Papers, Patents and … Products Jack Brittain, PhD Pierre Lassonde Presidential Chair Vice President, Technology Ventures University of Utah http://www.techventures.utah.edu/ Utah Transformed Operation • 2004 “Technology Prevention Organization” • Throwing technologies over the wall “hoping the coyotes will raise them” • Bottom half of TTOs, ranked 96th 2008 Sugar Bowl Trophy • 2008 Tied MIT #1 (2009 #1) in number of spinoffs based on University technology • Top 10 ranked office NSF study • FY 2006 to present: Fortress Ruins • • • • • • • 1,117 disclosures 306 new inventors 207 issued patents 376 executed agreements 124 start-up companies over $170 million licensing and royalty revenues over $250 million commercial-sponsored research Economic Significance “The economic significance of the research university goes far beyond its role of education and training. For several decades, university research has increasingly formed the foundation of significant technological advancements. These technologies enter the marketplace through research collaborations with industry, licenses, and to an increasing extent, university-driven efforts to turn new ideas into startup companies.” Jan Crispin, Senior Research Economist. The Economic Impact of Startup Companies and Invention Licensees Originating from Research at the University of Utah. Bureau of Economic and Business Research, 2011. Technology Value Curve Spinoff Value Generation Where Universities Traditionally Add Value IDEA PROOF OF CONCEPT PROTOTYPE Services • Prototype • Incorporation • Logo/website • Corporate Secretary • CFO Solutions • Umbrella Insurance • Market research • Grants programs COMMERCIAL LAUNCH Commercialization Stage MARKET EXPANSION Utah Spinoff Development 31 Technologies in Pipeline (0 counted startups) IDEA PROOF OF CONCEPT 162 Operating Companies 7,186 Utah Employees Spinoff Value Over $39 million Generation Commercialization Grants (2005-11) over $300 million Start-up Investments (2005-11) (203 Start-ups 1970-2011) PROTOTYPE COMMERCIAL LAUNCH Commercialization Stage MARKET EXPANSION Spinoff Development Spinoff Value Generation Phase 1 Formation Phase 2 Business Phase 3 Operating • Legal Formation • Technology License • Product Development • Logo, web • Product development grants • Business Plan • Product Validation • Product development grants • Angel & Seed Investors • Customers Testing Product • Investors • Key Managers • Board of Directors • Bank Credit Phase 4 Market Entry • Marketing/ Sales • Strategic Partnerships • New Products & IP in development COMMERCIAL LAUNCH PROTOTYPE Commercialization Stage Phase 5 Long Term Growth MARKET EXPANSION Spinoff Results 2011 Spinoff Value Generation Phase 1 Formation Phase 2 Business Phase 3 Operating 27 Companies $755,000 Grants $800,000 Investments 17 Employees 23 Companies $4,430,000 Grants $5,480,000 Investments 51 Employees 22 Companies $12,832,000 Grants $78,015,000 Investments 153 Employees Phase 4 Market Entry Phase 5 Long Term Growth 18 Companies $8,137,000 Grants $11,920,000 Investments 131 Employees 72 Companies $13,200,000 Grants $185,307,000 Investments 6,4150 Employees COMMERCIAL LAUNCH PROTOTYPE Commercialization Stage MARKET EXPANSION Spinoff Partnerships Spinoff Value Generation Phase 1 Formation 27 Companies $755,000 Grants $800,000 Investments 17 Employees 2 Medical Phase Devices 3 Phase 4 •Phase USTAR Business Operating Market Accelerator 23 22 Entry •Companies Venture Bench Accelerator Companies 18 •$4,430,000 Software $12,832,000 Development Companies Grants Grants $8,137,000 Center Accelerator $5,480,000 $78,015,000 Grants • DOE Renewable Energy Investments Investments $11,920,000 51 153 Investments Commercialization Center Employees Employees UURF Incubator 131 Employees COMMERCIAL LAUNCH PROTOTYPE Commercialization Stage Phase 5 Long Term Growth 72 Companies $13,200,000 Grants $185,307,000 Investments 6,4150 Employees MARKET EXPANSION Accelerators • Spanning Valley of Death • The Gully of Inconvenience • Leverages investor dollars • Community engagement • Student Opportunities: Pole Vault Media • Entrepreneurs In Residence • Commercialization Advisory Board/Company Collaborations Tech Ventures Team >$100 million Glenn Prestwich Presidential Professor Presidential Special Assistant Entrepreneurial Faculty Assoc Community of Faculty Entrepreneurs 280 faculty 10% total faculty Ron Weiss, MD retired ARUP CEO Faculty Outreach 5-8 faculty case load Troy D’Ambrosio Seasoned Entrepreneur Raised Capital Director of Education Programs Doug Lloyd/David Dolan Serial Entrepreneurs Entrepreneur in Residence Seed Funds • KickStart • UpStart • Lineagen • Vendice • Navigen • 7 Revs • UVF > 100 business people > 1700 students Research $250 million federal research Zach Miles, Interim Director and Associate Director 25 fulltime professionals + 30 student interns Technology Commercialization/Commercial Research 250 “Inventions” Commercialization 70 Potential Licenses 30 Potential Companies Company Disclosures 700 600 Number of Disclosures CalTech 500 MIT 400 Disclosures Predicted Disclosures 300 Top 50 Predicted Goal 200 100 0 $0 $200 $400 $600 $800 $1,000 Millions of Federal Research Dollars $1,200 Input –Outputs, Averages-Goals Changes • Changed from cost recovery to investment model – Cost recovery is inevitably a failure – Investment logic produced tangible economic impact – Changed the nature of our work to the positive • Total Mission Integration – Integrated student programs enhance University, engage faculty – Commercial sponsored research gave us a sustainable business model • Programs mitigate early stage risk – Provide leverage for investors – Encouraged capital formation Investment Leverage Risk Moderated Return Universities and the Innovation Ecosystem “Universities do not get enough credit for the fact that as players in our innovation ecosystem, they’re willing to gamble on cash-strapped startups. At the end of the day, who else is offering to pick up the tab? … Warts and all, universities remain willing to pay patent costs to support expensive and increasingly sophisticated IP strategies for startups who will likely never be able to pay them back.” - Melba Kurman, Triple Helix Blog, 25 Feb 2011 Leading Indicator: Investment $700,000,000 $600,000,000 $500,000,000 Cumulative Grants Funding $400,000,000 Cumulative Investment Funding $300,000,000 Value Private Companies $200,000,000 $100,000,000 $0 2005 2006 2007 2008 2009 2010 2011 Research and Innovation Dr. Geoffrey Nicholson inventor of the Post-It™: “Research is the transformation of money into knowledge. Innovation is the transformation of knowledge into money.” As innovators, universities are unique in their dedication to reinvesting innovation returns in knowledge creation. Total Mission Integration • Educational programs > 1700 students Defining educational experience Huge positive for faculty • Donor gifts over $25 million Lassonde Center Sorenson Discovery Center Annual sponsorships over $1 million • University Venture Fund manages $18.5 million in Fund I Fund II target is $50 million Student Programs Eligible Colleges & Universities Student competitions Students # student participants Sponsoring Entity Student Entrepreneur Conference Introduction to student competitions and resources Any Open to all students 250 Lassonde TechTitans Statewide idea competition Any Open to all students 65 Lassonde GreenTitans Green tech or sustainability product idea competition U only Open to all students 20 Lassonde & Office of Sustainability Opportunity Quest Statewide executive summary competition U, USU, WSU , SLCC, LDSB, UVU, SC, SU, Open to all students DSC, Westminster 625 Lassonde Utah Entrepreneur Challenge Statewide business plan competition Any student in Utah Open to all students Bench-to-bedside Med device design competition U only Med Students, MBAs, Bio Engin teams Bioengineering 1102 - Invent Class Med device idea competition U only Freshman bioengineer students enrolled in the class MadSkills Marketing and ad design competition U only All U students U only 420 Lassonde 160 Tech Ventures & School of Medicine 54 Engineering & Lassonde TBD Lassonde U graduate students 22 Lassonde U only Any U student 50 Lassonde U only Any U student 25 DESB Education programs Lassonde New Venture Development MBA, PhD & JD student commercialize UU technologies Foundry - University of Utah University Venture Fund Students launch their own business in a structure learning environment Students perform due diligence and transaction analysis for $18M venture fund Translational Medicine Commercialization and business training for med students U only Med students 8 HHMI bioDesign class Bioengineering students work with med school faculty to design med devices U only Senior Bioengineering students 20 Bioengineering Technology Commercialization Interns Interns in TCO and Tech Ventures U only Any U student 20 Tech Ventures & TCO Intellectual property interships U only Doctoral candidates 8 Tech Ventures U only MD students and residents TBD U only U undergraduates TBD Total Students 1747 bioInnovation M.S. Program Innovation Scholars Grad studnets work part-time with IP law firms Bioengineering M.S. for medical students and medical residents Recognition Surgery, Tech Ventures and Bioengineering Tech Ventures Enriches Research • Translation process generates questions • Creates new funding opportunities – Commercial sponsors tend to be repeat customers – Less grant writing is more time for research • Work with faculty who want to be involved – Does not matter if faculty opt out – Faculty success generates interest University Startups, Revenue and Equity Revenues Foundation Equity $90,000,000 $25,000,000 $80,000,000 $70,000,000 $20,000,000 $60,000,000 $50,000,000 $15,000,000 $40,000,000 $30,000,000 $10,000,000 $20,000,000 $5,000,000 $10,000,000 $0 FY 2004 FY 2005 FY 2006 Commercial Research FY 2007 FY 2008 FY 2009 FY 2010 Commercial Clinical Research $0 FY 2011 2005 2006 2007 UURF Program Funding Licensing 2008 2009 2010 2011 UURF Private Holdings Valuation Start-ups 25 20 15 10 5 0 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970 Year Utah Economic Impact of University of Utah Research 2010 External Research Funding (total = $451 million) Total External Research Funds Spent in Utah [1] Total Employment[1] Total Annual Payroll Total Tax Contribution[2] 8,906 $378 million $33.4 million 150 19,818 $947 million $96.2 million 150 28,724 $1.3 billion $129.6 million $388 million Technology Commercialization (19 new in FY10) Total Operating Spinoff Companies $388 million Bureau of Economic and Business Research, 2010 and 2011. Includes direct, indirect, and induced employment. [2] State and local taxes. Western Innovation Network Founding Members Full Network WIN is about collaboration • NSF funded Partnership for Innovation (PFI) grant to explore universities collaboration model to enhance commercialization – University research yields 1 start-up per $93 million in funding – U.S. spent nearly $60 billion – 644 new companies – Can we do better? • Energy Commercialization Center (ECC) is related – DOE grant – Includes National Labs What if U.S. was doing as well? Utah: • 1 Spinoff per $12 million in federal research •Over 10,000 spinoffs per year •After 5 years, over 5 million jobs U.S. potential results: • 1 spinoff per $25 million in federal research = 1,800 spinoffs • $18 billion other federal research programs = 1,120 spinoffs • 2 spinoffs for 3,600 nonresearch institutions = 7,200 spinoffs WIN Programs • Shared research resources – improve utilization – support commercial research • Commercialization best practices – Pooled IP assets – Commercialization service for non-research colleges • Regionalize deal flow – Connect start-ups & seed capital funds – Improve matching with human capital Full Network Western Innovation Network Done right, commercialization program … • Enhances faculty research • Defining educational opportunities for students • Positive community contributions and partnerships Winning Together, Oklahoma Marathon