The first step is recognizing there’s a problem.
The problem for the University of California, Irvine: how to do better at making medical device businesses out of research done there.
“There is definitely a lot of feeling within the university and feedback from local industry that we could be doing better, we could be doing more,” said Jacob Levin, UCI’s assistant vice chancellor for research development.
The school recently started TechPortal Orange on the campus of the UCI Medical Center in Orange in a bid to address the shortfall. It’s managed by UCI School of Medicine’s Surgical Education Center.
The goal is to link faculty members working on new medical devices with the private sector.
The school is putting some money behind its plan, at least in theory. UCI has said it will reinvest an undetermined portion of its share of any royalties from products invented by tenants of the incubator in its Office of Technology Alliances.
Oversight
The Office of Technology Alliances oversees the school’s commercialization efforts. Its budget was previously fixed by school officials, with no connection to income from royalties.
TechPortal Orange appears to be part of a shift in emphasis at UCI. Greg Washington, newly arrived dean of the Samueli School of Engineering, has wasted little time in engaging with private-sector executives about opportunities for links between the campus and local industries.
TechPortal Orange is “part of a concerted effort to support technology translation out of the university and lower barriers (to) creation of startup companies,” Levin said.
The incubator has 3,100 square feet of laboratory and office space. School officials said that’s enough room for up to 14 medical device makers that will spend up to two years there before “graduating” to a larger office space or other sites, such as sponsored research facilities on campus.
TechPortal Orange is modeled on the QB3 Garage, a medical device business incubator at the UC San Francisco medical campus. QB3 spawned True Materials Inc., a San Francisco company acquired for $25 million last year by Affymetrix Inc., a publicly traded genetic analysis company in Santa Clara.
Incentives for using TechPortal Orange include below-market rents, Levin said.
TechPortal Orange has had discussions with five or six potential tenants, Levin said.
The incubator has an 16-member oversight board with UCI faculty, administrators and representatives from venture capitalists and industry organizations such as Octane, Biocom and SoCal Bio, but no local device makers as of yet.
Maneesh Goyal, a managing director at Corona del Mar-based Miramar Venture Partners, called TechPortal Orange “a small part of the effort to ensure our continued competitiveness.”
The incubator “will help the local community ensure that the intellectual property we develop at our startups and universities stays not only in Orange County, but the country,” Goyal said.
Regulatory and reimbursement hurdles, Goyal said, are widening a funding gap between seed-stage investments in device makers and institutional venture capital investments.
“Some other entities have to step up and support research coming out of universities,” he said.
Sparse Record
UCI has a relatively sparse track record of fostering companies compared to other public and private universities in the state.
The website for the university’s Office of Technology Alliances counts about 50 companies, many of which are healthcare-related, that have grown out of the school. The University of California, San Diego, counts about 600.
The UCI list includes Glaukos Corp., an Aliso Viejo-based eye device maker; Cortex Pharmaceuticals Inc., a drug developer that started in the 1980s and remains in Irvine; and Ability Biomedical Corp., which made antibodies to fight infectious diseases and was bought in 2004 by Medarex Inc., a unit of Princeton, N.J.-based Bristol Myers Squibb Co.
The technology that grew into IntraLase Corp., an Irvine maker of eye lasers that was bought in 2007 by Santa Ana-based Advanced Medical Optics Inc. (now Abbott Medical Optics) for more than $800 million was invented by UCI professors Tibor Juhasz and Ron Kurtz prior to their arrival at the university.
Royalties on future products will be a key to TechPortal Orange’s long-term outlook, and specifics remain to be settled.
Levin said that it was “impossible to predict at this early stage” how much of a cut of royalty revenue the school would get, and it’s “likely to be several years down the road” before standards are established on revenue.
Royalty deals will depend on researchers in residence at the incubator disclosing their inventions to the Office of Technology Alliances. Any intellectual property invented or discovered while a company is in TechPortal Orange will remain with the researchers regardless of the arrangement on royalties.
Reinvesting future royalties offers the chance for the Office of Technology Alliances to get more in line with its mission, “which is to get inventions out there into the marketplace,” Levin said.
The recent moves are driven as much by the chronic budget crises of state government as anything else.
The UC system is “recognizing that (technology translation) is going to be a critical component of our future moving forward, especially with the budget situation,” Levin said.
Recruiting
TechPortal Orange could also become a recruiting tool for faculty at the medical school.
“More and more faculty (members) are entrepreneurial and have commercial end points in their sights,” he said. “My hope is having an infrastructure and resources in this regard will encourage them to come here.”
