Technology-Based Economic Development:Transferring UB Inventions to Society

Robert J. GencoVice Provost and Director

of the UB Office of Science, Technology Transferand Economic Outreach (STOR)

rjgenco@buffalo.edu

June 21, 2006

UB and Technology-Based Economic Development

I. UB’s STOR – Progress Report

II. Opportunities and Challenges

III. Future Initiatives

I. UB STOR Progress Report• UB Research Funding and the COE

• Inventions and Disclosures

• New Licenses and Options

• Start-Up Business

• UB Technology Incubator

UB STOR Staff

Intellectual Property Commercialization PublicationsJeff Dunbar, Director Woody Maggard, Director Lorraine StinebiserGloria Calato Sallie ReedTim DeeRupal DesaiMichael FowlerEd Tirpak

Administrative Staff MBA and Law AssistantsDenise Lewis Karin Abu-MiddainKim Rohring Renata BatorRose Parkhill Joe Colangelo

Kristina HellmanDoug SmithShubh Srivastava

UB Tech Transfer Highlights

• Bayh-Dole Act 1980 – allows universities to own intellectual property developed using federal funds.

Mandates that they protect and make best efforts to commercialize discoveries, and share portion of proceeds with inventors. This is what STOR is charged with for all UB faculty and students.

Since Bayh-Dole, universities have been a major resource for technology-based economic development in the U.S.

• 4,100 new companies formed based on University-licensed inventions since 1980.

• Launched 2,200 new commercial products between 1998 and 2003.

AUTM Licensing Survey FY 2003 (www.autm.net)

UB Invention Disclosures and Patent Applications and the AUU Benchmark

UB AAU Benchmark*

Actual

Number Per $10 Million Research Expenditure

Number Per $10 Million Research Expenditure

Invention Disclosures

2003 82 3.42 3.32

2004 81 3.13 3.32

2005 92 3.50 3.32

Total Patent Applications

2003 58 2.42 2.69

2004 50 1.92 2.69

2005 69 2.65 2.69

*Benchmark based on median of all AAU universities with an Academic Health Center.

UB New Licenses and Options, and Start-Up Businesses as Compared to the AAU Benchmark

Measure

New Licenses And Options UB Benchmark*

2003 5 17

2004 14 17

2005 16 17

New Start-Ups

2003 2 1

2004 7 1

2005 8 1

*Median of AAU Universities with Academic Health Centers. UB start-ups include those with classical licenses as well as others where licenses are not included since the technologies are not protected except by copyright ortrade secret (e.g., software).

Figure 1. Invention Disclosures and Total Patent Applications

0

25

50

75

100

2001 2002 2003 2004 2005

Invention Disclosures Total Patent Applications (New Provisional and Non-Provisional Applications)

Figure 2. New Licenses and Options

22

20

18

16

14

12

10

8

6

4

2

0

2001 2002 2003 2004 2005 2006*

*

New Licenses and Options

UB Totals From 2002-2006

380 Disclosures

62 New licenses

24 Start-up Business

UB’s Emphasis on Regional Development• 39% of licenses to start-ups (National average is 20%)

Examples of UB Start-Up Companies in WNY

SmartPill Corporation - Dr. J. Schentag, Inventor; David Barthel, CEO

• diagnostic device – swallowed, sends pH and pressure signals throughout GI track

• raised $25 million in private capital• FDA approval for SmartPill GI Monitoring System expected in 3 Q 2006• Starting colonic, ileal-cecal, and diabetes trials

Minrad Inc. – Dr. D.M. Landi and R. Lifeso, Inventors, W. Burns, CEO• surgical alignment; anesthesia devices added• raised over $36 million in private capital• products on market

Kinex Pharmaceuticals - Dr. D. Hangauer, Inventor, Dr. A. Barnett, CEO• cancer drug development company – novel kinase inhibitors• raised $2.3 million private capital, leveraged on CAT, WNY BDF, and PDF

funding

Buffalo BioBlower – Drs. J. Garvey and J. Lordi, Inventors and CEOs• air sterilization system – kills spores of B. anthrax -surrogate• $3 million grant announced from U.S. Government for prototype

development, leveraged on CAT, WNY BDF and PDF funding.

UB Start-Ups That Have Recently Received SBIR Funding

• Therex – Drs. R. Evans, R. Coburn and R. Genco, Inventors, Dr. J. Dunn, CEO – surface acting drugs with both antibacterial and antiinflammatory effects – for use in acne, gastric ulcers and oral diseases, $4 million from SBIR/STTR funding.

• Virmatics – Dr. J. Bruenn, Inventor, J. Cornell, Manager – bioinformatics-cloning software company, SBIR, leveraged CAT, and WNY BDF.

• Dynamic Eye – Dr. C. Mullin, CEO – self-regulating, glare-reducing screens, leveraged WNY BDF to obtain $2.0 million government contract.

UB Technology Being Licensed to WNY Companies

Reichert Inc. – Dr. F. Sachs, Inventor – Microfluidic cell volume measurement device.

Ethox and a strategic partner – UB’s Catheter Monitoring System – a relatively non-invasive cardiac monitoring unit invented by Drs. D. Hickey and C. Lundgren.

Both also to receive NYSTAR Grants for joint development with UB.

First Wave Technologies, Inc. – B. Bell, CEO

Development company established March 2005. Funded by NanoDynamics, Moog, Wilson-Greatbatch, ECIDA, and Buffalo Economic Renaissance Corporation. They will build management teams and seek development funds to support research and development and clinical trials. UB funded consultant, Keith Blakely to start First Wave.

UB technologies under development by First Wave:• The Universal Isolator, a patient ventilator interface.

• Pill-Crusher used to prepare medications for compromised patients.

• BioHammer – a open source bioinformatics software company

• Artificial protein drugs and diagnostics involving in vitro synthesis of ribozyme catalyses.

UB Technologies Recently Licensed to Existing Companies

• Character recognition technology licensed to XactData, Inc.

• Nanomaterial for photo-voltaic/energy uses licensed to Solexant.

Eight UB patents involving method of preparation and use of semiconductor nanomaterials used to build a novel photovoltaic cell that converts solar energy into electricity.

• Diagnostic test for obstructive sleep apnea and Cheyne-Stokes respiration-licensed to Sleep Solutions, Inc., replaces overnight polysommography.

• Novel antimicrobial peptide from human mucin to BioFactra, a biopharmaceutical development company.

• Four UB drugs for treatment of schizophrenia, licensed to Chakra Biotech Pte Ltd., developing CNS drugs.

UB Drug Ropidoxuridine – Invented by Dr. T. Bardos; Licensed to Hana Biosciences

Hana recently received FDA orphan drug designation for treatment of malignant glioma

• extends market exclusively 7 years

• tax credits for clinical trials

• Ropidoxuridine is a novel, orally available thymidine analogue and prodrug for IudR, which demonstrated a survival advantage in patients with anaplastic astrocytomas, a type of glioma brain tumor.

• Ropidoxuridine also in clinical trials for colorectal, gastric and pancreatic cancers.

UB Baird Research Park

UB Incubator Companies (Resident)Academic Management SystemsAerostar Group (A.E. Group)AquasolAs It IsBubble Flow, Inc.GSE LearningIntegral Information SystemsLaser Photonics Technology (ACIS, Hybrid Technologies)Lynx TechnologiesNewton LED, Inc.ONY, INC.

Oncology Research Therapeutics, Inc.Technicor, Inc. (Glassline, Mika Trading, Techniglass)Teeter Marketing ServicesThe Randforce AssociatesThe Center for Industrial Effectiveness (TCIE)VirmaticsWallace WirelessZenhire

Affiliate Companies of UB Incubator

Absolute EnergyAndrew and Andrew Consulting

BioBlowerBioHammer

Capital Formation InstituteChakra Biotech

GeneObVertasource

UB Incubator – more than Real Estate! Services to Incubator Companies

1. Funding

a. WNY Business Development Fund – a seed venture fund. R. Genco on Board

b. ECIDA – Life Sciences Fund – W. Maggard on Board

c. UNYTECH – a venture fair for 10 upstate NY universities – R. Genco, W. Maggard, J. Dunbar on Board

d. WNY Venture Association – W. Maggard on Board

e. Angel/Venture Capital Networks – W. Maggard on Board of Capital Formation Institute

f. NYSTAR – TTIP – J. Dunbar assists companies and faculty in preparation of grants (4/4 funded in last 2 yrs.)

g. SBIR/STTR – staff assist faculty and CEOs’ preparation.

h. Product Development Fund – UB pre-seed R&D fund – administered by STOR.

2. Managerial Match Program UB’s “Execumatch”

• Prequalifies candidate executives (eg. Predictive Test)

• Management match for UB companies

• 4 placed recently

• 8 UB companies presently searching for CEO or other management level personnel

3. Mentoring and Coaching

• Joint course in Executive Management for technology start-ups with UB’s Management and Law School

• Management School CEL Program

• Coaching for venture capital presentations

• Strategic planning for start-ups

• Marketing research, eg. use Knowledge Express and large databases STOR has access to.

• Referral to qualified legal, accounting, and other service providers

UB Incubator Graduates This Year

Technicor, Inc. (July)

Aquasol (July)

AMBP Tech Corp. (Feb)

Future Plans

1. UB Baird Research Park Master Plan – completed by Kideney Architects

2. UB South Campus Feasibility Study

3. Buffalo Niagara Medical Campus Feasibility Studies.

Plans for the UB Baird Research Park

UB South Campus

After feasibility study, UB to use limited space on South Campus for academic purposes. Possibly incubator space in one of existing South Campus research buildings.

Buffalo Niagara Medical Campus

1. Feasibility Study – Evaluated several existing buildings and sites.

Findings:

a. Previous HWI building too costly to renovate.

b. Other sites require new construction –too costly as initial investment.

c. An existing building – in the process of being purchased – new owner wants to lease space to start-ups, UB

STOR staff to provide services to start-ups.

III. FutureA. Increased research base at UB, RPCI, HWI, and other

academic institutions

Being Developed –

• Roswell Park Cancer Institute recruiting ~ 100 scientists

• UB plans to recruit 250 faculty in next few years

• Hauptman-Woodward Institute plans expansion of scientific staff

• Regional colleges and high schools emphasizing science

Lack of Early Stage Capital

A national problem, especially severe in upper New York State.

Research Commercialization

Pro

bab

ilit

y o

f S

ucc

ess

High

Low

Technology Development Phase

Business Building Phase

Scientific Discovery

Lab Model

SBIR Funding

Prototype

Manufacturing Model

Market Assessment

Business Models

Create Business Mgt Team

Seed Capital

A Round

B Round

IPO

Commercialization Progression

Valley of Death

First Customers

Proposed “Innovation Center”for Buffalo-Niagara Region

Goal

• Focal point for technology-based economic development

Participation

• UB/COE and affiliated institutions, local colleges

• Corporate, foundation and governmental participation

Funding• Governmental support (eg. new New York

State Foundation for Science, Technology and Innovation)

• Economic Development Agencies• Foundations• Industry• Academic Institutions

Programs of “Innovation Center” That Are Critical For Our Future Technology-based Economic-Development

• Faculty/Inventors – Government, industrial, foundation support.

• Pre-seed Capital – “product development fund;” after patent application prior to licensing.

• Seed-Venture Capital – early stage funding for start-up company after licensing.

• Management Recruiting/Training • Incubator/Research Park - with services and mentoring

provided for start-ups.

Mark Twain Said --“When the world comes to an end, I want to be in Buffalo, because everything happens there 20 years later.”

UB says – Technology-based economic development is happening in Buffalo now – we are not waiting for 20 years. As you noted Mr. Twain, we are “going out on a limb, that is where the fruit is.”

Thank you!Thank you!