William R. Brody

1
University Perspectives on InnovationSeptember
28, 2005BMES-IDEA meeting

• William R. Brody
• President, The Johns Hopkins University

2
Subtitle Bill Brodys Recipe for Successful
Entrepreneurship Top 10 Dos and Donts
3
Disclaimer

• 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, doesnt have an official position,
  because no one can really speak for the entire
  university

4
Achtung!

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

5
Technology Transfer 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.

6
Early Approach to Patenting

• While at U. Chicago in 1942, Russell Morgan
  invents the x-ray phototimer
• The University sells the patent for 1 to GE
• Morgan moves to Johns Hopkins
• U of C solicits Mrs. Morgan for donation

7
The Mertonian Tradition --Open Science

• In 1970 Nobelists Dan Nathans and Hamilton Smith
  publish discovery of restriction enzymes
• It never even occurred to us to seek a patent

8
The Bayh-Dole Act of 1980

• Intended to promote the commercialization of
  government-sponsored research
• Prompted by low rate of licensing patents from
  government research (many of which were
  defense-related)
• Intent was not to create a new revenue stream for
  universities (though that effect was seen as a
  possible benefit)

9
Technology Transfer Revenue Growth
U.S. Universities Gross Licensing Revenue
FY1991 to FY2000
Source AUTM Licensing Survey FY2000
10
Universities Vary Widely in Generating Licensing
Income
Institution Licenses Active Income in FY2000 Av. Income per License
Columbia 143 138,562,000 969,000
U. Penn 45 26,493,000 589,000
U. Ca. System 781 261,522,000 335,000
Emory 46 10,672,000 232,000
Johns Hopkins 166 14,376,000 87,000
Baylor 115 9,415,000 82,000
U. Washington 385 30,213,000 78,000
Harvard 163 12,195,000 75,000
U. Pittsburgh 47 3,259,000 69,000
Washington U. 255 8,396,000 33,000
Source AUTM Licensing Survey FY2000
11
Why is this?

• Success in patent licensing requires one big
  hit -- akin to winning the jackpot at Las Vegas
• One big hit makes the licensing portolio
  profitable this drives tech transfer offices to
  focus on the potential home run
• Must identify the one potential big hit from a
  sea of possible invention disclosures

12
Picking Winners -- how good are we?

• John Simpson
• Julio Palmaz
• Paul Bottomley

13
Cardiac Surgery as a model for innovationDevelopm
ent of Valve Replacement Surgery

• Dr. Charles P. Bailey First successful mitral
  valve commissurotomy, June 10, 1949 -?no company
• Dr. C. Walton Lillehei VSD closure using
  cross-circulation (1954) -?Medtronic
• Dr. Richard DeWall Heart Lung Machine using
  Bubble Oxygenator (1955) -?Bentley Labs
• Dr. Albert Starr First successful mitral valve
  replacement with Starr-Edwards ball-valve
  prosthesis, August 25, 1960. -?Edwards
  Laboratories

14
Cardiac Surgery as a model for innovation Many
Companies Spawned

• Edwards Laboratories Shiley Laboratories
• Bentley Laboratories Pacesetter (Siemens)
• Medtronic Hancock Labs
• Advanced Cardiovascular Systems (Guidant)
• Boston Scientific Cordis (JJ)
• St. Jude Medical Ventritex

15
So you want to start a company?

1. Idea
2. Intellectual property
3. Investment Capital
4. Management Team
5. Define your personal objectives
6. Make money?
7. Get your idea into clinical practice
8. Win a Nobel Prize
9. Stay at the university get tenure
10. Move into the commercial sector

16
How to Avoid Making Mistakes
17
Recipe for SuccessMedical StartupsTop 10 List

1. 510 K rather than PMA
2. Recurring revenue stream
3. Significant barrier to entry
4. Low development cost
5. Cost effective/less invasive/safer/better must
   be clearly evident

18
Recipe for SuccessMedical StartupsTop 10 List

1. New or rapidly emerging market with no dominant
   competitor
2. Avoid Inventors Paranoia
3. Dont serve two masters (conflict of commitment)
4. Minimize Conflict of Interest
5. Be Lucky

19
Louis Pasteur

• Chance favors the prepared mind.

20
Advice to the entrepreneur

• When you have become successful, give generously
  back to your university
• (and if you didnt go to a university in the
  United States, please donate to Johns Hopkins
  University)

21
The End
22
References

• On the Take, Jerome P. Kassirer, M.D. (2005,
  Oxford University Press)
• Universities in the Marketplace, Derek Bok (2003,
  Princeton University Press)
• Los Angeles Times articles on conflict of
  interest among NIH senior scientists by David
  Willman, December 7, 2003 and December 22, 2004

23
COI Dilemma (as stated by Kassirer)

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

24
I cannot be bought

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

25
Effects of Funding Source on Study Outcome

• Study on thromboembolic complications of 3rd
  generation contraceptive agents by Richard Smith
  in British Medical Journal
• Funded by public money (e.g., NIH) showed
  thromboembolic complications occurred with 3rd
  generation contraceptive agents
• Funded by pharma No complications recorded

26
Blank
27
Blank
28
Blank
29
Blank