important factor- particularly as your funding dries up and your cash "burn rate" continues.

Unrealistic technology valuations can give rise to potential financial conflicts, particularly as they relate to small businesses. These include royalty fees greatly in excess of the revenues that can be realistically expected from the technology as well as up-front licensing fees which can be an onerous burden for small companies with constant cash flow concerns.

The Scientist: If you were to grade technology transfer offices at US universities and biomedical research facilities, overall, what grade would you give them? Why? What about tech transfer offices internationally?

Generally, I would give them about an average grade, at best - primarily due to the reasons given above from your previous question. University policies such as publication requirements and faculty cooperation as well as university culture can also be frustrating. Some university TTOs prefer not to work with small companies.

Generally speaking, international TTOs are less experienced than their U.S. counterparts in dealing with small businesses and are characterized by considerably slower turnaround times.

The Scientist: What pressures/challenges are these offices facing these days? Is it pretty much business as usual or are tech transfer offices building their capabilities? How so?

Technology transfer offices and their function are growing and becoming more widespread, largely due to a combination of a two factors: the Bayh-Dole Act of 1980 and decreased industrial R&D activity over the past decade or so. As a result of the Bayh-Dole Act, universities see technology transfer not only as beneficial for society as a whole but also economically beneficial to them as well. With the decreased R&D conducted in industry, more and more businesses are looking to university sponsored research as a source for new products and new technologies.

I am also seeing TTOs moving off-campus, presumably minimizing cultural differences between academia and industry and generating a more business-like working environment.

A continuing challenge for TTOs is the balancing of public versus privatized knowledge. i.e. businesses generally do not share the academic tradition of sharing information and for economic reasons would prefer exclusivity of knowledge.

The Scientist: Are there any ways in which tech transfer offices could improve? What are their failings?

Exercising restraint and providing a more balanced perspective on what to patent (license) and what to make available to the general public.

Historically, most university research ultimately found its way into the public domain and was freely available to everyone. Today, an increasing fraction of this university research is being patented and subsequently licensed. As a result, companies are now being forced to pay for techniques, materials, and information previously accessible to them for free. This is giving rise to increased frustration and agitation, particularly since most, if not all, of the underlying university research activity was conducted with the use of tax dollars (collectively from individuals and companies).

This tension has the potential of creating a negative backlash towards universities and TTOs - from pharma and biotech companies as well as from the general public, since the added licensing costs are ultimately passed on to the end-user and contribute to increased healthcare costs.

* * * * *

Dr. Louis M. Scarmoutzos, or "Dr. Lou" as his colleagues and friends fondly call him, is a Managing Partner and Founder of MVS Solutions Incorporated- a corporate and technology development company and consulting firm that provides scientific, technical and business assistance to business, government, and nonprofits in the biotech, chemistry, life sciences, medical device, healthcare and related industries. Dr. Lou can be reached at lscarmoutzos@mvssolutions.com or at (617) 283-2182.

The Scientist is a news journal providing coverage of the latest developments in life sciences research, technology and business. Additional information concerning The Scientist can be found on the Internet at www.the-scientist.com

The news article resulting from this interview first appeared in the January 17, 2005 issue of "The Scientist", written by Karen Pallarito




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