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CONVERGENCE

The Smiling Heretic

    
The Burrill Report

page 4 of 5

One of the first such master agreements came in 2005 with biotech giant Genentech, which is based in South San Francisco, only a few miles from QB3 at Mission Bay. Kelly sought the agreement after he heard that Genentech had structured a master agreement with the University of California, Davis. Though the effort was led by QB3, it extends to researchers throughout UCSF, UC Santa Cruz, and UC Berkeley. In the 18 months prior to the agreement, researchers at the three campuses entered into just two collaborations with Genentech. In the 18 months after the agreement, 13 new collaborations had been set into motion.
“Reg was very clear at the outset how important this was to him, to QB3, and the mission of QB3,” says Sean Johnston, senior vice president and general counsel for Genentech, who negotiated the agreement on behalf of the company. “It really was a much broader vision, which was to bring together scientists within the state, who are doing great things, and let them do more. Out of that will come great benefits for the state and the citizens of the state. Whatever financial returns there might be at the end of the day through royalties or otherwise would be icing on the cake.”
The belief at QB3, though, is that it is not enough to work with established companies. Fostering startup formation is also an important role. In part, this reflects a belief that most things coming out of the university are too risky or too early-stage to be appealing to existing businesses, and that a small entrepreneurial venture may be better able to nurture an early-stage invention.
 “The university is very concerned about managing its risk and its reputation,” says Doug Crawford, director of industrial relations for QB3. “It’s created a lot of officers and offices to mitigate the university’s risk, but they have not invested in officers whose job it is to capitalize on opportunities.”
QB3 has been assembling a toolkit to help foster entrepreneurship among the faculty. It provides seminars, networking opportunities, and guidance from mentors such as venture capitalist Brook Byers. The institute has also assembled a clinical advisory board to help researchers determine the practical applications of an invention, and what value it might have for doctors or patients. Should a researcher hope to commercialize a discovery, QB3 has sought to provide new sources of funding, and even incubator space for fledgling companies. Such activities reflect how much the environment has changed since UCSF’s Herb Boyer joined with the venture capitalist Bob Swanson to launch Genentech.
Today, there is a growing gap between the basic research funded by the NIH and applied research devoted to producing commercial products. As the biotech industry has matured, investors have become increasingly skeptical about funding the development of technology for which commercial viability is unproven. Some scientists describe this divide between projects that are too far along to qualify for NIH funding, but not sufficiently developed to attract venture or corporate money, as the “valley of death.” 
One way QB3 has sought to address this funding gap is through efforts such as The Rogers Bridging the Gap Fund, a grant established by the T. Gary and Kathleen Roger Family Foundation. Now in its third year, the foundation has made gifts of $250,000 each over a two-year period for translational research projects. The intent is to take promising ideas and advance them to a point where traditional financing is feasible. Projects funded by these grants have included technology to deliver cancer drugs into the gut and a blood substitute capable of transporting oxygen.

The Rogers awards have served as a model for broader agreements with industry sponsors willing to fund similar types of research. Amgen, in a UCSF-wide agreement, has used a joint UCSF and Amgen panel to make awards to fund projects of mutual interest. These have focused so far on biomarkers. A new agreement under development with a major pharmaceutical company is expected to expand on this approach. 

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May 16, 2008
http://www.burrillreport.com/article-the_smiling_heretic.html

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