TRANSFERRING TECHNOLOGY AT EMORY: NEW FINANCING FOR RESEARCH

March 1998

Media Contacts: Holly Korschun, 404/727-3990, hkorsch@emory.edu,
Sarah Goodwin, 404/727-3366 - sgoodwi@emory.edu
http://www.emory.edu/WHSC/

In the 1995 survey published by the Association of Technology Transfer, Emory University ranked 19th among American universities in technology transfer, with the vast majority of products coming from the Emory School of Medicine in the fields of biomedicine and bioengineering. Like many universities nationally, Emory now actively encourages its researchers to patent their ideas and pursue marketing opportunities.

Over the past five years Emory has made great strides in moving discoveries more effectively from its own laboratories into production and distribution in the marketplace. Vincent La Terza, director of the Office of Licensing and Patent Counsel in the Office of Research, reports that since 1993, Emory has increased revenue from royalties from Emory discoveries by 60 percent to $2.3 million; increased participation in start-up companies based on Emory discoveries from one to 10; increased the number of licenses of Emory technology by 60 percent; increased the number of patents filed by Emory researchers by 50 percent; increased the annual invention disclosure rate from about 35 per year to 90 per year; and increased Emory's equity holdings in start-up companies from zero to more than $15 million.

Emory's Office of Technology Transfer (OTT) matches researchers and their ideas with companies or individuals desiring to develop an idea and market it. The office also helps guide researchers through the requirements of obtaining patents and works to ensure against conflicts of interest among researchers, the university and prospective investors.

When Emory receives a royalty for a product, a percentage goes to the inventor(s), and the remainder is divided among the inventor's laboratory, department chair, and dean and the university president, for continued research and support.

"This division of funds provides incentives for researchers to pursue patenting opportunities and for the institution to allow the researchers the latitude to follow a good idea," says La Terza. "In addition, Emory may help support the startup of a company by accepting its stock instead of cash payment for patent rights."

In addition to its internal operations of assisting Emory researchers, the technology transfer office has a strong external component, providing companies a port of entry into the university where they can inquire about investment opportunities. "We've seen more venture capitalists coming to Emory because they understand that the technology is here, and there are a lot of opportunities to invest," says La Terza.

Another intermediary in Emory's technology transfer office is Dana Hendricks, a scientist with a Ph.D. in immunology, formerly with the Centers for Disease Control and Prevention, who helps Emory researchers become more familiar with the marketing potential in their work. Dr. Hendricks notes that the challenge in technology transfer is to develop the middle tier of projects Ð that gray area that has the potential to provide solid, if not spectacular, returns. This middle tier is where the promise to develop the greatest number of new technologies lies.

"The real goal of technology transfer is to further important research that otherwise might go unfunded," Dr. Hendricks points out. " Some of this research will pay off in the short run in terms of dollars, but a lot of it will more likely pay off in the long run in terms of tiny pieces of knowledge added to the overall puzzle in understanding disease. So we need to balance the obvious needs of any university to fund operations, with the priority of finding answers to as many health problems as possible."

According to Dr. Hendricks, even the most seemingly esoteric research may have market potential. "Some basic science research involves development of useful new tools and techniques that can be commercialized. For example, new cell lines developed to study specific types of cancer are marketable because other researchers would gladly purchase them rather than spend a vast amount of time and money developing their own."

A third professional, Kevin Lee, recently joined OTT. Mr. Lee is a materials engineer and obtained an M.B.A. from Georgia Tech. According to La Terza, "Kevin is doing an outstanding job of enhancing our ability to nurture start-ups."

La Terza notes that his office is sensitive to keeping the mission of the university at the level of basic science research. He stresses that the process of technology transfer includes helping researchers find additional funding, which, in turn, will enable them to continue and expand their original research. "Generally, the investigators who come to our office are not looking for a personal return on their work, but rather, for further funding," he notes.

"The process of gaining new knowledge doesn't follow a neat, linear path," he adds. "It takes time for scientists, health care providers, and investors to understand innovative products and their risks, benefits, and optimal uses. Having a third party examine a research project helps ensure that the business end of science won't be overlooked."

Bioengineering in Cardiology

Cardiologists know that there are two major problems with angioplasty after the procedure is performed. The first is acute closure of the vessel, which usually occurs within 24 hours of the procedure, and the second is restenosis, the slow narrowing of the artery. For the past few years, doctors have implanted stents within treated vessels to prop the vessel open and thereby decrease the incidence of both complications. However, to prevent development of blood clots, doctors have to give patients high doses of blood thinners, which are associated with serious complications of their own.

Emory cardiologists Spencer King, M.D., and Neal Scott, M.D., along with hematologists Stephen Hanson, M.D., and Laurence Harker, M.D., have patented and licensed several new approaches to preventing arteries from narrowing following angioplasty. These physicians formed I2C, a Minneapolis-based medical device company, several years ago.

The company has achieved approval of a device called a temporary infusion catheter, based on an Emory patent, used to prevent restenosis of coronary arteries. The device can be positioned against the arterial wall, a little upstream of the area that needs to be treated. Tiny holes in the catheter allow the drug to seep out, where it is caught in the slower-moving part of the bloodstream and carried to the angioplasty site, where it reaches its highest concentration and can do the most good.

This group of physicians also has developed a drug-impregnated sheath to be wrapped around stents. Release of tiny amounts of anticoagulant in the area around the stent results in a high local concentration of the blood thinner and a low systemic concentration. The drug supply is temporary, intended only to get the patient through the critical first week after angioplasty.

A third technology uses low-dose radiation to inhibit formation of scar tissue. Emory investigators Ian Crocker, M.D., Keith Robinson Ph.D., and Spencer King, M.D., along with Ron Waksman, M.D., collaborated to develop a technique to deliver low-dose radiation to the angioplasty site. This technology is licensed to Novoste Corporation, in Norcross, Ga. Emory has completed a feasibility study of the device, which is currently the subject of a multi-center trial. Novoste is a publicly traded company and its share holders have seen their stock rise steeply in the past several months.

Patience Rewarded

Although investment in technology transfer requires patience and the payoff can be elusive, many researchers do see their ideas brought to fruition. In 1993, Emory cardiologists Russell Medford, M.D., and R. Wayne Alexander, M.D., became the first to identify a protein that was a potent inhibitor of certain inflammatory responses in endothelial cells (cells that line the inside of blood vessels) that lead to the development of deadly atherosclerotic plaque. The protein regulator tells endothelial cells damaged by oxidation to express vascular cell adhesion molecule - 1 (VCAM-1), which protects the blood vessels from developing plaque.

Based on this initial work, in 1995 Medford and Alexander founded AtheroGenics, Inc., in Norcross, Ga, Emory's first Alliance Technology Ventures (ATV) backed startup company. Emory granted AtheroGenics an exclusive license under certain patents for diagnostic and therapeutic products useful for atherosclerosis. Dr. Medford became the first CEO of AtheroGenics, which has rapidly developed into a broad-based pharmaceutical company, with numerous patents and projects in atherosclerosis, cardiovascular disease, post-angioplasty restenosis, colon cancer and diagnostics for active coronary disease. In December the company began Phase I clinical trials of their first compound for the treatment of atherosclerosis, part of a new class developed by AtheroGenics based on the original pathways discovered in the Emory research. Sometime in 1998 they hope to begin human clinical trials of a vascular protectant for the treatment of colon cancer.

Triangle Pharmaceuticals is a publicly traded pharmaceutical company focused on the development of small molecules for the treatment of viral disease and cancer. Emory Professor Raymond Schinazi, Ph.D., is scientific founder of the company. He and Dennis Liotta Ph.D., Emory professor of chemistry and vice-president for research, serve on Triangle's Scientific Advisory Board. Triangle has licensed three antiviral compounds from Emory used in the treatment of HIV and AIDS: FTC, CS-92 and DAPD.

Triangle is currently sponsoring Phase I/II clinical trials for CS-92 and FTC and is completing pre-clinical development of DAPD. At the first two dose levels in a small group of patients in the ongoing trial, FTC was shown to significantly reduce the viral load of HIV-1 in plasma.

Atrionix, a California-based company, was founded by Emory cardiologist Jonathan Langberg, M.D., director of Emory's Electrophysiology Laboratory within the Department of Cardiology, and colleagues at the University of California at San Francisco and Stanford. Atrionix is developing and commercializing medical devices for the treatment of atrial fibrillation.

Emory has signed an option agreement and will soon sign a definitive license agreement with Octagen Corporation. Pete Lollar, M.D., of Emory's Hematology/Oncology Division is scientific founder of Octagen, a company whose core technology comprises several second generation factor VIII therapeutic proteins for the treatment of hemophilia.

Chlorine-based technology for bleaching and pulping in the paper industry produces some of the most carcinogenic chemicals known to man Ð dioxins. Through a consortium with the Forest Products Lab and several members of the bleaching and pulping industry, Emory jointly owns patents that protect environmentally benign processes urgently needed to replace the current chlorine-based chemicals. The new methods use certain catalysts, called polyoxometallates (POMs) for bleaching and pulping in the paper industry. A Wisconsin-based startup company (tentatively called POMCO) is being organized to assist in developing the POM-based technology through a pilot demonstration plant.

Another Atlanta-based company, CytRx, was formed in 1985 by Robert Hunter, M.D., Ph.D., a former professor in Emory's Department of Pathology and Laboratory Medicine. Emory licensed a series of patents to CytRx for compounds that appeared useful for treating cardiovascular disease. CytRx and its subsidiaries, Vaxcel and Vetlife, are continuing to explore these compounds for other indications and Vaxcel is collaborating with Emory's Rafi Ahmed, Ph.D., in vaccine adjuvant research.

Emory radiologic physicist Ernest Garcia, M.D., has been earning royalties for his lab and for the university for several years now, first from his team's software product CEqual, which generates a two-dimensional polar map of the heart, and more recently, from PerfSPECTive, which provides three-dimensional images.

CEqual, developed in collaboration with Cedars Sinai Medical Center in Los Angeles, is sold by a number of large companies and is currently in use in several hundred medical centers. PerfSPECTive, developed in collaboration with Georgia Tech, is currently being marketed by Siemens.

"The products we've developed assist physicians in interpreting myocardial perfusions scans," says Dr. Garcia. "We've developed what we call the Emory cardiac toolbox that has software to quantify information and create a picture of the distribution of blood flow."

Ultimately, Dr. Garcia would like to develop other toolboxes, such as one for angiography. "If you work in an applied science, you need to take on the responsibility of seeing a good idea through the process of commercialization," he says. "That is the only way that medicine will move forward, if you develop your product to the point where others can use it."

"All the royalties do is enable me to do more research," says Dr. Garcia. "I've looked into starting a business at times, but it is more rewarding for me to work at a research institution. I don't have a board of directors to please, and I can follow my research in the direction I find most interesting, regardless of the financial opportunities. In terms of quality of life, it is tough to beat this arrangement - I have the best of both worlds."

Other companies based on technology developed at Emory include the following:

Renalogics, formed in 1997, is a virtual ATV company founded by Emory researchers Juha Kokko M.D., and Kamil Badr M.D., experts in the treatment of glomerulonephritis. Emory granted Renalogics an exclusive license under certain patent applications which claim the use of IL-13 for treatment of kidney disease. Renalogics currently is funding substantial research in the laboratories of Drs. Kokko and Badr.

Virtually Better, Inc., is housed in the Atlanta Technology Development Center (ATDC). The company uses software and a virtual reality device developed by Emory psychologist Barbara Rothbaum, Ph.D., and a Georgia Tech engineer that simulates anxiety-producing environments to help patients overcome phobias, including fear of heights and fear of flying. Neotonus is developing devices to use magnetic stimulation to muscles and neurons to treat conditions such as incontinence.

Circular Solutions was founded by Emory psychiatrists J. Wiess, Ph.D., and Robert Bonsall, Ph.D., to manufacture and sell a novel cage used for rodent research that allows for the delivery of bioactive agents to the rodent brain while at the same time allowing the animal freedom of movement and minimizing stress.

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