University Perspectives on Innovation: September 28, 2005 BMES-IDEA meeting

Johns Hopkins University

William R. BrodyWilliam R. Brody

President, The Johns Hopkins UniversityPresident, The Johns Hopkins University

University Perspectives on University Perspectives on Innovation:Innovation:

September 28, 2005September 28, 2005BMES-IDEA meetingBMES-IDEA meeting

Johns Hopkins University

Subtitle: Bill Brody’s Recipe for Subtitle: Bill Brody’s Recipe for Successful Entrepreneurship –Successful Entrepreneurship –

Top 10 Do’s and Don’tsTop 10 Do’s and Don’ts

DisclaimerDisclaimer

Caution: Caution:

The views expressed in this presentation represent those of William R. Brody and should not be construed to represent the official position of The Johns Hopkins University, which, in any event, doesn’t have an official position, because no one can really speak for the entire university

Achtung!Achtung!

The material presented herein, other than that The material presented herein, other than that stolen (or borrowed) by the author is the subject stolen (or borrowed) by the author is the subject of a pending patent application by the author. of a pending patent application by the author. Any use, reproduction, quotation, or other use of Any use, reproduction, quotation, or other use of this material without first obtaining a license (or this material without first obtaining a license (or material transfer agreement) from William R. material transfer agreement) from William R. Brody and The Johns Hopkins University Office Brody and The Johns Hopkins University Office of Technology Licensing is expressly verboten. of Technology Licensing is expressly verboten. Such license negotiations shall not take longer Such license negotiations shall not take longer than 36 months to complete.than 36 months to complete.

Technology Transfer:Technology Transfer: Started in 1884 Started in 1884

1876 Johns Hopkins University Founded

In 1879 Johns Hopkins chemistry professor Ira Remsen discovers saccharin.

In 1884 assistant Constantin Fahlberg patents it.

Early Approach to PatentingEarly Approach to Patenting While at U. Chicago in 1942, While at U. Chicago in 1942,

Russell Morgan invents the x-ray Russell Morgan invents the x-ray phototimerphototimer

The University sells the patent for The University sells the patent for $1 to GE$1 to GE

Morgan moves to Johns HopkinsMorgan moves to Johns Hopkins

U of C solicits Mrs. Morgan for U of C solicits Mrs. Morgan for donationdonation

The “Mertonian Tradition” --The “Mertonian Tradition” --Open ScienceOpen Science

In 1970 Nobelists Dan In 1970 Nobelists Dan Nathans and Hamilton Nathans and Hamilton Smith publish discovery Smith publish discovery of restriction enzymesof restriction enzymes

““It never even occurred It never even occurred to us” to seek a patentto us” to seek a patent

The Bayh-Dole Act of The Bayh-Dole Act of 19801980

Intended to promote the commercialization Intended to promote the commercialization of government-sponsored researchof government-sponsored research

Prompted by low rate of licensing patents Prompted by low rate of licensing patents from government research (many of which from government research (many of which were defense-related)were defense-related)

Intent was Intent was notnot to create a new revenue to create a new revenue stream for universities (though that effect stream for universities (though that effect was seen as a possible benefit)was seen as a possible benefit)

Technology Transfer Technology Transfer Revenue GrowthRevenue Growth

0200400600800

10001200

FY1991FY1992FY1993FY1994FY1995FY1996FY1997FY1998FY1999FY2000

Revenue in $ millions

Source: AUTM Licensing Survey FY2000

U.S. Universities Gross Licensing Revenue – FY1991 to FY2000

Universities Vary Widely in Universities Vary Widely in Generating Licensing IncomeGenerating Licensing Income

InstitutionInstitution

Licenses Licenses ActiveActive

Income in Income in FY2000FY2000

Av. Av. Income Income per per LicenseLicense

ColumbiaColumbia143143 $138,562,0$138,562,0

0000$ 969,000$ 969,000

U. PennU. Penn 4545 $ $ 26,493,00026,493,000

$ 589,000$ 589,000

U. Ca. SystemU. Ca. System 781781 $261,522,0$261,522,00000

$ 335,000$ 335,000

EmoryEmory 4646 $ $ 10,672,00010,672,000

$ 232,000$ 232,000

Johns HopkinsJohns Hopkins 166166 $ $ 14,376,00014,376,000

$ 87,000$ 87,000

BaylorBaylor 115115 $ $ 9,415,0009,415,000

$ 82,000$ 82,000

U. WashingtonU. Washington 385385 $ $ 30,213,00030,213,000

$ 78,000$ 78,000

HarvardHarvard 163163 $ $ 12,195,00012,195,000

$ 75,000$ 75,000

U. PittsburghU. Pittsburgh 4747 $ $ 3,259,0003,259,000

$ 69,000$ 69,000

Washington U.Washington U. 255255 $ $ 8,396,0008,396,000

$ 33,000$ 33,000

Source: AUTM Licensing Survey FY2000

Why is this?Why is this?

Success in patent licensing requires one ‘big hit’ -- akin Success in patent licensing requires one ‘big hit’ -- akin to winning the jackpot at Las Vegasto winning the jackpot at Las Vegas

One big hit makes the licensing portolio profitable – this One big hit makes the licensing portolio profitable – this drives tech transfer offices to focus on the potential home drives tech transfer offices to focus on the potential home runrun

Must identify the one potential big hit from a sea of Must identify the one potential big hit from a sea of possible invention disclosurespossible invention disclosures

Picking Winners -- how good are we?Picking Winners -- how good are we?

John SimpsonJohn Simpson

Julio Palmaz Julio Palmaz

Paul BottomleyPaul Bottomley

Cardiac Surgery as a model Cardiac Surgery as a model for innovationfor innovation

Development of Valve Development of Valve Replacement SurgeryReplacement Surgery

Dr. Charles P. Bailey – First successful mitral valve Dr. Charles P. Bailey – First successful mitral valve commissurotomy, June 10, 1949 -commissurotomy, June 10, 1949 -no companyno company

Dr. C. Walton Lillehei – VSD closure using cross-Dr. C. Walton Lillehei – VSD closure using cross-circulation (1954) -circulation (1954) -MedtronicMedtronic

Dr. Richard DeWall – Heart Lung Machine using Bubble Dr. Richard DeWall – Heart Lung Machine using Bubble Oxygenator (1955) -Oxygenator (1955) -Bentley LabsBentley Labs

Dr. Albert Starr – First successful mitral valve Dr. Albert Starr – First successful mitral valve replacement with Starr-Edwards ball-valve prosthesis, replacement with Starr-Edwards ball-valve prosthesis, August 25, 1960. -August 25, 1960. -Edwards LaboratoriesEdwards Laboratories

Cardiac Surgery as a model Cardiac Surgery as a model for innovationfor innovation: : Many Companies Many Companies

SpawnedSpawned Edwards LaboratoriesEdwards Laboratories Shiley LaboratoriesShiley Laboratories

Bentley Laboratories Pacesetter (Siemens)Bentley Laboratories Pacesetter (Siemens)

Medtronic Medtronic Hancock Labs Hancock Labs

Advanced Cardiovascular Systems (Guidant)Advanced Cardiovascular Systems (Guidant)

Boston ScientificBoston Scientific Cordis (J&J)Cordis (J&J)

St. Jude Medical St. Jude Medical VentritexVentritex

So you want to start a So you want to start a company?company?

1.1. IdeaIdea

2.2. Intellectual property Intellectual property

3.3. Investment CapitalInvestment Capital

4.4. Management TeamManagement Team

5.5. Define your personal objectivesDefine your personal objectives

1.1. Make money?Make money?

2.2. Get your idea into clinical practiceGet your idea into clinical practice

3.3. Win a Nobel PrizeWin a Nobel Prize

4.4. Stay at the university & get tenureStay at the university & get tenure

5.5. Move into the commercial sectorMove into the commercial sector

How to Avoid Making MistakesHow to Avoid Making Mistakes

Recipe for SuccessRecipe for SuccessMedical StartupsMedical Startups

Top 10 ListTop 10 List1.1. 510 K rather than PMA510 K rather than PMA

2.2. Recurring revenue stream Recurring revenue stream

3.3. Significant barrier to entrySignificant barrier to entry

4.4. Low development costLow development cost

5.5. Cost effective/less invasive/safer/better = must Cost effective/less invasive/safer/better = must be clearly evidentbe clearly evident

Recipe for SuccessRecipe for SuccessMedical StartupsMedical Startups

Top 10 ListTop 10 List6.6. New or rapidly emerging market with no New or rapidly emerging market with no

dominant competitordominant competitor

7.7. Avoid Inventor’s ParanoiaAvoid Inventor’s Paranoia

8.8. Don’t serve two masters (conflict of Don’t serve two masters (conflict of commitment)commitment)

9.9. Minimize Conflict of InterestMinimize Conflict of Interest

10.10. Be LuckyBe Lucky

Louis Pasteur:Louis Pasteur:

““Chance favors the prepared mind.”Chance favors the prepared mind.”

Advice to the entrepreneur:Advice to the entrepreneur:

When you have become successful, When you have become successful, give generously back to your universitygive generously back to your university

(and if you didn’t go to a university in (and if you didn’t go to a university in the United States, please donate to the United States, please donate to

Johns Hopkins University)Johns Hopkins University)

The EndThe End

ReferencesReferences

On the TakeOn the Take, Jerome P. Kassirer, M.D. (2005, Oxford , Jerome P. Kassirer, M.D. (2005, Oxford University Press)University Press)

Universities in the MarketplaceUniversities in the Marketplace, Derek Bok (2003, , Derek Bok (2003, Princeton University Press)Princeton University Press)

Los Angeles Times:Los Angeles Times: articles on conflict of interest articles on conflict of interest among NIH senior scientists by David Willman, among NIH senior scientists by David Willman, December 7, 2003 and December 22, 2004 December 7, 2003 and December 22, 2004

COI Dilemma (as stated by COI Dilemma (as stated by Kassirer)Kassirer)

““Where does the line exist between advancing Where does the line exist between advancing the cause of science and the betterment of the cause of science and the betterment of patient care on the one hand, and the pecuniary patient care on the one hand, and the pecuniary interests of the physicians collaborating with interests of the physicians collaborating with industry to produce these advances on the industry to produce these advances on the other?”other?”

““I cannot be bought”I cannot be bought”

““Thre is little doubt that substantial sums of Thre is little doubt that substantial sums of money induce physicians to drift across the line, money induce physicians to drift across the line, and as they do, financial conflicts of interest can and as they do, financial conflicts of interest can cause great damage.” – J.P. Kassirercause great damage.” – J.P. Kassirer

Effects of Funding Source Effects of Funding Source on Study Outcome on Study Outcome

Study on thromboembolic complications of 3Study on thromboembolic complications of 3 rdrd generation contraceptive agents by Richard generation contraceptive agents by Richard Smith in British Medical JournalSmith in British Medical Journal Funded by public money (e.g., NIH): showed Funded by public money (e.g., NIH): showed

thromboembolic complications occurred with thromboembolic complications occurred with 33rdrd generation contraceptive agents generation contraceptive agents

Funded by pharma: No complications Funded by pharma: No complications recordedrecorded

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