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September 29, 2011

To market, to market: Executives expect brief stay here

Now you see them; pretty soon you won’t. At least that’s the plan for entrepreneurs Michael Lang and Greg Coticchia, who joined the Office of Technology Management (OTM) staff earlier this year.

Pitt executives-in-residence Michael Lang and Greg Coticchia are using their business expertise to identify promising University innovations that they could end up bringing to market.

Pitt executives-in-residence Michael Lang and Greg Coticchia are using their business expertise to identify promising University innovations that they could end up bringing to market.

As executives-in-residence (EIRs), their job is to help commercialize University technologies, but they are expected to stay just a year or two. Ideally, they’ll spin out with an innovation they’ve identified as marketable.

Lang, a former EIR at the Pittsburgh Life Sciences Greenhouse, focuses on medical devices and life sciences innovations, working closely with researchers at the McGowan Institute for Regenerative Medicine. Lang has a bachelor’s degree in biomedical engineering and an MBA on top of industry experience in medical products, biomaterials, tissue engineering and minimally invasive therapies.

Coticchia, who has experience with information technology startups, is working with software-related innovations. A Pitt graduate who holds both industrial engineering and MBA degrees, Coticchia also has taught in the MBA program for the past seven years. An entrepreneur with experience in software, he was CEO of billing software company eBilling Hub. Its recent sale to Thomson Reuters left him “looking for the next opportunity” when the EIR job at Pitt came along.

EIRs — experienced entrepreneurs who are brought in to launch a new venture — are a rarity in University settings, but relatively common in economic development and venture capital circles.

“These are time-limited positions,” said Marc Malandro, associate vice chancellor for Technology Management and Commercialization, who directs OTM and the Office of Enterprise Development. “We expect them to move on. Hopefully they’ll move on with one of our technologies.”

Malandro said the University had relied on EIRs in regional economic development groups for business insight, but when declining state support eliminated those positions, Malandro proposed that Pitt launch its own EIR program.

By definition, EIRs have experience in their industry, Malandro said. “This is something we need in our office and that any technology transfer office can use,” he said.

In addition to experience, EIRs can add their established networks of industry contacts to the University’s connections.

The software EIR position, then the medical device/regenerative medicine EIR position, were created with support from the Provost’s office and the Office of the Senior Vice Chancellor for Health Sciences.

“It’s pretty clear that Pitt is thought of as a health sciences university,” Malandro said, adding that 75-80 percent of innovations here are in the health sciences areas. But he also wanted to do a better job of serving inventors in the computer science and information sciences areas.

The software EIR position, which Coticchia filled in January, has a one-year term with a potential for a one-year renewal. The medical device/regenerative medicine EIR job is a two-year position. Lang joined the staff in March.

Finding the right people depends on timing and fit, Malandro said.

Because the EIR positions are limited-term jobs, he looks for executives in transition. “We can’t pay CEO salaries at an academic institution. But they can go out with the next big thing.”

While both Lang and Coticchia are EIRs, their jobs and approaches differ. Medical innovations typically take years to bring to market. Software innovations tend to move in a matter of months.

When Lang joined the Pitt staff, he began reviewing the patent disclosures being generated by the McGowan researchers in search of the ideas and technologies that are most viable commercially.

Lang said his work with McGowan innovators as an EIR at the Pittsburgh Life Sciences Greenhouse two years ago “clicked” — their cutting-edge scientific work combining well with his commercialization experience. But changes at PLSG gave him less time to work with the researchers, so when Malandro offered him the Pitt position — essentially the same work he’d been doing — he didn’t hesitate.

“I’m not starting a job, I’m restarting it,” Lang said.

He said he likes being in on the early stages of an idea — at the confluence of technology, product and market. Commercializing research innovations is “a fun puzzle to solve,” he said, adding that he enjoys working closely with the innovators and their research teams.

“I’m an obsessive-compulsive problem-solver,” he said, confessing an affinity for working on complex, multifaceted issues.

As an EIR, he views himself as a CEO of a company that hasn’t been formed yet, intending to leave to advance a University-developed project once investors are found.

Lang jumped in by vetting researchers’ innovations and after giving about 30 technologies a quick look, he chose three that he believes are venture capitalist fundable and commercially viable.

Furthest along, he said, is an innovation by Pitt chemical engineer Yadong Wang, who has found a way to create the sustained release of growth factors. Typically, these signaling molecules that can aid healing metabolize quickly, but Wang developed a bio-absorbable polymer that binds them, providing a sustained dose that is released slowly over time. The innovation could be valuable in healing acute wounds or ischemic injuries sustained in heart attacks.

Also on Lang’s short list are a process for identifying cancer cells using a special microscope that utilizes a certain wavelength of light under which cancer cells appear different from normal cells, and a therapy for repairing damaged joints using an extracellular scaffold on which new cells can organize. Research currently is being conducted on implants for the temporomandibular joint, but Lang said other markets — perhaps for repairing knee injuries — may have even greater potential.

What kinds of innovations grab Lang’s attention? He looks for something novel that addresses unmet market needs and that can be configured into a product. In addition, “there has to be a fair amount of proof of principle,” he said — typically in the form of good data in animal models that indicate the innovation may translate well into humans.

Finally, it needs to be in an area where venture capitalists are investing.

“When I see all those things, that’s when I get excited,” he said.

Lang writes the business plan that he’ll use to pitch the idea to investors, including financial modeling to show the potential for returns.

“It’s a long process to raise money,” he said, adding that the plans have to be presented to a lot of people before the right investor is found. Because these investments are risky — nine out of 10 venture capital investments are not successful — he typically is dealing with a group of investors, rather than an individual. Instead of putting all their eggs into one basket, venture capitalists spread their bets across a number of different projects.

Lang said he has to be ready with all the answers for the questions investors might ask: How big is the market? Who will use the product? What is the reimbursement scenario?

“Nobody with half a brain is going to invest if there’s a hole,” he said. “Sometimes the answer is, ‘That can’t be known yet.’ There is uncertainty, but my job is to take out as much of the uncertainty as can be.”

Once negotiations and due diligence are done and funding is obtained, the project can be moved into the development phase. Then it could be 5-10 more years before a product is on the market.

In sharp contrast to that timetable, software innovations move much faster, Coticchia said.

While their titles and goals are the same, “the processes couldn’t be more different” between his work and Lang’s. “It’s a very different kind of life cycle for these software inventions compared to those that need lengthy FDA approvals,” he said.

Medical devices make up the lion’s share of Pitt’s technology transfer, “but there’s an awful lot of software here, too,” Coticchia said.

“There is a whole range of things being developed by researchers across the University,” he said — among them, social gaming, location-based social networking, database software, data warehousing, telepresence and iPad and smartphone apps.

Like Lang, his goal is to identify promising innovations “and hopefully take one of these and partner with the University.”

The variety is exciting, Coticchia said. “I’m like a kid in a candy store.”

Currently only about 10 percent of Pitt invention disclosures are related to software, but Coticchia is convinced that number can grow. “In this size university there’s got to be more,” he said.  He’d like to see 50-100 software-related disclosures a year.

People in academic areas closely related to the software field are aware of what he does, “but people elsewhere in the University might don’t know someone like me is here.”

Word is getting out that Coticchia is at OTM to speed software innovations to market and he’s making the rounds to encourage innovators to file disclosures and let him help with the commercialization. “Every day there are more inbound calls,” he said.

Meanwhile, he is pulling together a Pitt software advisory council of 12-15 people including local entrepreneurs and economic development experts who can advise, tweak or maybe even run with some of the software ideas themselves.

Among his favorite parts of the job is hearing inventors describe the genesis of their idea. Though the degree of involvement desired by inventors varies, they’re all enthusiastic about getting their software to market. “They want to see their ‘baby’ out there being used and successful,” he said.

Next best is making the deal. While some inventions could be the basis for a separate business, others are better suited as a complement or a functionality to add to an existing product.

“If we can match them up with the right entrepreneur, the right business person, that’s great,” he said.

Having the “research university” connection is a big plus, Coticchia said. “Licensing through a noted research university lends credibility to the technology,” he said. Having been on the other side, “I’d have loved to have had this relationship with any university — especially the University of Pittsburgh,” he said.

“I’m happy and proud to be here. I feel I can really help people,” he said. Still, his goal is to put himself out of a job — to move into “not a better one, a different one.”

A third EIR, Pratap Khanwilkar, is joining Lang and Coticchia in conjunction with his arrival as director of the program associated with Pitt’s recently awarded $3.54 million Coulter Foundation grant. (See related story this issue.)

Khanwilkar, who has founded six medical device product/service companies, comes from the University of Utah where he was an adjunct faculty member in bioengineering. In addition to directing the Coulter program and serving as an EIR in OTM, Khanwilkar will be a visiting professor in the Swanson School of Engineering’s bioengineering department.

“With unlimited funds, we’d like to have an executive in all domain areas,” Malandro said. While that’s not possible, he’s targeting areas in which investors are putting their money. “The commercialization marketplace really has gone toward medical devices,” which have a shorter approval path than therapeutics, Malandro said.

Also on the short list, should the EIR positions prove successful, would be the area of drug discovery, he said. “We would need someone who understands the regulatory and reimbursement environments. They can put the projects in the pipeline.”

Energy is another likely fit for an EIR at Pitt. “We understand a lot about energy research. An EIR would add expertise in how to commercialize those energy discoveries in green and fossil-based energies,” Malandro said.

“If we show a return on this program, I’m confident that as long as we’re successful in getting things out there, funding will follow,” he said.

—Kimberly K. Barlow

Filed under: Feature,Volume 44 Issue 3

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