From R&D to revenue

How Vanderbilt is turning greater-good research into cash [From our print edition featured in Monday's City Paper]

Email | Print By Erin Lawley

Sifting through the data of Vanderbilt University Medical Center’s 1.7 million electronic medical records, the last thing on Daniel Masys’ mind is making a buck. He’s intent on finding patterns in the EMRs of patients who have experienced bad medication side effects.

“I’m just after the science,” explained Masys, VUMC’s chair of biomedical informatics, whose work is funded by a $6.4 million grant from the National Institutes of Health. “I’ve just always been interested in trying to make the world a better place.”

But if Masys and his co-investigator hit their target — identifying common genetic markers in these patients’ DNA samples, which could be used to predict and prevent harmful reactions in others — there may be a business opportunity to license that technology or develop a commercial product.

That’s where Vanderbilt’s Office of Technology Transfer and Enterprise Development comes in. Led by Chris McKinney, the office is responsible for protecting Vanderbilt’s intellectual property and making its discoveries available for public use by assisting with research contracts, securing patents, commercially licensing those patents and even assisting with start-up companies.

Based on those efforts, Vanderbilt brought in $11 million in licensing revenue in the 2009 fiscal year. That’s almost three times as much as in 2004.

Institutional good

Of course, many of the research projects underway at Vanderbilt may never reach McKinney’s desk. But the university’s $520 million in externally funded research projects — in fields as diverse as sociology, chemistry, music and economics — still has immense value to Vanderbilt, the scientific community and the economy. (Click here for a snapshot of some current studies.)

“The economy’s been in a tough time, and we’re seeing it, but there’s always a place for innovation because that’s where you get a competitive advantage,” McKinney said.

The tech transfer office has licensed technologies as diverse as an assessment program for school principals and a device for treating laryngeal paralysis. It has helped start companies like Nashville-based Informatics Corp. of America, which is commercializing Vanderbilt’s EMR technologies, and TyraTech, a Florida company commercializing Vanderbilt-developed earth-friendly pesticides.

Of the licensing revenue Vanderbilt receives from these and other projects, more than a third goes to the inventor/creator and 20 percent goes to the school. The rest is broken down in nearly equal parts for the department, legal reimbursements, laboratory costs and technology research and promotion.

But the money isn’t the main benefit to universities that are active in technology transfer, said Arundeep Pradhan, president of the Association of University Technology Managers, the trade association for 3,500 technology transfer professionals globally.

“Tech transfer offices don’t focus on revenue because when research is early, you have no crystal ball that says this one is going to make $100 million and this one is only going to make $10,000. No one has that,” he said. The objective is just to get that technology out the door so it can benefit the public.

But with industry becoming more and more involved in funding academic research, it may be that universities and their faculty pay more attention to that potential bottom-line impact, or at least look beyond a singular interest in science to potential commercialization.

According to AUTM’s annual licensing activity survey, U.S. institutions performed $3.4 billion in industry-sponsored research from 2007, a 15 percent increase over 2006 and 5 percent more than the rise in federal expenditures in the same time frame. The survey reports $48.8 billion in research expenditures to American universities in 2007, compared to $45 billion in 2006.

“It’s a culture that’s definitely shifting more toward being aware of industry in all of its respects,” McKinney said.

The greater good

For now, most researchers are like Masys: simply intent on expanding knowledge, discovering how and why something works the way it does or working toward solutions to some social, environmental or health problem.

The output of that research, typically in the form of a published article explaining the study’s findings, is aggregated with existing knowledge and taken into account in the work of other researchers. A discovery that becomes a viable commercial product or technology could be years removed from the actual research and be the result of the work of hundreds of people on the other side of the globe.

Dennis Hall, vice provost for research, uses the iPhone to illustrate the point:

“If you look at the amount of technology in there, it’s extraordinary,” he said. “What you’re looking at is the result of probably hundreds of researchers working in universities and industries over decades.”

Only a handful of campuses can claim $100 million breakthrough inventions that turn into cash cows, Hall said. “Most people just contribute to the knowledge base.”

At Vanderbilt, contributing to that knowledge base is not only encouraged, it’s expected of nearly every faculty member. About 94 percent of Vanderbilt’s tenure-track faculty members participate in some form of research. This fall, 1,019 investigators hold 2,185 awards at the university and medical center.

To meet the research expectation, faculty identify funding sources — most commonly from government agencies like the NIH, National Science Foundation and Department of Defense — then submit grant proposals. A spokesperson for the NIH, which accounts for more than half of Vanderbilt’s external research dollars, this is a highly competitive process: In 2008, only 20 percent of NIH grant proposals were accepted.

Although the medical research agency no longer ranks universities based on total award funding, Vanderbilt’s own data analysis placed the school of medicine 10th in the nation — its highest-ever ranking — for medical school funding in 2008 with $282.3 million. In 2005, the most recent year the NIH produced rankings, the medical school was 15th among its peers and Vanderbilt as a whole was No. 19.

When the grants come in, the funds are used to purchase supplies, buy equipment, pay for utilities and in some cases cover researchers’ salaries. However, given the complexity of the subject matter being investigated, the predefined timeframe of a research grant, typically a few years, may not be long enough to complete the study. So faculty must apply for funding renewal or new grants to continue their work. Several VUMC researchers are holding NIH grants they’ve had for more than 30 years.

“Some would say a grant never ends,” said Susan Wente, associate vice chancellor for research at VUMC.