Power Lunch: Duncan leads hightech culture change

MU biophysics professor Gabor Forgacs is back in his lab after launching a company to commercialize his invention for three-dimensional human tissue printing, Organovo.
Professor Kevin Keegan is teaching horse surgery at the veterinary hospital again after taking a year away to run Equinosis, a company that sells his technology to evaluate lameness in horses and was financed in part by Columbia’s Centennial Investors.

Anthony Harris has returned to surgical residency after working with biodesign and innovation fellow Rebecca Rone to invent a laparoscopic hand tool and  start a company commercializing the device, Adroit Motion.
All three companies are tenants in the MU Life Sciences Business Incubator and illustrate the university’s recent success in moving inventions from the labs to the marketplace.
Financial support for faculty researchers, patent disclosures and licensing income have surged to record levels since Rob Duncan became MU’s vice chancellor for research two years ago.
New invention disclosures, for example, jumped from 77 in 2008 to 106 in 2009, and the biodesign team led by Harris and Rone was responsible for 15 of them.

The success in commercializing research, Duncan said, resulted from “literally thousands of very creative people pulling on the rope in the same direction. It’s great that so many people in the community are engaged and encouraging this; it will allow innovations and inventions from the university to come to market much more rapidly.”

MU administrators, inventors and community leaders came together for a CBT Power Lunch on June 21 to talk about what more can be done to help turn good ideas into successful startups and perhaps meet President Gary Forsee’s goal of reaching $50 million in annual licensing income.
“There might be synergies and opportunities we haven’t yet explored,” Duncan said.
One of Duncan’s early decisions was to hire a technology transfer director to modernize the process of transforming promising concepts into marketable products.

Some of the developments since then:
• In February, Duncan created the Club Innovation for Missouri Business to link students who want to commercialize products with researchers and established local entrepreneurs.
• In May, MU revamped its intellectual property rules for undergraduates after a School of Journalism student developed an i-Phone application for real estate that spawned other inventions.
• Centennial Investors, created by the Columbia Chamber of Commerce to nurture local entrepreneurs who need startup capital and mentoring, has put $1.7 million into eight companies.
• The Business Incubator now has a dozen tenants and expects to be full by the end of the year.
• The city announced that it wants to move the economic development office into ground-floor space at a downtown parking garage when construction is finished and turn some of the remaining space into a business incubator for students and recent graduates in collaboration with MU’s Small Business and Technology Development Center.
But Rone and Curt Davis, another startup developer from MU, said during the forum that the university needs to improve the technology transfer process so faculty members can launch their companies faster.
“The university policies and procedures can be improved substantially in order to encourage faculty startups,” Davis said. “It’s a very disjointed process, in my opinion, based on my personal experience. I’ve talked with a lot of other faculty, and they believe it’s a difficult and cumbersome process as well.”
Galen Suppes, a chemical engineering professor, is still fighting with MU in court for the ownership rights to his discoveries, including a process that converts a byproduct of biodiesel into environmentally friendly antifreeze. Suppes told IP Advocate early last year that the MU tech transfer program was “totally broken and basically beyond repair.”
Another critic of the tech transfer process is Jeffrey Phillips, a professor in the MU School of Medicine who invented an acid reflux drug called Zegerid that is the university’s largest royalty earner.
Suppes told the Tribune recently that had the tech transfer reforms been in place when he was going through the process, his dispute would have been avoided. But he also said the university demands too much from faculty members who want to commercialize their discoveries.
Duncan said tech transfer “didn’t have leadership” when he arrived in fall 2008.
“It wasn’t that the university didn’t want to move into this; it frankly didn’t know how,” he said. “They had so many offices that worked in different business environments. It was critical to get those offices working together closely.”
Duncan hired Chris Fender to direct the Office of Technology Management, and Fender is about to hire his fifth staff member. The office, which Duncan said is funded entirely by revenue generated from technology licensing, helps faculty identify, assess, protect and market commercially viable intellectual property.
The number of deals closed jumped from a half dozen to 27 in 2008 and 31 in 2009, Duncan said.
A federal act passed in 1980 allows universities to control inventions and other intellectual property that resulted from research funded by the federal government and to license the inventions to other parties.
The success of a deal often hinges on the amount of money MU gets for its investment to patent technology and the division of royalties from product sales among inventors, the university and, in some cases, nonprofit or for-profit business incubators.
Jim Gann, director of MU’s Small Business Technology Development Center, said the university is working on templates for licensing agreements that could streamline the process.
Duncan said university researchers typically don’t have the time or expertise to run the companies that are trying to bring their ideas to the market.
Jake Halliday, president and CEO of the MU Business Incubator, said they’ve recently had success in recruiting MBA students from the business school to run startups after they graduate.
For example, Adroit Motion’s CEO, Xandra Sifuentes, led a team of MU students that came up with a business plan for the company that won a $20,000 NASA prize and two other awards. She was hired after graduating with a master’s in business administration in May.
Steve Wyatt, the MU vice provost for economic development, said former CEOs from mid-Missouri or executives looking for a new challenge could also be recruited to run local startups.
Duncan said that though it’s challenging to come up with research breakthroughs, “nothing is more challenging than starting successful companies — getting into a market niche, making money, facing people in harsh competition with you and being able to excel. So when faculty think it’s hard to start a company, that’s good because it really is.”
Rone also pointed out that it’s difficult to acquire funding in an academic institution to develop a product with the intention of licensing and commercializing. “This does not fit the historic academia model of science discoveries from research and publications,” she said.
But Duncan and Andrew Beverley said the culture has improved.
“If we look over the past several years, it’s amazing what the university has been able to do,” Beverley said. “I bet half of us here, four or five years ago, couldn’t have even defined tech transfer, and here we are talking about some fine tuning. There’s been tremendous progress.”

Power Lunch Participants
Presenter:
Rob Duncan; MU Vice Chancellor for Research
Participants:
Andrew Beverley; President, Landmark Bank;
Chairman, Centennial Investors
Mike Brooks; President, Regional Economic Development Inc.
Curt Davis; Director, MU Geospatial Intelligence Center
Steve Erdel; President, Boone County National Bank; Member, MU Economic Development Council
Chris Fender; Director, MU Office of Technology Management
Jim Gann; Director, Technology Business Development, Small Business Technology Development Center
Jake Halliday; President & CEO, Missouri Innovation Center, MU Business Incubator 
David Keller; President, Bank of Missouri; Member, MU Economic Development Council
Don Laird; President, Columbia Chamber of Commerce
Teresa Maledy; President, Commerce Bank; Member, MU Economic Development Cabinet
Rebecca Rone; MU Biodesign Fellow, Startup Developer
Steve Wyatt; MU Vice Provost for Economic Development
The Callaway Bank:
Gary Meyerpeter; President, Boone Co. Market
Kim Barnes; Chief Operations Officer

In 2009, licensing income revenue at MU reached $10 million, up from about $6 million in 2008. Research spending increased 11 percent from the previous year to $543 million. The number of patent applications filed rose from 49 to 68, and new invention disclosures jumped from 77 to 106.
MU estimates that the $481 million in economic activity generated last year through its research is roughly equivalent to 20 companies with revenues of $12 million each.