Emerging Best Practices in Translating University Research into Innovation

Emerging Best Practices in Translating University Research into Innovation Symposium on Exploring a New Vision for Center Based, Multidisciplinary Engineering Research National Academies, April 4, 2016

Who We Are Fred Farina Chief Innovation & Corporate Partnerships Officer, Caltech Orin Herskowitz Executive Director, Columbia Tech Ventures VP of Intellectual Property & Tech Transfer, Columbia University Dean Chang Associate Vice President for Innovation & Entrepreneurship, Univ of Maryland

Agenda Introductions Context on University Technology Transfer The Changing Tech Transfer Landscape: Emerging Trends, Tradeoffs for ERCs to Consider The I-Corps Opportunity Discussion and Q&A We want this to be interactive please interrupt us as often as you like!

OTTCP mission statement The primary mission of OTTCP is the transfer of Caltech's scientific and technical discoveries and inventions to the outside world, to maximize their benefit to society. We do this by developing partnerships with the commercial sector through the creation of new ventures, collaborations with corporations, and the transfer of intellectual property, while nurturing an entrepreneurial environment. Technology Transfer & Corporate Partnerships

OTTCP key stats FY2015 Metrics In the 20 years since OTT was started in 1995, we have had: 2,503 US patents issued 998 licenses signed 164 startups launched $376M in total licensing revenue $341M in royalties, $35M in equity proceeds $64M distributed to inventors Technology Transfer & Corporate Partnerships

Columbia s Tech Transfer Mission TO FACILITATE the translation of academic research into practical applications, for the benefit of society on a local, national and global basis. To do so at market-rate terms in order TO SUPPORT research, education and teaching at Columbia by generating funding for the University and facilitating partners with industry where appropriate TO EDUCATE AND SERVE as a resource for the Columbia community on matters relating to entrepreneurship, intellectual property, and technology commercialization

Columbia Tech Ventures at a Glance 27 $195M in FY15

Many Ways for Innovation to Flow Out From Universities Publications Student internships & jobs Faculty consulting Collaborations Sponsored research Licensing Start-ups Not the University s primary focus, but the focus for today s talk

Where Do Universities Play in This Space Cumulative Inputs and Outputs, 1991 2014, US Universities ~$809B in Research funding $2.5M / disclosure ~320,000 invention disclosures 55% ~175,000 patent applications 40% ~70,000 patents awarded 37,349 active license & options, 9,261 start-ups, 130+ new drugs & devices, 300,000+ new jobs Source: AUTM Licensing Surveys (FY91- FY14)

But the End of One Process is Just the Beginning of Another University s Funnel Industry / VC s Funnel Only 1 in 6 inventions ever gets licensed Successful product on the market

Not Surprisingly, Commercial Success is Not Easy ($M) $200 $150 $100 $50 $0 155 U.S. Universities 2014 Gross Licensing Revenue Source: AUTM 2014 Survey Data

Why is this so hard?

What is The Valley of Death Commercial value Government & Foundation Grants Industry & VC Funding The Valley Basic Research Early Feasibility Studies Technical Validation & Prototyping Early Market Testing Product Development, Marketing, and Sales

Inventions Often Take Years to Get Licensed: Only ~55% of Deals Done by Year 3, only 85% by Year 6 Source: Review of elapsed time from invention submission to executed license, for ~400 executed licenses covering ~700 inventions, 1982 until 2014 (32 years)

Columbia s Experience Mirrors that of Other Institutions National Cancer Institute Univ of California (all campuses) Cornell

Blockbusters Drive Most of the Revenue, But are Rare % of active licenses 100% 75% Less than 1% of licenses generate > $1M / year 50% 39.3% 25% 0% Active Licenses Revenue-Generating Licenses 0.6% Licenses >$1M Annually Source: AUTM Licensing Survey (FY04)

Big Winners Take Many Years To Develop... And Aren t Always Obvious at the Time Columbia s Four Biggest Revenue Producers (Revenue per Year)

Our Experience Mirrors That of Most Venture Capital So ninety-seven per cent of my returns from 2010 and 2011 are concentrated in one investment, which I could easily have missed. If I acknowledged that I was wasting more than ninety per cent of my time I couldn t get through my days. Marc Andreesen, Andreesen Horowitz Ron Conway famously had a seed fund in the late 90s, and he invested in hundreds of companies, and he lost money on every single one of them but one. Google. One company that paid of all of the losses on all of the rest Sam Altman, Y Combinator Over twenty years, our returns are going to come down to two or three or four investments, and the rest of this is the cost of getting the chance at those investments you just don t know which Tuesday Mark Zuckerberg is going to walk in. Fred Wilson, Union Square Ventures

However, University Tech Transfer s Impact Goes Well Beyond Just Revenue Convert eurekas into products that meaningfully benefit society Enable increased scientific research via industry partnerships Attract & retain faculty and students Tech transfer Enhance the University brand Encourage and support entrepreneurship Train the next generation of technology business leaders Improve the local and national economy Be responsive to governmental desires and maybe revenues (usually after many, many years)

Observations on Emerging Tech Transfer Trends Increased enthusiasm & support for technology commercialization (campus / city / state / fed) Better TTO collaborations / benchmarking / best practices sharing Explosive growth in campus entrepreneurship Increasing discovery outcomes from multidisciplinary, multischool, multiuniversity collaborations Changes in the patent landscape Increasing challenges directly licensing IP to Big Tech Increasing importance of and experimentation with alternative licensing approaches (startups; clicklicensing; patent pools)

ERC of the Future: Possible Tradeoffs to Consider? Focus on industry Focus on startups Developing new strong ecosystems Leveraging existing strong ecosystems Blue sky research Applied research Funding research Supporting commercialization Simple metrics Complex metrics Might choose different positions based on tech area (e.g., blue sky & startups for bioengineering, applied & industry for enterprise software)