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Venture Development
Technologies developed at UT Southwestern can be commercialized through either licensing or the development of a new company (a "NewCo"). The Venture Development group is charged with developing startup companies, which benefits the university directly through the ownership of equity, and indirectly through the translation of academic research into commercially profitable products and services.
The Venture Development group actively seeks out and participates in the development of UT Southwestern technologies into entrepreneurial ventures. Venture Development projects benefit from the accumulated experience of the staff, who have in aggregate over sixty-five years experience in business development, research and technology management in pharmaceutical, biomedical and specialty chemical industries.
The strategy for UT Southwestern's venture development program is not to measure success by the total numbers of NewCos incorporated. Rather we are focused on the establishment of quality entities, which have substantial technologies, experienced management and adequate funding to achieve their strategic goals and build value for the equity holders, which includes the university. In some cases we have combined multiple UT Southwestern technologies into a single strong company, rather than forming multiple small NewCos.
The Process
When a new technology is submitted to the Office for Technology Development it is described by the technology analyst who interviews the inventors and then checks for prior art, patents or other publications in various public and private subscription databases. The technology is reviewed by all of the OTD staff for commercialization potential, including patent possibilities, likely interested parties for licensing, and potential for placement into a start up company project.
Those technologies that seem to have the special potential to become part of a new commercial entity are selected by Venture Development to become a new venture project and a project leader takes responsibility for it. In the following weeks and months the project leader will investigate the potential market, comparable companies in the space, investment deals that have occurred for similar efforts elsewhere, the availability of other enabling technologies, whether here or elsewhere, and all other resources that would be needed to establish a NewCo based on the core technology. Throughout this process a "value proposition" begins to take shape and at some point a start-up manager is identified. The project leader serves as the start-up manager for the internal development phase and until an outside person is named to head the NewCo.
Technologies for NewCos are licensed from the university in exchange for equity in the company. The license equity is shared with the inventors. In addition, the university may receive additional equity as founders equity for value added into the NewCo through the company formation and business development work. Unlike the license equity, this equity is not shared with inventors but rather is retained by the university as a means of defraying its sunk-in costs related to forming the company.
The venture development process operates with a team, typically led by a member of the Venture Development group working with a member of the Technology Licensing group, the faculty inventors, outside entrepreneurs, advisors from industry, the venture community, and others as may be needed.
The Steps
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Identify one or more technologies that justify a NewCo project.
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Develop the value proposition working with the inventors, the Technology Licensing Group, outside entrepreneurs and advisors.
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Develop the terms of the NewCo structure and the technology licenses.
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Assist in the development of the business plan and company structure, including funding.
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Execute licensing consequent with the development of the funding.
The Companies that Have Received Funding
Myogen, Inc.
Quotations from Myogen website:
"Myogen is a biopharmaceutical company focused on the discovery, development and commercialization of small molecule therapeutics for the treatment of cardiovascular disorders. Myogen has recently begun trading on the NASDAQ stock exchange as MYOG.
"The goal of Myogen's target and drug discovery research is to discover and develop disease-modifying drugs for chronic heart failure and related disorders. The discovery research involves the integration of three research programs supported by a proprietary heart tissue bank, and involves collaborations with the academic laboratories of three prominent scientists working in heart muscle disease: Dr. Eric Olson at the University of Texas Southwestern Medical Center (UTSWMC), Dr. Michael Bristow at the University of Colorado Health Science Center (UCHSC) and Dr. Leslie Leinwand at the University of Colorado (UC)."
Reata Discovery, Inc.
Quotation from Reata Discovery website:
"Reata Discovery, Inc. ("Reata") is a biopharmaceutical company formed to discover, develop, and commercialize new drugs that target major unmet clinical needs in cancer and neurodegenerative disease. Reata combines clinical candidates, drug discovery platforms, and renowned scientists from leading research institutions. Reata is developing a portfolio of drug candidates and plans to have two new classes of small molecule, chemotherapeutic drugs in clinical trials during 2004."
News release: New Dallas biotech firm the result of unique public-private partnership.
MacroGenics, Inc.
Quotations from MacroGenics website:
“The Mission of MacroGenics, Inc., is to develop, manufacture and commercialize biotechnology products including immunotherapeutics for cancer, infectious diseases, and autoimmune disorders.
The Company will use its core technologies to identify novel prophylactic, therapeutic and diagnostic targets and to optimize the activity of antibodies and vaccines to combat life-threatening diseases.”
The UT Southwestern technology in MacroGenics is the ELI technology developed in the laboratory of Dr. Stephen Johnston, which was the basis for the start-up of Eliance Biotechnology in September 2000. Eliance merged with MacroGenics in 2002.
Light Biology
Light Biology is a genetic analysis technology company founded on the invention at UT Southwestern by Dr. H. R. Skip Garner of the Digital Optical Chemistry technology. The patent for this device was issued September 25, 2001, US Patent No. 6,295,153. Light Biology is currently engaged in partnership negotiations.
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