Quantity or quality?
Like most things in life, that’s not always an either/or question. Most people would prefer both. But as the University of Minnesota starts to shop its intellectual property a little more aggressively to investors, as evidenced by its first Life Sciences Showcase event at University Enterprise Laboratories Thursday morning, it’s something to think about.
From the day Jay Schrankler and Doug Johnson started to revamp the university’s Office for Technology Commercialization, the two business pros have insisted on a central strategy: the school would focus on developing and spinning out companies with the greatest “blockbuster” potential: a game changing technology, a major acquisition, a monster initial public offering. In other words, a venture capital model.
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There are several reasons why this makes sense. For one thing, the university only has the resources to spin out two or three companies a year so it seems reasonable to want the greatest biggest bang for your buck. As Schrankler noted, the traditional methods for measuring tech transfer- invention disclosures, patents-don’t mean anything unless you actually do something with them. Johnson, a former venture capitalist, admirably wants the school and the state to bold and ambitious, something Minnesotans are clearly not.and
But does this vision jive with economic reality? Venture capital is a high risk game with many more losers than winners. That’s why VC firms will build a broad portfolio with the hopes that one or two companies will become successful enough to offset the failures and earn nice returns for investors. In other words, throwing more darts at the board increases your chances of hitting the bulls eye.
The problem with launching game changing technologies is that you need money to do it. And investors, not just in Minnesota but around the country, have shown little appetite for early stage risk, preferring more developed and market ready companies.
MiroMatrix Inc., a university spin-off trying to commercialize the regenerative tissue work of Doris Taylor, has made clear it will rightfully follow the money, even if that means leaving Minnesota. VitalMedix Inc., a promising drug start-up, did leave Minnesota but still filed for Chapter 7 anyway. Growing new organs and creating new drugs take a lot of time. Who’s going to get these companies out of the starting gate, never mind cross the finishing line?
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Johnson admits early stage capital is a big problem. But people are trying to fix that. Affinity Capital Management and Triathlon Medical Ventures are creating a $10 million fund. The university is working with private developers to establish a $20 million accelerator fund to anchor a planned science park. Johnson also said he’s talking with his old employer, Norwest Venture Partners in Palo Alto, Calif., about creating a medical/information technology fund.
As for VitalMedix? Well, it was obviously a mistake to spin out the company that soon- the university should have developed it more internally, Johnson said. But many of the university’s technology won’t require require tons of capital, he said.
“It takes money but it doesn’t take that much money,” Johnson said.
With that said, here’s a list of technologies the university shopped to investors Thursday:
Giant-Magneto-Resistive Sensor (GMR) Technology– Contrary to its name, the invention is actually a small, hand held antigen sensor that can quickly detect Methicillin-resistant Staphylococcus aureus (MRSA), also known as the antibiotic-resistant “super bugs,” in patients before a hospital admits them. Since Medicare won’t reimburse hospitals for patients who contract MRSA during their hospital stays, the university says the device can help hospitals save $5 billion a year. The university plans to spin out a company led by its newest CEO-in-residence Tim Johnson.
New class of drug delivery biospheres– The tiny capsules that deliver anti-cancer drugs to tumors through a catheter are bioresorbable, which means they don’t linger in the body and potentiallycause blockages.
Heart Patch– A fiber-based biomatrix patch that can be directly into a patient and deliver tissue repairing embryonic stem cells to a damaged heart.
Upgraded Heart Failure Monitor- A bioimpedence-based monitor that doctors can implant on a single lead of implantable cardio defibrillators (ICDs) and pacemakers already in the patient. Designed to eliminate false positives and better detect heart failures with technology three to four times more sensitive than existing monitors.
Biomarker Analysis System– A potential spin-off company, the technology consists of a $90, one to ten minute blood serum test powered by software “trained” to identify proteins associated with colon and ovarian cancer and Alzheimer’s disease.
Thermochemical Ablation Technology– Veteran medical entrepreneur Mike Selzer will lead this soon to be spun off start-up that’s developing a cheaper, more patient friendly, catheter-based system that uses thermochemical energy to kill tumors without harming healthy tissue.
Sinusitis Technology– Created by Ben Arcand, a graduate of the university’s Medical Device Fellows program, the technology allows doctors in an office setting to treat severe sinus infections without surgery. The technology follows a similar strategy pursued by Maple Grove-based Entellus Medical in which a balloon catheter is inserted through a incision the upper lip and inflated to relieve pressure in the maxillary sinus. Arcand’s device, however, does not require any cutting.
