Innovation, influence and business in America's medical cities.

Medical Biosciences Building, University of Minnesota

MINNEAPOLIS, Minnesota — If a university’s tech transfer program drops $95 million in the middle of an urban jungle and no one’s there to see it, does it make a sound?

For the University of Minnesota, the answer is probably no. Politicians, venture capitalists and entrepreneurs have long criticized the school for inhibiting innovation rather than creating it.

But that criticism is getting old, or at least it should be. Under Jay Schrankler and Doug Johnson, the school’s tech transfer program has made enormous strides.

The Office of Technology Commericalization has professionalized the process, hiring experienced technology managers to evaluate potential technologies from professors and students to determine if they should be licensed or spun out. The school also recruited several “CEO-in-residences,” industry veterans to guide potential start-up companies. The U has especially focused on clean energy, health care and biomedical technologies, industries of the future.

Their efforts have been paying off. Consider the latest numbers released last week. For fiscal 2009, licensing income totaled $95 million, a 10 percent gain from the previous year. Excluding royalties from Ziagen, an anti-AIDS drug license to GlaxoSmithKline, licensing revenue rose 11 percent to $8.7 million.

Admittedly, these aren’t breathtaking numbers, especially for a school that raked in more than $600 million in research money this past year. But considering the sorry state of U tech transfer just a few years ago, the figures represent real progress. Patent applications are up 12 percent and the number of revenue-generating licensing agreements rose 9 percent to 306.

Most importantly, consider the quality of U-bred start-ups.

• VitalMedix Inc. is developing a drug that can keep patients suffering massive blood loss alive long enough to reach a hospital.
• BioCee Inc. was one of nearly 40 start-ups across the country to receive the first wave of funds from the Advanced Research Projects Agency-Energy (ARPA-E), a new program run by the U.S. Department of Energy to finance development of next-generation clean energy technology.
• Orasi Medical Inc. is helping drug companies target Alzheimer’s disease through software that will help Big Pharma test their therapies earlier in the clinical process. The company recently raised $3.5 million from angel investors.
• Medication Management Systems Inc. makes software that helps patients, pharmacists and employers better manage prescriptions. Operationally, the company will break even this year and has won contracts with several large companies like General Mills and Wal-Mart.

The university is also spending $292 million to develop a 700,000-square-foot biomedical research park on the campus meant to speed the translation of groundbreaking research into commercial reality.

Impressive stuff. But the U gets zero credit for its work.

“The university has done everything we asked them to do,” said Peter Bianco, director of business development for Halleland Health Consulting in Minneapolis. They aren’t the problem anymore, he said.

Instead, politicians continue to blame the U for Minnesota falling behind states like Wisconsin in biomedical investment and start-up creation.

During a keynote speech to The Collaborative’s annual venture capital conference last fall, Gov. Tim Pawlenty chided the U for lacking a risk-taking, entrepreneurial culture and not working well with outside companies. Ouch.

Comments like this really piss off U officials, given the school’s progress and the state’s inability to do relative basic stuff like pass an angel investment tax credit, a point the U made in its annual research report.

“Hennepin Life Sciences, a start-up launched in October 2009 that is based on University technology, has reported being aggressively courted by South Dakota, Iowa, Wisconsin and Manitoba, all of which are offering various incentives to entice the company to relocateincentives that do not currently exist in Minnesota,” the report said. “Economic development requires an entrepreneurial ecosystem that encourages and supports innovation through creative, forward-thinking public policy that incents and nurtures its development into thriving companies.”

In other words, what have you done lately Pawlenty?

In truth, the U will never win plaudits for growing modest licensing income. To silence its critics, the school needs a Big One, a blockbuster technology that will eventually lead to monster IPO or a billion-dollar acquisition by a major company.

U officials think they have such a thing in Miromatrix, a start-up trying to commercialize the regenerative organ work of Dr. Doris Taylor. But such technologies will take years, if not decades to develop.

In the meantime, the U will just have to take its lumps … and hope its moment will eventually come.