Technology transfer offices are vital departments for commercializing an academic’s biotech innovations, yet they can also be resource-stretched and averse to risk. Here are some ways they can streamline their process and land more deals with investors and big pharma.    

Technology transfer offices (TTOs) perform vital functions in universities by guiding academics through the process of patenting and commercializing their ideas. They also help in researching the surrounding market, closing deals with companies and leveraging networks in the industry.

However, there is a lot of variability in the attitudes of TTOs toward the commercialization of intellectual property (IP), particularly in the U.K. 

“Tech transfer offices, by and large, are pretty resource-stretched, overrun groups of people,” said Toby Reid, executive director at We Are Pioneer Group, a U.K.-based business incubator that houses and funds startup companies across sectors including technology, foodtech and biotechnology. 

However, there are some major success stories where academics, TTOs and other partners have been able to create hard-hitting spinouts or licensing deals with big pharma companies. One example is C4X Discovery, a drug discovery company that kicked off at the University of Manchester with the help of the university’s Proof-of-Principle funding program.

C4X Discovery was set up with the help of Rich Ferrie, who served in the University of Manchester’s innovation-focused subsidiary company and is now CEO of London Bioinnovation Centre. Ferrie recalled that the founders were “great guys; totally unfundable with a fantastic idea. We thought ‘to hell with it, we’ll put our cash in.’” 

C4X Discovery is now listed on the AIM stock exchange in London with many partnerships with pharma companies.

Reid, Ferrie and other experts met at the Bio Integrates 2022 event in London earlier this year, in a session called Transfer Targets. The session, led by Kevin Cox, chairman of the artificial intelligence-guided insights provider Biorelate, was set up to dispel some of the myths about TTOs. The panelists also provided some tips on how TTOs and entrepreneurs can streamline the process of getting biotech IP commercialized in the cell and gene therapy space.

Refining TTO strategies and incentives

Some TTOs are perceived as overly cautious when negotiating a deal over biotech IP with potential investors or big pharma companies, and prefer to shutter a deal than close what they see as an unfavorable deal.

Reid disagreed with this perception to a point. “I do feel that TTOs struggle to price the deal,” he conceded. “They overvalue technology. And they undervalue the risk that licensees and the investors need to take to open up a commercial opportunity.”

Often, the TTO has few options to shop for deals for early-stage biotech IP, so pulling out of a deal could mean the IP doesn’t make it into the biotech industry. However, according to Sohaib Mir, senior investment principal at the medical research charity LifeArc, this could be a strong argument for incubating and de-risking the technology for longer at the institution to get more interested suitors.

Another perception by biotech founders is that the TTOs often don’t have enough incentives to get a deal closed. Some TTO teams may worry about spinning out a failed biotech company, whereas Reid advises them to license out whatever they can, since the university doesn’t usually risk big capital on the venture. TTOs could also receive more of a share from financial upsides from the businesses to encourage them to set up successful deals. 

“What the TTO should not be is a library of patents,” said Ferrie. “There should be a very short residency time of the IP within the office. The TTO is essentially the custodian of that IP on behalf of the university, but really the aim of the game is getting stuff out of the door.”

As TTOs are small teams, they also cannot afford to specialize in the biotech field when they serve all of a university’s departments. Therefore, the panelists advised TTOs to use their expert network to advise on the economic feasibility of a particular IP.

“Getting 15 minutes of time with, let’s say, Greg Winter to discuss monoclonal antibodies is better than having five hours of time with an individual with less expertise,” commented Mir. “So it’s really about getting quality time with individuals who have the green fingers.”

TTOs from the US perspective

Hubs in the U.S. such as Boston remain model ecosystems for fostering biotech innovations. One of the reasons is that there are many serial academic entrepreneurs in the biotech industry that can easily win investments for their biotech startup thanks to the exits they have made in previous firms. 

“Those guys are skipping the seed stage and going straight for tens of millions in Series A funding,” said Mir, adding that the U.K. is still a long way from having large numbers of these serial entrepreneurs.

Another factor is that the U.S. has big venture capital funds that go directly to TTOs, incubate the ideas and launch a company with hundreds of millions of dollars. This model, made famous by firms such as Arch Venture Partners and Flagship Pioneering, isn’t yet developed in the U.K. However, increasing numbers of U.S. investors are beginning to look across the Atlantic for cheaper investments than in the U.S.

Even with the U.S. as a clear example to follow, the panelists observed that many U.K. institutions are still reluctant to follow suit. For example, We Are Pioneer Group regularly consults with big pharma companies such as Astellas and AbbVie for advice on how to accelerate the development of their resident biotech startups, which isn’t common practice.

Furthermore, there is a lot more variation in the U.K. than in the U.S. in terms of how ready biotech spinouts are to negotiate deals with big pharma companies. According to Jenny Laird, VP, search & evaluation neuroscience at Eli Lilly, the big pharma’s external legal council must often walk spinouts through some basics of the market position. She proposed implementing a nationwide set of baseline documentation in TTOs that educate biotech founders so that they don’t start from scratch.

“Certainly in Ireland, all the terms and conditions of licensing are uniform across the state,” answered Ferrie. However, he warned that it’s not always possible to standardize licensing contracts fully. “Once you try and bring process to bear in technology transfer, it’s not a cookie cutter approach.”

The reproducibility headache

When transferring IP from academia to industry, many companies are wary of a crisis of replication in the world of science, where the same experiment run by a different academic lab can produce different results. The vital work needed to validate the experiment is typically not funded by traditional research grants.

“I think that the standards of academic research are great in some senses, but not very process-orientated,” said Ferrie. “I don’t think those kind of robustness challenge experiments are typically the kind of thing academics can publish. They do the experimental stuff, but the validation piece is often not in place.”

To address this step, the Innovate U.K.-funded Innovation to Commercialisation of University Research (iCURe) program provides up to £35,000 to biotech entrepreneurs in addition to several months of training and support to validate their science. This then prepares founders for entering the market and makes their IP more licensable.

Reid emphasized that bringing in the expertise of big pharma companies is also key for the TTO to understand what data are needed to convince potential investors that the technology is validated. This role is often fulfilled by Astellas and AbbVie in the case of We Are Pioneer Group.

“The likelihood of success of the early-stage opportunities is dramatically increased with an interaction with large pharma,” said Reid. Ironically, he added, most founders don’t end up getting a deal with that particular big pharma company, but with another party.

Finally, the problem of translating the technology in TTOs could also be tackled if the U.K. finds more serial entrepreneurs that know well the validation steps at an early stage.

“Sometimes you end up with suboptimal quality of people working at stuff at a very early stage,” explained Reid. “It just becomes a zombie project and nothing really moves forward.”

“I think there is a role to play for keen, hungry postdocs and research assistants who are curious and intelligent, who want to learn more about business, who are trusted by the academic or lead investigator who understand the technology, but are interested in doing something else.”