Policy

Top bioscience lawmaker calls out the University of Minnesota

Rep. Tim Mahoney (D-St. Paul) has good reason to feel a fresh spring in his […]

Rep. Tim Mahoney (D-St. Paul) has good reason to feel a fresh spring in his step these days.

He helped pass  long overdue  tax credits for angel investors and research and development spending, a feat that earned him a prime spot (second from the left) behind Gov. Tim Pawlenty when the presumed Republican presidential candidate signed the bill amid warm applause at events hosted by LifeScience Alley and the Minnesota High Tech Association.

But rather take a holiday, the chairman of the House Bioscience and Workforce Development Committee has already selected his next target: the University of Minnesota.

“If I were you, I would pay attention to tech transfer,” Mahoney said during a recent phone call.

Despite some improvement  in recent years, the university is still “terrible” at converting its research into viable companies, he said. So unless the university makes significant progress by the end of the year, Mahoney will introduce a bill that either privatizes tech transfer or calls for the university to hire a “strong entrepreneurial” president that will “really shake up” the Office for Technology Commercialization (OTC).

Wow. Where to start? Lawmakers have long bashed the university’s tech transfer efforts, so that’s nothing new. But Mahoney’s ultimatum kind of comes out of nowhere.

Under vice president for research Tim Mulcahy, the school has made progress, spinning out promising startups like Miromatrix Inc., boosting licensing income and hosting technology showcases for potential investors.

Apparently, Mahoney is not impressed. Ironically, his chief complaint concerns one of OTC’s proudest reforms: the use of experienced “technology mangers” to determine whether the school should launch a company, license the research, or reject it all together.

OTC director Jay Schrankler and Venture Center chief Doug Johnson have long emphasized quality over quantity. The school’s goal is to spin out up to three potential “blockbusters” a year by carefully vetting the technologies in a thoughtful, systematic way to ensure success.

But that deliberate, painstaking process has made the university “too risk adverse,”  Mahoney said.

“They’re screening companies to death,” he said.

It’s an argument I’ve (sort of) made too. Venture capital is a game of high risk: most startups will fail than succeed. Therefore, the more companies you put into play, the more likely at least one will hit it big.

And there’s only so much the school can do to ensure success. Take VitalMedix Inc. Despite developing a promising drug, the university-bred startup ultimately folded when it couldn’t raise enough money.

Schrankler says it’s a tough environment to attract capital, which is true. But did VitalMedix fail because of the tough economy? Or did it fail because it simply wasn’t a fundable company? Either way, the company still tanked.

The real issue, I suspect, is resources. If OTC had unlimited money and employees at its disposal, I guarantee the university will be spinning off more than three companies a year. But we live in the real world of budget deficits and impatient politicians.

In truth, Mahoney is not the only person out there unhappy with the school’s tech transfer efforts. Though Mahoney’s bill may ultimately go nowhere, it will shine a very harsh spotlight on the state’s top research university.

Game on.

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