R E SUL T SR E S E A R C H A N D G R A D U A T E S T U D I E S A T N O R T H C A R O L I N A S T A T E U N I V E R S I T Y

Volume IV, Number 1

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NC STATE UNIVERSITY

With offspring ranging from semiconductor maker Cree,Inc., and poultry vaccine producer Embrex, Inc., to aslew of two- to four-person start-ups, NC State hasbecome a national leader in technology transfer and commercialization in the past two decades.

In fiscal 2003, for example, NC State reached all-timehighs in the number of applications for patents (170)and patents granted (58). The figures are triple anddouble, respectively, the numbers just five years ago.During that five-year span, the University collectedmore than $21 million in royalties from technologylicensed to outside companies—money that is shared with inventors andinvested in new intellectualproperty.

Those activities led MITTechnology Review to rankthe University 12th in itsmost recent national survey of technology transferstrength, which combines the number of patents issuedfor university research with a measure of how relevantthe discoveries are to other scientists. This year’s rankingis a long way from the No. 22 ranking the Universityheld in 1997. “This also represents a strong stimulus forapplied research with industry,” Vice Chancellor forResearch and Graduate Studies Dr. John Gilligan says.

In all, more than 50 companies have been spun out of NC State since 1980, now employing almost 1,800

TECH TRANSFER “SUPER MODEL” ATTRACTS ATTENTIONpeople in fields like textiles, pharmaceuticals and environmental engineering. Those figures don’t eveninclude SAS Institute, the world’s largest privately heldsoftware company, which emerged from NC State’sStatistics Department before the current age of technologytransfer was born.

Dr. Donna Cookmeyer, director of NCState’s Office of Technology Transfer(OTT), says the “entrepreneurial portal” created by the University

encourages faculty innovation and nurturesbusiness start-ups. “All the infrastructure is here—the administrative support from the chancelloron down—to say that, ifyou want to commercializeyour research, we’ll helpyou do it,” she says.

The portal includes OTT, which finds commercial outletsfor faculty inventions; the College of Management’s HiTEC program, which helps develop viable businessesaround intellectual property; the Technology Incubator on Centennial Campus, which provides convenient offices and labs to fledgling companies; and the AcademyCentennial Fund, which invests venture capital in promising start-ups.

This issue features the various aspects of NC State’ssuperior tech transfer model and some success stories it has produced. ■

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Chancellor Marye Anne Fox has been a strong proponent of technologytransfer since arriving at NC State. RESULTS asked her to comment on the role commercializing research innovations plays at the University.

R: How does the commercialization of intellectual property benefit NC State students and faculty and thepeople of North Carolina?

Chancellor: There are many direct benefits to the Universitycommunity, including faculty sharing in the revenue derivedfrom the commercialization, students experiencing the intellectual challenge of bringing basic discoveries to a profitableproduct, and the entire community benefiting from new funding opportunities for research. A benefit to the public followsbecause technology transfer has a direct impact on economicdevelopment. Technology transfer creates new products, newcompanies, and new jobs. Every time a new product is successfulcommercially—even in established companies—career opportunities are created.

There are also intangible benefits to commercialization, suchas a higher visibility for NC State accomplishments. For example, our students may be targeted for employment by ourindustry collaborators, or our faculty may develop new interestsin partnerships, leading to consulting opportunities or newresearch directions.

R: How does NC State’s research mission benefit from technology transfer and vice versa?

Chancellor: Successful technology transfer encourages ourindustry collaborators to sponsor new research projects on campus to further develop the innovations generated by ourfaculty, staff, and students. Technology transfer at NC State ismuch easier than at many of our peer institutions because ofour long-standing involvement with industry, developed as adirect consequence of our Land Grant mission. We have closeworking relationships with hundreds of companies and, together,we have conducted nationally recognized research efforts in manyfields. In fiscal 2003, we ranked seventh among U.S. universitiesin industry-sponsored research, at more than $37 million.

R: Why does NC State work so hard to commercialize its intellectual property?

Chancellor: The Bayh-Dole Act of 1980 allowed universities,for the first time, to own the intellectual property they developedwith the sponsorship of federal grants. Prior to that, the government owned these inventions, and commercializationwas attempted only infrequently—about 5 percent of them. In contrast, when universities own their inventions, they haveclear incentives to protect key intellectual property and to collaborate with industry to commercialize the technology.Beyond that, our mission as a Land Grant institution dictatesthat we strive to benefit the people of North Carolina throughour research. Commercialization helps achieve that goal.

R: Why is NC State so well-suited for technology transferand successful in commercializing intellectual property?

Chancellor: Much of the research on campus emanates fromcolleges that work not only on basic research but also on itspractical consequences. Our extension efforts also focus onmaking inventions developed at the University available to the general public. Along with our well-developed researchenterprise, these efforts perfectly position NC State to succeed at technology transfer more frequently than mostresearch-extensive universities.

R: Does the University’s educational mission suffer in anyway from the focus on technology commercialization?

Chancellor: Research and the commercialization of new technology are key synergies of our educational mission, notcompetitors. Students learn both in the classroom and in thelaboratory—theory and application—and these activities complement each other. In fact, our most effective technologytransfer is accomplished at graduation each year when we sendwell-trained graduates into the workforce. This is why theOffice of Technology Transfer is such an important activity ofthe Office of Research and Graduate Studies.

R: How do you see the model for technology transfer that NCState has developed in recent years evolving in the future?

Chancellor: As more license revenue and equity in spin-offcompanies are generated, the University can reinvest morebroadly in applied research and entrepreneurial activities inthe colleges. As a result, we’ve seen greater interest in investment by venture capital companies that highly prize the early-stage discoveries based on NC State technology. ■

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“TECHNOLOGY TRANSFER CREATES NEW

PRODUCTS, NEW COMPANIES, AND NEW JOBS.”

“OUR MOST EFFECTIVE TECHNOLOGY TRANSFER

IS ACCOMPLISHED AT GRADUATION EACH YEAR

WHEN WE SEND WELL-TRAINED GRADUATES

INTO THE WORKFORCE.”

CHANCELLOR: TECHTRANSFER A WIN-WINFOR STATE, NC STATE

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ARRAYXPRESS ONTHE RIGHT TRACKThe latest example of the success of NC State’s technology transfer model,ArrayXpress, Inc., is taking research intended to improve the loblolly pine’s paperproducing potential and using it to help develop future generations of drugs,healthier animals, and bioterrorism defense.

Dr. Len van Zyl, a research assistant professor in the College of NaturalResources, was using microarrays to screen gene sets for a National ScienceFoundation project to assist in the production of faster-growing pines that requireless chemical processing to manufacture paper. Microarrays, chip-like devicesthat contain hundreds or thousands of genes, are commonly used to target genesof interest. During his experiments, van Zyl gradually developed his own systemthat optimized the protocol for conducting such experiments.

When other researchers and companies began asking if they could use his system, van Zyl asked the Office of Technology Transfer whether he could provide his technology to them. “I didn’t worry about competition; I just wantedto produce good data,” says van Zyl, a researcher so purely motivated by sciencethat he is also trying to genetically resurrect the mountain kwagga, a zebra-likeanimal from his native South Africa that has been hunted into extinction.

Tech transfer officials quickly nixed the notion of a giveaway and put van Zyl intouch with the HiTEC program in the College of Management, which askedentrepreneur-in-residence Michael Zapata to see whether a market opportunityexisted to build a company around the microarray system. Zapata assembled amanagement team by tapping his business contacts and NC State alumni like

John Woodall, who leftDeloitte & Touche tobecome chief financialofficer. They wrote abusiness plan for theoperation, licensed vanZyl’s technology from the University,rented lab space in theTechnology Incubatoron Centennial Campus,and began lining upcustomers for the company, which theydubbed ArrayXpress.

“It’s a tremendousbenefit to me as aresearcher to have suchbusiness assistance so

I don’t have to worry about that side of things,” van Zyl says. Being in the incubator is not only convenient—it’s just upstairs from his faculty office—it also gives the company the chance to collaborate with other researchers.

Now that ArrayXpress has proven its business model by landing several large customers, executives have their sights set on raising money that would allow thecompany to break into new markets, from drug discovery to plant and animalbreeding to biodefense. Any technology developed through microarray screeningservices could be marketed by ArrayXpress later as a stand-alone product, such as test kits to pinpoint the source of cancers for faster treatment, Zapata says. “If NC State didn’t have an entrepreneur-oriented administration, this company would have been dead before it started,” he says. “Administrativeencouragement to try something new is key.” ■

A microarray allows scientists to conduct simultaneous experimentson thousands of genes. ●

Pinus taeda L. (Loblolly pine) ●

“IF NC STATE DIDN’T HAVE

AN ENTREPRENEUR-ORIENTED

ADMINISTRATION, THIS COMPANY

WOULD HAVE BEEN DEAD BEFORE

IT STARTED. ADMINISTRATIVE

ENCOURAGEMENT TO TRY

SOMETHING NEW IS KEY.”

Dr. Len van Zyl inserts slides containing gene probes into a microarray spotter in the ArrayXpress lab. ●

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For NC State inventors, the Office of Technology Transfer (OTT) is amajor crossroads on the road from innovation to commercialization. Using a mix of technical analysis, marketing, and negotiating skill, OTT DirectorDr. Donna Cookmeyer and her staff translate research discoveries intoproducts and services that generate money and prestige for theUniversity—and create jobs and economic investment for North Carolina.

The scores of inventions by faculty, staff, and students—more than 200were disclosed in 2002-03 alone—must first be reviewed to determine howeach stacks up in terms of scientific merit and commercial potential. OTT’sfive case managers draw on their backgrounds in business, engineering, andscience and work with the faculty members on the University’s IntellectualProperty Committee to determine which ideas may be ready for primetime. “With the complexity of new inventions and all of the business issuesto be addressed, tech transfer has changed in recent years from being handled primarily by attorneys to being taken care of by people with a good degree of technical or business expertise,” Cookmeyer says.

Cookmeyer herself fits that description, having earned adegree in chemistry from MIT and a Ph.D. in geneticsfrom Penn before coming to NC State to do post-doctoralresearch in plant virology. She then spent five years at theDefense Department overseeing university research programs. “It gave me a chance to see new science andinfluence policy,” she says. Those opportunities have continued at NC State, where she has led the technologytransfer effort for much of the past three years.

With missionary zeal and a voluble personality,Cookmeyer educates the NC State community about theopportunities presented by technology transfer throughseminars, guest lectures in courses, and management strategy discussions. She and her staff not only work withattorneys to get patents filed, they also act as marketingconsultants and promoters, identifying companies thatcould benefit from new technology and pitching licensingopportunities to them. “Our goal in OTT is to do more,”she says, “to engage more faculty and more departments,to create more opportunities for the innovative people atNC State to make a difference.”

OTT STAFF CONSULT ON CREATING

SPIN-OFF COMPANIES, RECRUIT

EXPERIENCED EXECUTIVES, AND

EVEN MEET WITH INVESTORS WHO

CAN HELP START-UPS GET

OFF THE GROUND.

Dr. Chris Daubert stirs his whey protein thickener into a liquid solution. ●

“OUR GOAL IN OTT IS TO DO MORE—TO ENGAGE MORE

FACULTY AND MORE DEPARTMENTS, TO CREATE MORE

OPPORTUNITIES FOR THE INNOVATIVE PEOPLE AT NC STATE

TO MAKE A DIFFERENCE.”

TRAFFICKING ON

THE INNOVATION

SUPERHIGHWAY

For Dr. Chris Daubert, an assistant professor of food science and engineering in the College of Agriculture and Life Sciences,Cookmeyer’s staff found a major food manufacturer to license his wheyprotein thickener. Daubert began developing the thickener seven yearsago to help patients with swallowing disorders. The starches and gumstraditionally used to thicken foods are hard to control and have littlenutritional value, he says. So he began manipulating the protein structures within whey, a dairy byproduct that usually is discarded, byheating and adding food-grade acids. “This is an alternative to starchwhen you want more natural ingredients or extra proteins in products likebaby food, yogurt, or nutritional drinks,” he says.

For entrepreneurial faculty members who want to retain more controlover the commercialization of their inventions, OTT staff consult on creating spin-off companies, recruit experienced executives, and evenmeet with investors who can help the start-ups get off the ground.

To launch BioMarck Pharmaceuticals Ltd., OTT staff linked alumnilooking for investment opportunities with Drs. Ken Adler and LindaMartin, who discovered a peptide that could lead to drugs for respiratoryailments like asthma and chronic bronchitis. In trying to learn moreabout the MARCKS protein, the two College of Veterinary Medicinecell biologists not only found that it plays a pivotal role in controllingmucous secretion into the airway, they also unexpectedly discovered oneof their test reagents actually blocks the protein and stops secretions.

Adler and Martin chose to form BioMarck so development of their peptidewouldn’t get lost in a major pharmaceutical company’s research division.Meanwhile, they continue studying MARCKS and how their peptide works.

“We’re giving it the greatest chance to lead to useful technology,” Martin says.

Creating useful and beneficial technology iswhat OTT strives for, Cookmeyer says, notingthat the office monitors licensees and spin-offsto make sure they continue to advance theproducts. “Tech transfer is driven by the hopeof making a difference,” she says. “Very fewinventions will make a lot of money, but many,in their own way, in the right hands, will makethings better.” ■

Dr. Donna Cookmeyer helps faculty navigate the winding road of commercializing research. ●

Drs. Ken Adler and Linda Martin of BioMarck Pharmaceuticalswork with Dr. Shuji Takashi to modify the peptide they created

so it can eventually be given to humans. ●

“VERY FEW INVENTIONS WILL MAKE A LOT OF

MONEY, BUT MANY, IN THEIR OWN WAY, IN THE

RIGHT HANDS, WILL MAKE THINGS BETTER.”

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To those in business who believe successful entrepreneurs areborn rather than made, Drs. Angus Kingon and Steve Markhampolitely point to some facts. Students from the College ofManagement’s HiTEC program have commercialized more than a dozen technologies over the past decade, creating 300 jobs and raising $120 million in venture capital. “We give students aroadmap to go from technology to viable business start-up,” saysKingon, a professor of materials science and engineering who co-founded the program with management professor Markham.

Initially called Technology Education and Commercialization, orTEC, the program is among a growing number of efforts at NCState to teach entrepreneurship. They include a twist on therequired senior design project in the College of Engineering and a new sequence of courses within the business management minorin the College of Management. “The majority of our students arenot going to be entrepreneurs, but most will eventually be in a corporate setting where the skills they learn here will come intoplay,” HiTEC Director Roger Debo says.

Noting most similar courses are taught using case studies, Kingonand Markham have created a comprehensive methodology toteach the process of starting a technology-based business, with afocus on finding a product within the technology to best meetmarket needs. “Part of the problem in commercializing technologyis that, if you put it in a product that doesn’t work, a good technology gets tossed out with the product,” says Debo.

HiTEC taps NC State’s Office of Technology Transfer (OTT) aswell as research labs at places like IBM, Becton Dickinson, andthe EPA for intellectual property students can use to build companies. Working in teams, students research markets, talkwith potential customers, and draw up business plans for theirfirms. Some class projects later make the jump from hypotheticalto reality, such as medical diagnostics firm LipoScience and voice-to-animation software developer LIPSinc, both based ontechnology licensed from NC State.

Because HiTEC has been tied so closely to the student calendar,technologies organizers learned about after the start of fall semestercouldn’t be studied. So an independent nonprofit, NC-TEC, hasbeen formed to look at the commercial potential of other Universityinnovations, which Debo hopes will make the program a greaterresource for OTT. Gene screening firm ArrayXpress is the firstcompany developed through NC-TEC, and others are in thepipeline. “We want to nurture start-ups,” he says, “and we wantfaculty to feel good about the process when they’re done.” ■

“WE GIVE STUDENTS A ROADMAP TO GO FROM

TECHNOLOGY TO VIABLE BUSINESS START-UP.”

Executives-in-Residence Victoria Richardson and Ervin Allen (top) discussproblems in starting a technology-based business and help students in the

HiTEC class (bottom) develop solutions.●

“PART OF THE PROBLEM IN COMMERCIALIZING

TECHNOLOGY IS THAT, IF YOU PUT IT IN A PRODUCT

THAT DOESN’T WORK, A GOOD TECHNOLOGY GETS

TOSSED OUT WITH THE PRODUCT.”

CREATING

ENTREPRENEURS,BUILDING COMPANIES

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A decade ago, Dr. Jim Otvos hadan idea in search of a corporatevehicle. At the same time, theCollege of Management’s newTechnology Education andCommercialization (TEC) program was looking for businessideas to validate its concept ofteaching students how to start a company.

Today, LipoScience, Inc., thecompany built around Otvos’ technology, performs about $30 million annually in comprehensiveheart disease risk screenings at its sprawling Raleigh offices, whereit employs about 140 people—and serves as the paragon for theTEC program. “There was little interest in commercializing myresearch before that, and I had zero business background so Icouldn’t do it myself,” Otvos says. “They did a good job of holdingmy hand through the start-up process.”

A biochemistry professor who studied proteins by using nuclearmagnetic resonance (NMR) spectroscopy, he began tinkering inmedical diagnostics in the mid-1980s after a scientific report suggested—incorrectly—that NMR could be used to predictcancer. “It was totally out of scientific curiosity that I started to fiddle with blood samples,” he says.

Otvos found that different levels of cholesterol-carrying lipoproteinsin blood produce distinct NMR “signatures,” and through continuedresearch, he discovered a better way to test for lipoprotein risk factors. The HDL and LDL cholesterol numbers—often referredto as good and bad cholesterol—doctors have traditionally used to measure heart disease risk aren’t as accurate as counting thenumber of lipoprotein particles, he says, since some particles contain less cholesterol than others. “It is the particles invadingthe artery walls that cause atherosclerosis,” he says, “so the risk ofheart disease is actually proportional to the number of particles inyour system, not the cholesterol level.”

But no one initially thought the technology had commercial potential, believing clinical labs didn’t have the trained personnelto run NMR machines and that cheaper cholesterol screeningmethods would prevail. After one of their inaugural classes performed market research for Otvos’ concept, TEC officials wrote a preliminary business plan for a company and Otvos made

Dr. Jim Otvos pioneered an improved test to measure heart disease risk. ●

THE HDL AND LDL CHOLESTEROL NUMBERS DOCTORSHAVE TRADITIONALLY USED TO MEASURE HEART DISEASE RISK

AREN’T AS ACCURATE AS COUNTING THE NUMBER OFLIPOPROTEIN PARTICLES.

a leap of faith, licensing his technology from theUniversity and attracting some start-up money.

LipoScience began in 1994 by using its NMRtest in clinical trials of cholesterol-lowering drugs,but five years ago, it expanded into patient testing as more doctors began looking for analternative to traditional screening methods.Patient services now account for about 90 percent of the company’s revenue, and severalFedEx trucks pull up to the company’s officesdaily to deliver thousands of blood samples for testing.

Otvos has since left NC State to become thechief scientific officer of LipoScience and now spends his time overseeing medical studies to further document the clinical value of the NMRtechnology. He hopes to convince more doctors and insurance companies to make the advanced test the new standard of care. Ever the teacher, he admits, “Our future depends on our success ineducating physicians.” ■

“IT WAS TOTALLY OUT OF SCIENTIFIC

CURIOSITY THAT I STARTED TO FIDDLE

WITH BLOOD SAMPLES.”

LIPOSCIENCE FINDSSUCCESS IN NUMBERS

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Walt Chappas’ office in the NC State Technology Incubatoris barely large enough to fit his desk and a couple of tablesof test equipment. But he wouldn’t want his start-up company, Allasso Industries, Inc., anyplace else right now.

Built on technologies developed by College of Textiles professor Dr. Benham Pourdeyhimi, Allasso produces imaging equipment to analyze the quality of nonwoven fabrics. It has been based in the incubator since gettingstarted nearly two years ago. “There couldn’t be a betterplace to commercialize these technologies than right hereon campus, just a block away from Dr. Pourdeyhimi’soffice,” Chappas says. “This is a slick little deal.”

Originally managed by the North Carolina TechnologicalDevelopment Authority in smaller facilities on CentennialCampus, the 18,000-square-foot incubator is now managedby NC State’s Industrial Extension Service (IES), whichtraditionally helps larger manufacturers improve their operations. “In addition to our traditional role, it’s a logicalextension of our mission to assist small companies that create jobs,” says Gene Fornaro, IES director of business development.

Twenty-one companies are now housed in the incubator,which includes 46 offices in Venture Center II and 10 labsin Partners Building II. Sixteen previous tenants havegrown enough to “graduate” into larger spaces off campus.The facility provides small offices and labs with flexibleleases to accommodate the growth that often comes in fitsand starts for fledgling companies. Tenants also shareadministrative resources—a receptionist, conference rooms,copy machines, and kitchen.

Open since 1999, the incubator plays a critical role inrecruiting corporate partners to campus and in the networkof business and academic relationships that exist there,Centennial Campus officials say. In addition to providing anoutlet for start-ups, it gives larger firms a chance to checkout emerging technologies.

Potential customers often pop into Allasso’s office, for example, after meeting with College of Textilesfaculty or visiting the Nonwoven CooperativeResearch Center that Pourdeyhimi heads. “We get in front of more people here than if we were out byourselves somewhere,” Chappas says.

While the incubator’s lab space remains almost full,the slow economy has dampened demand for officespace, now only half full as start-ups choose to remainin their “garage phase” longer to save money, Fornarosays. That creates a challenge for IES to cover theexpense of running the facility, so officials are investigating opportunities for financial support forthe incubator until demand for space from NC Statespin-offs and affiliated companies picks up again.“Like our tenants, we’re new to this business and aregoing through some growing pains,” he says. “But,just like them, we expect to be successful.” ■

“THERE COULDN’T BE A BETTER PLACE TO

COMMERCIALIZE THESE TECHNOLOGIES THAN

RIGHT HERE ON CAMPUS. …WE GET IN

FRONT OF MORE PEOPLE HERE THAN IF WE

WERE OUT BY OURSELVES SOMEWHERE.”

INCUBATORGROWS WITHIES GUIDANCE

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The incubator is a “slick little deal” for Walt Chappas, left, andWalt Chappas Jr. of Allasso Industries. ●

company abandoned its initial thrust into semiconductors forcellular phone towers in favor of the power MOSFETs—evenchanging its name from Silicon Wireless to SiliconSemiconductor and dropping its headcount from a high of 40to 25—after the telecommunications market slowed faster thanthe overall economy.

SSC’s power chips are now being designed into some productsand are undergoing quality control tests for others, from laptops to network servers to automotive electronics. Baligareports that the company attracted a lot of attention at lastfall’s Intel Developers Forum, where it was the only privatecompany invited to make a presentation. After pulling in just$2 million last year, SSC already is halfway to its goal of $17million in revenue for 2004 andis set to start hiring designersagain. “This is a challengingbut fairly lucrative market,”Baliga says, “and we intendto make SiliconSemiconductor a leading player.” ■

The insatiable consumer appetite for laptop computersthat can handle more programs faster is feeding thegrowth of NC State spin-off Silicon SemiconductorCorporation (SSC), which is poised for what executivescall “a breakout year” in 2004, just two years after graduating from the NC State Technology Incubator.

SSC makes semiconductors that solve power deliveryproblems created by the multiple-gigahertz frequenciesat which computers now routinely operate. Not only dothe microprocessors require more power, but sectionswithin them need to be switched on and off rapidly asusers move from one task to the next, says SSC founderB. Jayant “Jay” Baliga. “Consumers want that powertransition to be instantaneous, and computers cannotafford to generate more heat while doing so,” says Baliga,a Distinguished University Professor of ElectricalEngineering and director of the Power SemiconductorResearch Center at NC State.

Baliga is a soft-spoken man with more than 100 patentsto his credit and a heroic reputation in the semiconductorindustry. He has developed a MOSFET (metal-oxidesemiconductor field-effect transistor) technology thatoccupies less space on a circuit board and switches powertwo to three times as efficiently as existing products builtby industry giants like Fairchild, Hitachi and Philips.The devices also can be made with basic semiconductorfabrication techniques and utilize standard packaging. “A lot of times, you can pull off high performance bythrowing a lot of expensive technology behind it, but wewent the simple route to reduce manufacturing cost anddevelopment time,” Baliga says.

Much of the development work in SSC’s semiconductorswas accomplished on Centennial Campus, where thecompany spent its first two years in the TechnologyIncubator. Baliga says being on campus allowed him tojuggle his classroom and corporate duties, and ChiefExecutive Glenn Kline says the incubator’s flexible leaseterms let SSC stage its growth. That was crucial when the

SILICON

SEMICONDUCTOR

POWERS UP

“YOU CAN PULL OFF HIGH PERFORMANCE BY

THROWING A LOT OF EXPENSIVE TECHNOLOGY

BEHIND IT, BUT WE WENT THE SIMPLE ROUTE

TO REDUCE MANUFACTURING COST AND

DEVELOPMENT TIME.”

Power MOSFETs (above) designed by Dr. B. Jayant “Jay” Baliga (below) help computers operate at higher speeds. ●

AFTER PULLING IN JUST $2 MILLION

LAST YEAR, SSC IS ALREADY HALFWAY

TO ITS GOAL OF $17 MILLION IN

REVENUE FOR 2004.

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Although much of the work done by NC State’s Office of TechnologyTransfer (OTT) involves high-tech gizmos like semiconductors, software, and genomics tools, lower-tech efforts in educational training and publishing are also important parts of the University’s technology mix.

Dr. Alan Reiman, for example, loves teaching teachers, helping themimprove their skills as educators. But he had some learning to do himself when it came to publishing a set of teacher training materials.

With school districts around North Carolina having trouble attractingenough new teachers and dealing with classroom burnout, Reiman and his colleagues in the College of Education developed the SUCCEED curriculum to support beginning teachers and experiencededucators who mentor younger faculty. About four years ago, they decided to translate the printed materials to a multimedia format, putting lessons and demonstrations on CDs and videos for wider distribution. “We needed to build capacity for school systems to domore of this training on their own,” he says.

But the move created new issues to be addressed. Materials needed tobe copyrighted. End-user license agreements needed to be included inthe CDs. And a distributor needed to be lined up to accept and fillorders. “We were clueless, absolutely clueless as to everything that wasinvolved,” Reiman says with a grin.

Fortunately, OTT wasn’t. The office has established a CopyrightCommittee of faculty, staff, and students, similar to the long-standingIntellectual Property Committee, to review issues of ownership and thecommercial potential of publishable materials like SUCCEED.

Another low-tech but high-touch publication, aEuropean history textbook written a decade ago bylate political science professor Joe Mastro, still ranksamong the biggest commercial successes for NC State.Following the breakup of the Soviet Union, Mastroquickly put together a sixth-grade textbook for NorthCarolina schools, Living in Europe and Eurasia, toreflect the new political landscape. North Carolinalawmakers then appropriated money for NC State todevelop new history textbooks for the fourth throughseventh grades. The books grossed $13 million,according to Jim Clark, director of humanities extension for the College of Humanities and Social Sciences.

Education is a critical element of NC State’s researchmission, OTT Director Dr. Donna Cookmeyer says.“Our goal is to raise the visibility of the research and teaching at NC State,” she says, “so that moreinventions, including books and ideas, are made available to those who need them.” ■

A EUROPEAN HISTORY TEXTBOOK WRITTEN A DECADE

AGO BY LATE POLITICAL SCIENCE PROFESSOR

JOE MASTRO RANKS AMONG THE BIGGEST

COMMERCIAL SUCCESSES FOR NC STATE.

LOW TECH, HIGH TOUCH:NC STATE’S COPYRIGHTED

EDUCATIONAL MATERIALS

HELP K-12 STUDENTS

LOWER-TECH EFFORTS IN EDUCATIONAL TRAINING

AND PUBLISHING ARE ALSO IMPORTANT PARTS OF

NC STATE’S TECHNOLOGY MIX.

Dr. Alan Reiman got a peek at technology transfer with his SUCCEED teacher training materials (upper left). A series of

history textbooks published in the mid-1990s (above) rank among NC State’s most lucrative products to date. ●

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Biolex, Inc., was little more than a patenton a collection of proteins from Dr. Anne-Marie Stomp’s forest genetics lab whenCentennial Venture Partners made the NCState spin-off its first investment inOctober 1998. Generating proteins from afast-growing aquatic plant known as duckweed, the Pittsboro-based companynow employs about three dozen peopleand has signed agreements with drug companies like Bayer to incorporate theproteins into new medicines for blocked

arteries, rheumatoid arthritis, and other ailments.

Early financial supportfrom Centennial VenturePartners—now known asthe Academy CentennialFund–—has been criticalto the success of NCState’s technology transfermodel in spurring thegrowth of University spin-offs like Biolex. “It’shard to form a company

and get it off the ground without initial seed funding,” says Glenn Kline, Academy managing partner. “NC State has excellent intellectualproperty, but the pre-seed stage is generally viewed as too early for mostventure capital firms to invest in spin-offs.”

Rather than allow the technology produced in its labs to sit dormant forlack of early-stage capital, NC State officials took the bold step of creatingthe $10 million venture fund six years ago—a time when only one otheruniversity had a venture fund dedicated to providing seed money to university start-up companies. “NC State showed a lot of initiative to recognize the possibilities here,” Kline says. “A venture capital fund likethis stimulates entrepreneurship, supports additional sponsored research,and provides an arena for NC State graduates to participate in the growthof the fund’s portfolio companies.”

The Academy Centennial Fund has invested in 15 companies that wereeither based on NC State technology, working with University researchers,

or formed by alumni. The companies showedenough promise to attract another $146 million from other venture firms and privateinvestors, which Kline says is an importantgoal of the fund. “We wanted to reinforcethat NC State not only has strong technologyfor investment but also is a great place to dobusiness,” he says.

About half of the young companies the fundbacked haven’t survived—a typical rate forhigh-risk venture investing—but Kline sayspotential stars in the portfolio, such as Biolexand semiconductor makers Nitronex and SiliconSemiconductor, could generate significantreturns for NC State as they mature.

Until those returns are in the bank, University officials don’t plan on a secondventure fund to support research now in the lab. Treasurer Kathryn Hart says theendowment fund and foundations affiliatedwith NC State’s various colleges that put upthe $10 million may allocate more money toanother University venture fund when theysee good returns on the first fund.“Enthusiasm for the idea remains strong,”Hart says, “but it’s too early to know if thereturns will meet the expectations.” ■

VENTURE FUNDBULLISH ONSTART-UPINVESTMENTS

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“NC STATE HAS EXCELLENT INTELLECTUAL PROPERTY, BUT THE PRE-SEED STAGE IS GENERALLY VIEWED AS

TOO EARLY FOR MOST VENTURE CAPITAL FIRMS TO

INVEST IN SPIN-OFFS.”

Dr. Anne-Marie Stomp uses duckweed, a fast-growing aquatic plant, to produce proteins. ●

Photo: Chris Kelly

“A VENTURE CAPITAL FUND LIKE THIS

STIMULATES ENTREPRENEURSHIP, SUPPORTS ADDITIONAL SPONSORED

RESEARCH, AND PROVIDES AN ARENA

FOR NC STATE GRADUATES TO

PARTICIPATE IN THE GROWTH

OF THE FUND’S PORTFOLIO COMPANIES.”

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Results: Research and Graduate Studies at North Carolina State University is published twice yearlyby the Office of the Vice Chancellor for Research and Graduate Studies. Text may be reprinted

provided credit is given. Photographs and artwork may not be reprinted without written permissionfrom the editor. Comments and queries should be addressed to Editor, Results, NCSU Box 7268,

Raleigh, NC 27695-7268. Phone: 919/424-4433, e-mail: jaine_place@ncsu.edu.

w w w. n c s u . e d u / r e s e a r c h / r e s u l t s

R E SUL T SR E S E A R C H

A N D G R A D U A T E

S T U D I E S A T N C S U

CHANCELLOR

Marye Anne Fox

PROVOST AND EXECUTIVE VICE CHANCELLOR

James L. Oblinger

VICE CHANCELLOR FOR RESEARCH AND

GRADUATE STUDIES

John G. Gilligan

VICE CHANCELLOR FOR FINANCE AND BUSINESS

George L. Worsley

VICE CHANCELLOR FOR ADVANCEMENT

Terry G. Wood

VICE CHANCELLOR FOR EXTENSION

AND ENGAGEMENT

Stephen B. Jones

VICE CHANCELLOR FOR STUDENT AFFAIRS

Thomas H. Stafford, Jr.

VICE CHANCELLOR AND GENERAL COUNSEL

Mary Elizabeth Kurz

AGRICULTURE AND LIFE SCIENCES

Johnny C. Wynne, Interim Dean

DESIGN

Marvin J. Malecha, Dean

EDUCATION

Kathryn M. Moore, Dean

ENGINEERING

Nino A. Masnari, Dean

NATURAL RESOURCES

Larry A. Nielsen, Dean

GRADUATE SCHOOL

Robert S. Sowell, Dean

HUMANITIES AND SOCIAL SCIENCES

Linda P. Brady, Dean

MANAGEMENT

Jon W. Bartley, Dean

PHYSICAL AND MATHEMATICAL SCIENCES

Daniel L. Solomon, Dean

TEXTILES

A. Blanton Godfrey, Dean

VETERINARY MEDICINE

Oscar J. Fletcher, Dean

EDITOR

Matthew Burns

MANAGING EDITOR

Jaine Place

ADVISORY COMMITTEE:Dr. John GilliganDr. Steven Lommel

DESIGN: NC State Creative ServicesVicky Earp Design

PHOTOGRAPHY:Roger Winstead

NC STATE UNIVERSITY

© 2004 NC State University CPrinted on recycled paper.

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Dr. Brent Smith ●

NC State has long been a leader in patenting itsown inventions. Lately, however, the Universityis attracting more interest from companieslooking to transfer technology patents that nolonger fit with corporate research needs. Thedonor companies receive tax deductions, whilethe University and its researchers get the opportunity to further develop and license the patent to produce a royalty stream.

Textiles professors Drs. Brent Smith and Harold Freeman, for example, areusing the TEEGAFIX technology donated last fall by consumer products giantProcter & Gamble Co. (P&G) to produce better, more environmentally safe textile dyes. With the technology, they are able to modify the chemicalstructures of currently used fiber-reactive dyes so more of the color bonds withfibers and less winds up in wastewater. Traditionally, dye plants have used salt to enhance the bonding of dye to fibers, but discharging salt into North Carolinarivers can create as many environmental problems as the unbound dyes. “TEEGAFIX offers another branch to the fork in the road of environmentalresearch—another direction that appears to have a lot of promise,” Smith says.

NC State began attracting donated intellectual property a few years ago and now typically receives about a half dozen gifts a year, says Ed Hand, NC State’s director of corporate and foundation relations. TEEGAFIX is the fourthtechnology P&G has donated since 2000. “We don’t go out looking for it,” Handsays, noting that companies often give patents to NC State because they alreadysponsor the research of certain professors or believe the University’s strength in fields like textiles and paper products offers the best chance to move a technology forward.

Before accepting a donation, the Office of Technology Transfer works withHand and other members of the Development Office to determine whetherthere’s any commercial potential in a technology and to find a faculty memberinterested in working with it. “We don’t want to take it on if we don’t havesomeone who can move it forward,” Hand says. “It has no commercial value to us until it is licensed by the University, although it has significant value to our research enterprise. We’re hopeful that one day we’ll see commercial success as well.” ■

COMPANIES OFTEN GIVE

PATENTS TO NC STATE BECAUSE

THEY ALREADY SPONSOR

RESEARCH OR BELIEVE THE

UNIVERSITY’S STRENGTHS OFFER

THE BEST CHANCE TO MOVE A

TECHNOLOGY FORWARD.

ADDING VALUE

TO DONATED

TECHNOLOGIES

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