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Patently lucrative: the intellectual property that makes big money for the U

Robert Vince
MinnPost photo by Greta Kaul
Compounds developed in Robert Vince’s University of Minnesota lab to combat the HIV virus made the University more than $600 million dollars.

In the 1980s, when the medical community was searching for treatments for the HIV — at that time, with few exceptions, a death sentence — Robert Vince’s University of Minnesota lab submitted compounds he thought might hamper the virus’ ability to take hold of people's bodies to the National Institutes of Health for testing.

Ultimately, the compounds, dideoxycarbocyclic nucleosides, were commercialized by the company now known as GlaxoSmithKline and used to make the drug abacavir (also known by its brand name, Ziagen). It was approved by the Food and Drug Administration in 1998.

Before its patent expired a few years ago, the drug made the University more than $600 million dollars, according to Vince, now the director of the school’s Center for Drug Design.

But it’s not the school’s only intellectual property hit. In the 2017 fiscal year, 273 technologies — everything from varieties of mums, grapes and blueberries, to cancer treatments and a virtual driving mirror — generated about $22.8 million in revenue for the University of Minnesota, according data on patent revenue from the school. That’s a pretty good haul: A study by the Milken Institute, a think-tank, ranked the U 14th among U.S. universities on its technology transfer and commercialization index, which takes into account commercialization licenses issued, licensing income, patents issued and start-ups, in 2017. It ranked seventh in 2006.

And while $23 million is a drop in the bucket of the institution’s more than $3.8 billion budget for 2017, it’s still a lot of money that goes to fund research and departments at the school.

Monetizing intellectual property

It’s only in the last 40-or-so years, since 1980, that U.S. universities have made sizable chunks of change from intellectual property. That’s when Congress passed the Bayh-Dole Act.

In this act, lawmakers handed research institutions the ability to commercialize technologies developed with federal funding, which formerly belonged to the federal government. At the time, the federal government held some 28,000 patents, and had licensed less than 5 percent of them, according to the Government Accountability Office.

This paved the way for research institutions, including the University of Minnesota, to expand technology commercialization efforts.

At the U, it works like this: if a researcher has developed something they think is novel, they report it to the Office for Technology Commercialization.

Revenue from patented technology for the University of Minnesota by fiscal year, 2007-2017
Patents and other licensed technologies earned the University of Minnesota more than $542 million between 2007 and 2017.
Source: University of Minnesota

“We have a staff, pretty much all of whom have backgrounds in academia and/or private industry, (who) will evaluate the invention, and will file it for appropriate IP protection,” said Thomas Hutton, operations director and chief of staff for the U's Office for Technology Commercialization. Many of the protections are patents, though copyrights and trademarks apply in some scenarios.

When it comes to patents, the office is looking for two things: whether it’s something that’s possible to patent, and whether that patent is something the U can protect.

“It has to be novel … it has to be useful, it has to have some practical application, and it has to be inventive or non-obvious,” Hutton said.

The office then looks for businesses or other partners to license the technology to. Often, it’s the researcher that suggests the university talk to a specific company, Hutton said.

Honeycrisp apple
Perhaps the U’s best-known piece of intellectual property, the Honeycrisp apple, generated $10.7 million for the U in the last 10 years.

How much it costs to license the technology depends on a few factors, including deals for similar technologies, how far along the technology is in its development, demand for the technology and how much revenue the licensee is likely to generate.

With federal funding, the rules surrounding commercialization of technology are usually pretty straightforward. When it comes to research funded by foundations or industry, the terms of commercialization can vary, Hutton said.

In the last decade, according data provided by the U, the top revenue-generating technologies for the University were:

  • The compounds behind abacavir: $370.6 million

  • Vaccines and treatments for mystery swine disease, which costs swine producers in the U.S. an estimated $640 million annually, made the U $25.8 million.

  • A technology for introducing nucleic acid into the DNA of a cell: $16.4 million.

  • The “sleeping beauty” gene-editing technique, developed by U of M researchers studying fish, is now used in cancer immunotherapies. It was licensed and made the school $16.2 million.

  • The Honeycrisp apple, perhaps the U’s best-known piece of intellectual property, generated $10.7 million for the U in the last 10 years. Its U.S. patent expired in 2008, but foreign patents on the apple breed continue to generate money.

Revenue-generating patents for the U, 2007-2017
This table contains the names of patents and other licensed technologies owned by the University of Minnesota and the total amount of revenue generated for the university by that technology from fiscal year 2007 through fiscal year 2017. Clicking on the column headings re-sorts the table and you can search the patent names by typing in the box at the upper right.
Source: University of Minnesota

Patent revenue

The revenues from patents is split three ways between the inventors as a group, the departments those inventors work in and the school’s Office of the Vice President for Research, according to university policy. Royalty money from Abacavir actually helped to found the Center for Drug Design, Vince said.

It’s nice, the center's director said, because research grants from foundations or the federal government tend to restrict the type of research that can be done. Not so with royalty money.

“When I get grants from the NIH, if I get a grant to work on a herpes virus, I couldn’t use that money to — say, (work on) ideas about Alzheimer’s,” Vince said.

That’s actually something the Center for Drug Design is working on now — for example, a camera that scans the retina for signs of a protein that causes plaques that portend of Alzheimer's disease.

“We can look at the retina of the eye, tell whether somebody is going to be getting Alzheimer's,” Vince said.

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Comments (2)

Apple Patents

The Honeycrisp apple was a huge success for the U of M. Unfortunately, the lesson the University learned was to become even more greedy. The policy now is that for future potential blockbuster Apple varieties (and maybe other fruits), the U of M will no longer license plants to be sold to the public, but is instead negotiating exclusive deals with a small number of commercial orchards to get royalties on the fruit, rather than on the trees.

The result of this is that MN gardeners no longer have access to the newest and best U of M developed fruit varieties. This is a slap in the face to the taxpayers of MN who fund the University and should have access to the fruits of the research there.

The U of M needs a new policy, so that new fruit varieties are made available on reasonable terms to MN gardeners for their personal non commercial use.

Henry Wellcome

This story has another Minnesota connection. One of the companies that formed GlaxoSmithKline was Burroughs Wellcome. I believe that it was Burroughs Wellcome that was the leader in HIV drugs. Burroughs Wellcome (founded in 1880) became Glaxo Wellcome in 1995 and then became GlaxoSmithKline in 2000. Silas Burroughs died in the 1890's. Henry Wellcome controlled and guided the company from then until before his death in 1936.

Henry Wellcome was born in Wisconsin. But his formative years, from age 8 to age 17 were spent in Garden City, MN, near Mankato. He then moved to Rochester to work near Dr. William Mayo. He went to pharmacy school in Chicago and Philadelphia, then worked in New York City before moving to London, England to make his fortune.

When he died in 1936, his fortune funded the Wellcome Trust, today one of Britain's largest charities.