As reported by the Hartford Business Journal, September 24, 2007.

UConn Scrambling for More Dollars

Licensing Gold Lagging at State’s Top School

By Scott Whipple

Research universities like the University of Connecticut know that licensing revenue and stock sales from technologies can result in major dollars, especially when a campus can boast of a Nobel Prize winner.

Which is why UConn is trying to beef up its efforts at fostering a research culture. But it’s got a long way to go to match even its closest neighbor.

The University of Massachusetts saw the benefits of research recently when its Commercial Ventures and Intellectual Property Office realized $41.1 million, up from $27.2 million in 2006. UMass earned $9.6 million alone in 2007 from licensing fees and stock sales stemming from two companies—Sirna Therapeutics, purchased last year by Merck, and CytRX Corp.

Much of that payoff came as a result of Craig Mello, a professor at the UMass Worcester campus. A Nobel Prize winner, Mello is a pioneer in RNA interference, or RNAi — gene manipulation therapy that could become a major breakthrough in treating serious diseases.

UConn, a latecomer to the spinoff game, may not be able to match UMass or other research universities such as MIT, the University of California and the University of Michigan in revenues — not yet, any way. In 2006, the university brought in $900,000 in licensing revenue and stock sales, $100,000 more than in 2005.

Big Dogs

But Michael Newborg, executive director of UConn’s Center for Science and Technology Commercialization, insists the university is a definite player.

Newborg, a former pharmaceutical executive with licensing experience, heads an expanded staff of seven. (Until 1999, the Center for Science and Technology Commercialization was a one-man operation.) Now well into the 21st century, UConn is trying to gear up to run with the big boys.

In 2005, UMass’ research expenditures were $376 million dollars; UConn’s were $169 million and Newborg points out there is a strong direct correlation between research dollars and license revenue. He also noted that UConn’s new president, Michael Hogan, is committed to increasing UConn’s research funding base.

UConn has several potential licenses that may give it its own home run. It has licenses in place with Boston Scientific and Air Products which may have products yielding substantial revenues in the next few years. It also has licenses in place with start up companies Opel, which has gone public, Venomix and MakScientific, in which it has an equity stake, which when and if cashed out would give UConn a substantial influx of revenue. Those are just five of UConn’s 75 active licenses and options.

At UConn, the licensing pie is divided into several pieces. The first third after recouping patent costs goes to the inventor; half of the middle third supports the investigators’ research. Twenty percent of that middle third goes to the dean of the school for use in the department, and 30 percent of the middle third to the chairman of that department, also for use of the department. Only the inventors keep their share personally. The university keeps the final third for salaries and administrative costs.

Incentive Plans

Over the last five years UConn has received $5,764,000 in gross revenues and has distributed to its inventors $1.6 million and nearly $1,3 million in support of additional research. That support includes not only the chairperson’s and dean’s share but also an additional amount to support the inventor’s research, which is in addition to his personal share.

The federal Bayh-Dole Act allows recipients of federal research dollars such as UConn to own their inventions.

Though running a tech transfer office may not appear cost efficient, Newborg points out that it helps to retain and recruit faculty. Entrepreneurial professors want the assurance there’s an office in place that will protect their inventions.

“Those who get to patent get to keep the money,” Newborg said.

To move forward, UConn is taking several tacks. That includes an Eminent Scholars program, which supports the recruitment of senior faculty with a commitment to commercialization of their technologies. UConn has also established a Center for Entrepreneurship and Innovation to encourage a climate of support for new high tech businesses in the state.

The school has also recently established two committees: an internal and an external advisory committee. The internal committee is made up of faculty and administrators and will make recommendations regarding policies and procedures that will help faculty move technologies forward; the external committee is made up of Connecticut industry, investors and service providers, and will help identify initiatives to make the school more attractive to its external partners. It also recently held an internal review to identify activities to help build the pipeline of discoveries in the future.