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October 1, 2009

OTM weathered economic storm, Malandro says

The nation’s economic conditions slowed progress for Pitt’s Office of Technology Management (OTM) last year, but Marc S. Malandro, associate vice chancellor for technology management and commercialization, is pleased with how the office weathered the storm and is predicting a better year ahead. “We’re seeing things taking off again as the economy rebounds,” he said.

Malandro said the office needed to re-set its expectations mid year and put “licenses back in line with the new reality,” amending the financial milestones within some existing agreements to accommodate the slower progress necessitated by tighter corporate budgets.

He said the region has felt a double whammy in that early stage venture capital is hard to come by in the current economic climate and regional economic development groups also are facing tight budgets. “It’s hard to get people to invest and there’s trouble getting regional economic development funding,” he said.

Malandro said potential licensees also are taking more time to do their due diligence and seeking more information before making a deal on University innovations. “They are taking twice as long as two or three years ago,” he said.

Although revenue fell and licensing and option deals dropped in fiscal year 2009, the news from the office, which oversees technology transfers from Pitt innovations, wasn’t all bad. Patent applications and invention disclosures from innovators associated with the University grew last year, according to the office’s annual report.

In addition, 32 patents were issued during the year, down from 36 in FY08. The patents mainly represent submissions made in 2004, 2005 and 2006 due to an ongoing backlog in the U.S. Patent Office.

Since 2006, the University has filed 461 U.S. patent applications, including 105 in FY08.

OTM reported that licensing revenue totaled $4.12 million, reimbursement of legal fees added $2.39 million and $10,476 in sales of equity from startup companies formed around Pitt technologies brought its total revenue for FY09 to $6.52 million. In FY08, revenue was $9.09 million ($2.42 million in legal fee reimbursements, $6.67 million in licensing revenue and no sales of equity in startup companies).

Citing in its report “predictably slower negotiating paces and decision-making cycles throughout the year,” OTM reported completing 41 licensing and option deals in FY09, down nearly 30 percent from last year’s 58 licenses and options.

The report stated that invention disclosures, which are the first step in the technology transfer process, rose to 254 in FY09, up from 244 in FY08. At least 57 of more than 350 Pitt-affiliated innovators who submitted the disclosures were students who had developed ideas in partnership with faculty.

Although innovation came from across the University, the largest contributors were the School of Medicine’s departments of medicine, surgery and pathology and the Swanson School of Engineering’s bioengineering and electrical and computer engineering departments.

The start-up companies formed in FY09 are:

• Neograft Technologies: Based in Oakland, the company was formed by bioengineering graduate students Lorenzo Soletti and Mohammed El-Kurdi and faculty members David Vorp, professor of surgery and bioengineering, and William Wagner, professor of surgery.

The students left the University early to start the company around a biodegradable polymer technology that can provide temporary structural support for veins that are being used in arterial vein grafts.

• Venture Manufacturing Group: The California-based company is developing a prototype of bioengineering professor George Stetten’s handheld Sonic Flashlight ultrasound imaging system and plans to market it to potential customers to ascertain interest in the device.

• Kairos Instruments: Based at Pitt’s Applied Research Center, Kairos has developed lab instruments for live cell imaging. Its instrumentation systems are based on live cell incubation and monitoring technologies developed by Joel Greenberger, professor and chair of the School of Medicine’s Department of Radiation Oncology, and two Carnegie Mellon University professors.

Looking ahead, Malandro said he foresees an increase in startups next year as well as a potential jump in royalty revenues in the near future, citing several late-stage projects in clinical trials that could be on their way to the marketplace within a year or two.

Among them is Pittsburgh Compound B, which can aid in the diagnosis of Alzheimer’s disease, he said.

Malandro also noted the University’s success in attracting federal economic stimulus funds will result in some research that can be commercialized. Some of the impact of the stimulus money is being felt now, as additional projects are receiving funding. Other impacts may take years to see as products based on University technologies come to market. Life-sciences innovations may take five-eight years to wend their way through regulatory approvals before they can reach the marketplace and benefit patients. Other non-life science innovations, such as new RFID technologies being developed at Pitt, could emerge sooner.

In addition to responsibility for licensing, the office provides faculty resources and facilitates interactions between faculty and corporations. Malandro complemented the faculty for their interest in pursuing commercialization activities.

In its report, the office noted that a record 34 participants completed its 10-week “From Benchtop to Bedside: What Every Scientist Needs to Know” course last year.

OTM also has developed a new five-part short course with modules on intellectual property and regulatory and reimbursement issues.

—Kimberly K. Barlow

Filed under: Feature,Volume 42 Issue 3

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