1. The University of Pittsburgh Creating the Best Investments Carolyn Green, Director Office of Enterprise Development, Health Sciences University of Pittsburgh Schools of Health Sciences Office of Enterprise Development, Health Sciences

2. “One way to have a good idea is to have a lot of ideas, and throw the bad ones away.” ~Dr. Linus Pauling American theoretical chemist and biologist 1901-1994

3. The Evolution of Biomedical Research 1940 1950 1960 1970 1980 1990 2000 1943 – DNA is shown to be the basic genetic material 1953 – Watson and Crick identify DNAs double helix 1972 - Paul Berg makes first rDNA 1977 - First human protein (somatostatin) manufactured in bacteria 1978 - Herb Boyer uses e-coli to make recombinant human insulin 1966 – DNA’s complete genetic code deciphered 1980 – Kary Mullis invents PCR; The patent is sold in 1991 for $300M 1981 – Ohio University scientists produce first transgenic animals 1982 – Genentech markets recombinant human insulin 1986 – Chiron granted a license for recombinant hepatitis B vaccine; Genentech markets rt-PA 2000 – Pharmacogenomics produce Herceptin with accompanying diagnostic test 1990 – First gene therapy on 4 year old with ADA 1996 – Genetic maps of humans and mice complete; Avonex approved for treatment of MS 1997 – FDA approves Rituxan for non-Hodgkin’s lymphoma; Dolly is cloned in the UK 1998 – Embryonic stem cells grown for the first time; an inexpensive E. coli biosensor sold

4. “Intellectual Property Protection” becomes part of the biomedical research lexicon…

5. UNIVERSITYINDUSTRY Commercialization of New and Useful Technologies Teaching Research Service Economic Development Profits Product R&D Knowledge for Knowledge’s Sake Academic Freedom Open Discourse Management of Knowledge for Profit Confidentiality Limited Public Disclosure Conflicting Values - Common Interest

9. Overcoming barriers to success…  Cultural barriers  Legal barriers  Financial barriers  High risks associated with all embryonic technologies

10. Cultural Barriers Entrepreneurship is…. Not part of the cultural norm in academic medicine May restrict ability to publish Hampered by restrictive policies and procedures Rarely a factor in performance evaluation Considered to be a distraction from primary research and teaching focus, impedes career advancement Legal and Financial Barriers l Compliance with Bayh Dole Act, NIH guidelines, other laws l Private Inurement / Private Benefit (FMV) l Unrelated Business Income Tax (UBIT) l Tax Exempt Bond Financing restrictions l Resources to support growing patenting and business development activities

11. Embryonic technologies require a plan to reduce risk, build value l Academic discovery ≠ Commercial validation l A risk assessment should encompass three key areas l Scientific l IP l Market l Prioritization and execution of risk reduction activities -eg l Animal experimentation l Freedom to operate analysis l Application selection and competitive review l Inventor may not have skills needed to validate or enough knowledge to select most appropriate use Faculty nearly always under estimate time and effort required to overcome the commercialization hurdles that lie ahead.

12. “Genius is 1% inspiration and 99% perspiration.” ~Thomas A. Edison

13. Intellectual Property Timeline (OTM):  Invention Disclosure  Provisional Patent  Application  PCT/Intl Filing Concept Development Timeline (OED):  Viability Assessment Preliminary Research Preliminary Research Funding Assistance Application Development Licensing or Start-Up Options  Business Model Development Pitching to Investors Product Development Patent Analysis Market Analysis Competitive Analysis Opportunity Incubation Preparing for Partnership

14. Concept Development Timeline (OED): Viability Assessment Patent Analysis Market Analysis Competitive Analysis prior disclosures novelty, usefulness competing patents “freedom to operate” market size & growth problem/product definition customer demand feasibility/regulatory issues platform technology? barriers to competitors differentiation sustainable advantage One page opportunity summary; identification of OED lead

15. Concept Development Timeline (OED): Opportunity Incubation Application Development Funding Assistance Business Plan Development defined customer need proof of concept data clinical development plan with milestones that reduce risk & increase value execute plan federal state/local gov corporate HNW Individuals foundations internal sources monetization strategy product/service pricing reimbursement market entry strategy rough timeline rough financials Two page executive summary; two minute “elevator pitch”, two PowerPoint slides

16. Helping the inventor to understand what lies ahead; facilitating communication and progress toward clinical development Concept Development Timeline (OED): Preparing for Partnership Closing the DealLicensing Options finding management incubator resources scaling up the science funding role of the inventor valuation extraction of FMV projected financial needs projected exit strategy COI, COC, EOC identifying potential partners making contacts getting a face to face meeting contract facilitation role of the inventor Start up Options

17. Two Organizations – Working Together – Six nationally ranked schools of health sciences + top ranked bioengineering – Over $600M research funding – Ranked 8 th in NIH funding – Exceptional history of fostering multi-disciplinary bioengineering- clinician research teams – Developing sophisticated intramural and extramural entrepreneurial support Source: 2004 NIH Awards to Domestic Institutions of Higher Education …to create a nationally and internationally renowned center of medical excellence. University of Pittsburgh – $5.4B revenues – 19 hospitals + a network of care facilities – 40,000+ employees  (Largest employer in Commonwealth of PA) – One of the country’s fastest growing health insurance plans – Financially healthy – Recruitment growth of 10%/year – Biotechnology venture fund – Diversified, entrepreneurial and willing to invest in the future.

18. UPMC Strategic Business Initiatives and Health Ventures Investments

19. Overcoming Translational Research Challenges  While we have had successes, they have been largely serendipitous  Road to commercialization is long and difficult  Most faculty lack the experience and skills to drive commercialization  Internal funding for “the last mile” is often difficult to find  Resource partners exist, but are difficult for a novice to navigate  Create a Program that drives commercialization Make the process nimble Make the process nimble Make access to experts part of the process Make access to experts part of the process Provide funding to reduce commercial risk factors Provide funding to reduce commercial risk factors Provide an experienced navigator from start to finish Provide an experienced navigator from start to finish

20. “Life is short, science is long; opportunity is elusive.” ~Hippocrates

21. Contact Information Carolyn Green, Director Office of Enterprise Development, Health Sciences University of Pittsburgh 412-623-3204 greence@upmc.edu www.oed.pitt.edu