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Vol. LVIII, No. 9
May 5, 2006

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2005 Royalties Nearly Double from '04
Tech Transfer Helps NIH Breakthroughs Break Through

On the front page...

To say that NIH intramural researchers had a banner year in 2005 is an understatement, at least according to one business standard. Last year, the NIH Office of Technology Transfer collected close to $100 million in royalties from products or processes invented by scientists working here. That's nearly double the $56 million-plus NIH inventions earned for 2004. Even better for medical research are the millions more people these new concepts will help by going commercial.


One of NIH’s top inventions — a stent coated with a chemotherapy drug — spares some people heart bypass surgery.  

Take, for example, one of the top NIH inventions in recent years — the Taxol-coated stent. Both the drug Taxol (paclitaxel) and the stent were already on the market separately, being used to treat cancer and heart disease, respectively. Who would have thought of combining the two — coating the stent with Taxol — for even further benefit? Two NIA scientists did. Dr. Steven Sollott and Dr. James Kinsella found that implanting stents coated with the chemotherapy drug significantly reduces re-clogging of arteries. The invention, which went on the U.S. market in 2004, has been a medical marvel for the more than half a million Americans each year who now can avoid heart bypass surgery by having the stent placed instead. It was also the top commercially successful intramural invention for fiscal year 2005, based on royalty income.

OTT has dozens of similar success stories about brainstorms-turned-breakthroughs by NIH inventors — ideas that may never have reached nearly as many people without going through the patenting/licensing process that OTT oversees.

"There are more than 200 products on the market that include NIH technologies," says OTT deputy director Dr. Bonny Harbinger. "Employees should be extremely proud of what's coming out of here."

Medical Research — Spreading the Results

In addition to garnering millions of dollars in royalties — which are split between inventors and the institute or center where the invention was made active — there's also another economic reason for NIH to shout its commercial success from the rooftops: NIH inventions boost the nation's return on its investment in medical research. In an era of flat budgets, that's news everyone wants to share. NIH director Dr. Elias Zerhouni made that case Apr. 6 to Congress at the House appropriations hearing. Showing the stent and a few other successful NIH inventions, he pointed out the broad health dividends the American public receives compared to the relatively small amount it spends per capita on medical research. Innovations that started with NIH ideas are a crucial part of the bottom line.

"NIH's intramural inventions generated about $100 million in royalties last year, which is much larger than other science-oriented federal agencies such as NASA," notes OTT director Dr. Mark Rohrbaugh. In fact, NIH's OTT accounts for more than half of all royalties for all federal laboratories, due in part to the nature of the research conducted here. The world's hunger for more effective, easier and faster therapies, medical procedures and methods to
These products are just a sampling of the dozens of OTT success stories about brainstorms-turned-breakthroughs by NIH inventors.  
diagnose ailments only grows stronger every year. Also, much of NIH's royalty income is generated by biological material licenses that are aimed more at research than clinical/medical use in patients, points out Laurie Arrants of the NINDS Office of Technology Transfer.

With an 80-person staff, including contractors, OTT currently manages more than 1,500 active licenses for NIH and the Food and Drug Administration. By law, inventions that emerge from NIH labs belong to the federal government. Successful commercial products that license and incorporate NIH discoveries bring in royalty income that the originating IC can pump back into its research program to pay tech transfer costs and continue work on other projects. The inventor as well can earn up to $150,000 per year in royalty payments.

So if patenting a concept is that beneficial to public health, the public's balance sheet, the NIH research enterprise as well
Top Commercially Successful NIH Inventions

Over the years, NIH scientists have invented hundreds of vaccines and therapeutics, diagnostics, instruments and devices as well as research materials that have been successfully delivered to the public via commercial development. Below are the top 10 for 2005, based on royalty income.

1. Paclitaxel-Eluting Coronary Stent System (NIA)

2. Monoclonal Antibody for Treatment of RSV (NIAID)

3. Serological Detection of Antibodies to HIV-1 (NCI)

4. AIDS Drug ddI (NCI)

5. Paclitaxel as a Cancer Treatment (NCI)

6. Synthetic Thyrotropin as Adjuvant in Thyroid Cancer (NIDDK)

7. Hepatitis A Vaccine (Strain HM-175) (NIAID)

8. Nutritional Supplement to Treat Macular Degeneration (NEI)

9. Radioimmunotherapy for Non-Hodgkin's Lymphoma (NCI)

10. Proteosome Inhibitor for Treatment of Multiple Myeloma (NCI)

as its scientists, why are some researchers reluctant to enter the arena?

"Probably one of the strongest factors influencing the investigators is both in volume and length of time it can take to go through the initial paperwork and the review process of filing for a patent," Arrants explains. "Whereas an investigator may be able to prepare several publications in a 2- to 3-year period, a single patent can take 2-3 years just to get to first review. Clinical investigators have the additional process of regulatory review by the FDA. Meanwhile, the scientist wants to publish — and publishing certainly gains attention for licensing — but early-on disclosure of the invention must be avoided if commercialization is being considered, which sometimes results in rushed patent filings or delayed publications.

"So an investigator's reluctance is easy to understand in light of getting the moons and stars of scientific research, patenting and the regulatory process to align into a smooth, integrated pattern, and not getting as much recognition in their review from commercialization as is given for publication," says Arrants. "It is also why technology transfer in a federal lab is very much an art and dependent on tedious attention to detail and luck."

After Your 'Eureka' Moment

The first step to commercializing an invention is sharing your idea with your IC tech transfer component, Rohrbaugh said. Each IC has a tech transfer staff that initiates the process by working with the investigators to claim and report inventions. Technology development coordinators (TDCs) for each IC are listed online at the OTT web site. The IC's tech development staff does an initial review of the idea before an employee invention report is passed along to OTT staff, who determine patentability and work with the inventor and the TDC to file for a patent. In essence, OTT and TDCs work together to help investigators protect the invention and otherwise navigate the paperwork. "It takes this teamwork of inventors, ICs and OTT to successfully begin commercialization with a strong patent strategy," Arrants says.

"Asking an inventor to participate in the patent and licensing process is very labor intensive," agrees NHLBI Technology Transfer and Development Director Lili Portilla, who has been involved in tech transfer since 1989. She remembers when most TDCs did tech development only part-time, in addition to their regular jobs. "Now the process and the profession have become very sophisticated," she says.

Still, old perceptions about the difficulty of the process may also cause would-be inventors moments of pause. OTT began handling technology in 1989 and the learning curve seemed steep.

"Navigating the realm of technology transfer takes time and effort away from science," acknowledges Donald Bortner, NIA administrative officer and TDC. "It requires persistence in overcoming barriers to commercialization and tolerance working under a complex set of laws and rules. The early years of technology transfer presented challenges associated with less experience. Some scientists remain apprehensive about devoting too much time to commercializing discoveries at the expense of missed scientific opportunities and fewer publications. NIH's experienced cadre of technology licensing transfer attorneys and specialists, coupled with better contract support with law firms, enhances the likelihood of success by providing more support for scientists."

  NIH director Dr. Elias Zerhouni took a handful of homegrown inventions — including the stent (top, l) and the HIV-AIDS test kit (top, r) — with him to Capitol Hill to demonstrate the public’s return on its investment in NIH.
However, the process is not for every scientist, nor should it be, says Dr. Robert Balaban, chief of NHLBI's Laboratory of Cardiac Energetics. His research group invented an imaging technique that is among the top 20 royalty generators for 2005. Success didn't happen overnight, he says, and not without a lot of hard work.

"I believe the NIH process has improved greatly from when we did our original filing many years ago," he recalls. "Frankly, our original experience was quite painful. Over the last several years the applications we have filed have been much easier and more streamlined. We have enjoyed working with some very skilled contract lawyers and advisors in putting together sensible packages. Some of this is likely due to our own experiences in this process."

The NIH mission to get the benefits of medical research delivered to the public it serves is paramount, Balaban stresses, and a scientist should do a lot of soul-searching before beginning tech transfer procedures.

"The patent experience has really not changed my research agenda, nor do I believe it should," he explains. "We completed what I thought we could contribute to the field more than 8 years ago and rather than 'milk' more applications for this technology, my lab has moved on to many other topics using the unique NIH resource. Though I believe the patent process is critical for the translation and commercialization of technology, as well as recouping some of the research costs, I do not believe that NIH research should be guided by the pursuit of intellectual property alone. When an opportunity arises where protecting an invention can enhance the public investment, this should be done and it is a very important aspect of the translation of basic research to clinical or practical application."

OTT chief Rohrbaugh agrees completely. "We're always working to find the right balance," he concludes. "We try to find ways to stimulate tech transfer without inhibiting further research and development."

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