Life Science Patents Enrich Academe

Image: Anne MacNamara Life sciences contribute the lion's share of patent revenues at leading US universities, outpacing contributions from physical science, information technology, and other fields. Life scientists also supply most of the inventions patented by the 10 technologically strongest US institutions, according to a study provided to The Scientist by research and consulting company, CHI Research. In 2001, the top 10 US universities generated 689 life science patents, compared with 263 in information technology and 245 in all other technology categories. These life science discoveries contribute 42% to the overall tech strength portfolio at these universities, compared with a 35% contribution by information technology and a 23% contribution from all other technology categories. The technical strength of a university indicates the extent to which its inventions influence others in their fields, as determined by how often its patents are cited by other patents. Life sciences contribute more than do other fields to institutions' technological and research strengths because "companies in the life sciences have a lot of experience in commercializing ideas from universities," says John Fraser, director of technology transfer at Florida State University (FSU). "[Companies in] engineering and other fields do not have this same experience because they tend to develop ideas themselves. The engineering fields also are more process oriented, while the life sciences are more product oriented. That makes a difference." INFLUENTIAL INVESTMENTS To obtain the measure of technological strength, CHI Research counted the number of US patents awarded to each university (exclusive of design and special-case inventions). This number is multiplied by a current impact index, a measure of how frequently the institution's patents for the previous five years are cited by all other patents in the current year. The University of California system, for example, received 275 life science patents in 2001, far more than those received by any other US university (based, no doubt, on the sheer number of researchers at UC). But the impact of these patents, or how frequently they were cited, is substandard: 0.68 compared to an average of 1.0. As a result, UC received a weighted score of 188 in life sciences technological strength (275 patents multiplied by 0.68 in current impact). By contrast, the California Institute of Technology was awarded only 49 life science patents last year. But because its impact index was 2.01, the weighted result catapulted Caltech into second place with a life sciences technological strength score of 99. "Technological strength is a citation-weighted size index," says Tony Breitzman, vice president of CHI Research. "It is quantity multiplied by quality, if you will." Another measure of technological strength is called science linkage--the average number of scientific papers referenced as prior arts in an institution's US patents. This metric is based on the notion that technically innovative patents include a greater number of references to recent scientific literature. Top-ranked UC drops to sixth place with a science linkage score of 21.3, while fifth place University of Texas jumps into first position with a science linkage score of 43.1. SHOWING THE MONEY But technological strength in the life sciences does not correlate with income from licensing inventions. Five of the top 10 universities in life sciences strength (Caltech, University of Texas, Johns Hopkins University, the University of Wisconsin, and Duke University) did not make it into the top 10 in licensing income for the previous year. Based on licensing income, the top 10 US universities in 2000 were the University of California system, Columbia University, Dartmouth College, Florida State University, Stanford University, Massachusetts Institute of Technology, University of Washington, University of Pennsylvania, University of Florida, and Georgetown University, according to the latest survey by the Association of University Technology Managers.1 These 10 revenue magnets averaged $71 million (US) each in license fees in 2000. Across the board, US universities took in an average of $4 million. By contrast, European universities lag far behind, having only recently started to license their research discoveries to businesses. Licensing revenues at the University of Cambridge exceeded £1 million in 2001 for the first time. "There is an urgent need to train people in technology transfer in the UK," says David Secher, director of Cambridge's Research Services Division. While universities and companies occasionally fight in court over their patents, life sciences discoveries were also the major drivers behind revenues from commercial licenses.2 Licensing revenue for the University of California's nine campuses led US academic institutions at $261.5 million. But $200 million of this was a one-time payment from Genentech to settle a longstanding patent infringement lawsuit brought by the university over genetically engineered human growth hormone. "Our life sciences income has been fairly stable over the last three years, but we have a number of key patents expiring," says Alan Bennett, executive director of UC's Office of Research Administration. Because many fundamental discoveries in the life sciences were patented in the early 1980s, associated licensing revenues are starting to evaporate. The Cohen-Boyer patents (named after Stanford biologist Stanley N. Cohen and UC biologist Herbert W. Boyer in 1980) generated more than $200 million for the two schools until expiration in 1997. Those patents broadly covered the basics of recombinant DNA technology.3 Loss of Cohen-Boyer revenue represents a drop of about $12 million annually to each school. "Our life sciences income should be stable because other, newer inventions are coming online," Bennett says. In 2000, UC received $61.5 million in royalties (excluding the $200 million Genentech settlement). Of this, 88% came from life sciences. Including the Genentech payment, life sciences revenues contributed 12.2% toward the university's total research investment in 2000. In 2001, overall revenue grew to $82.9 million, but the life sciences contribution fell to 78%. This year, life sciences are expected to contribute a robust 70% of the total picture. At Columbia University, more than 90% of the school's $138.6 million was derived from royalties for 143 life science patents, says Lauren Marshall, university spokesperson. The majority of these were in pharmaceuticals, she says. Columbia took in the equivalent of 40% of its total research expenditures through life sciences licensing. Sixteen licenses generated more than $1 million each, the largest such portfolio among US universities. The Dartmouth College windfall came almost solely from the sale of stock in Medarex, a Princeton-based biopharmaceutical company. Dartmouth licensed antibody patents to Medarex in 1987 in exchange for equity, says Patti Beaulieu, the school's technology licensing associate. Revenue from other licensing totaled more than $1 million, she says, with 90% of that derived from life sciences discoveries. Beaulieu expects the school to maintain that level of earnings. In 2000, FSU brought in $67.5 million in licensing revenues, putting it in fourth place based on dollar volume. Nearly all of this revenue (except for about $1 million) came from Bristol-Myers Squibb for exclusive use of a patented process to manufacture the anticancer drug Taxol. This amount is nearly half the university's total research expenditure for the year. "Simply put, we have a mega-blockbuster hit," Fraser says. These royalties peaked in 2000 and have been decreasing since then, due largely to increasing competition from generic manufacturers. This year, Taxol royalties will fall by more than half to around $30 million. FSU researchers are developing Taxol analogues and, in collaboration with drug-giant Wyeth, have a compound in Phase I clinical trials. "We hope these new analogues will be on the market by 2006 or 2007, and if we're incredibly lucky, they'll be as good as or better than Taxol, and our royalties will go back to where they are now," Fraser says. Ted Agres (tedagres@lycos.com) is a freelance writer in Washington, DC. References 1. T. Agres, "The money-making academy," The Scientist, 16[7]:7, April 1, 2002. 2. T. Agres, "Universities war with big pharma," The Scientist, 16[16]:56, Aug. 19, 2002. 3. S.N. Cohen, H.W. Boyer, "Process for producing biologically functional molecular chimeras," US Pat 4,237,224, 1980.

Life Science Patents Enrich Academe

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