Gallo may benefit UMAB commercially

Maryland officials hope AIDS researcher Robert C. Gallo's move to the University of Maryland at Baltimore will spur technical innovation and a wave of new products and local jobs making them, but the university office that guides technology transfer has a much smaller budget and a slimmer track record than counterparts at top universities around the nation.

Furthermore, most companies that have received licenses to commercialize products developed at major University of Maryland campuses are not based in Maryland, university figures show. Research at UMAB has led to the creation of five new companies, the university says, but none has yet scored a major commercial success.


"I think that reflects that we are at an early stage," said Joann Boughman, UMAB's vice president for academic affairs. "There was nothing here eight years ago."

UMAB's limited track record does not discourage observers from other universities' technology commercialization offices. They argue that technology transfer, especially the commercialization of biomedical research, is a high-risk, high-reward business by its nature. The answer, they insist, is to make Maryland's effort bigger and bolder.


"We wouldn't have Silicon Valley here, we wouldn't have biotechnology, if not for Stanford," said Hans Wiesendanger, senior associate at Stanford University's Office of Technology Licensing in Palo Alto, Calif. "We have to do it or the national economy will be sunk. Business is increasingly getting its ideas from universities."

But major California universities embraced the idea of commercializing scientific research up to a decade sooner than Eastern counterparts who feared that working closely with business would compromise universities' intellectual mission.

As a result, universities such as Stanford and the University of California at San Francisco have licensed far more products, collected far more in royalties on product sales and created far more successful companies and jobs than spinoffs from most Eastern universities, even intellectual powerhouses such as Johns Hopkins and Harvard.

UMAB has licensed only 27 products since its Office of Technology Development opened in 1987, 18 of them in the past 23 months, Dr. Boughman said. UMAB received only about $250,000 in royalties from those products last fiscal year, and only three of the 18 product licenses it has granted to outside companies since July 1993 went to Maryland firms.

By comparison, the University of California system expects to receive $58 million in licensing revenues this year, said Terry Feuerborn, director of technology transfer for the California system. Stanford's royalties are nearly $40 million annually, Mr. Wiesendanger said.

University of California research has led to familiar products such as the nicotine patch, which helps smokers battle withdrawal symptoms as they attempt to quit, and vaccines for hepatitis B. Mr. Feuerborn said the system has "a portfolio of about 2,000 patents."

The biggest royalties at both Stanford and the University of California come from payments related to the famous Cohen-Boyer patents, named for the two researchers who invented the basic technique of splicing genes from one bacterium to another that spawned all biotechnology drug development. One of the inventors was on Stanford's faculty, and the other taught at UC-San Francisco.

Biotechnology research has spawned commercial innovation and thousands of jobs within a few miles of the universities. Officials at the schools point to Genentech Inc., a biotech pioneer that employs 2,700 people, and Chiron Corp., which employs 2,700, as examples of companies that can spring from basic research.


However, the hepatitis vaccine is made by a New Jersey drug company, showing that local economic benefits from technology transfer aren't automatically major.

Even prestigious Eastern research centers have not done nearly so well as the California schools. Harvard took in about $6 million in product licensing royalties last year, Joyce Brinton, technology and trademark licensing director, said. Johns Hopkins University spokesman Dennis O'Shea said that university has licensed 234 products to outside companies, including 52 last year, and collected about $1.7 million in fiscal 1994 royalties.

UMAB president David Ramsay, who was recruited from UC-San Francisco partly because of his experience supervising its technology transfer program, said Dr. Gallo's work at the National Institutes of Health in Bethesda has already generated marketable products.

A test kit Dr. Gallo helped develop for HIV antibodies has accounted for more than half of NIH's product royalties since 1985, more than $40 million so far. Its $4.5 million in 1994 royalties was about a quarter of NIH's $18.5 million in total royalties.

"Just imagine if they are successful in coming up with an AIDS vaccine," Dr. Ramsay said. "Not only would it be tremendously helpful to society, but the commercial potential would be enormous."

Hopkins, UMAB and the National Institutes of Health are the core of the technology base that Maryland's last two gubernatorial administrations have counted upon to win the state a beachhead in the emerging biotechnology industry and the broader life sciences industry. But all three institutions are still trying to catch up to technology transfer leaders.


Earlier this year, NIH hired the director of UMAB's technology development office to overhaul its own commercialization effort. Sympathetic outsiders point to the hiring of ex-UMAB official Maria Freire to run NIH's Office of Technology Transfer as evidence that UMAB's effort, while still in its infancy, is respected.

"The people at Maryland have a good reputation," said Harvard's Ms. Brinton. "The biggest thing is time and resources. The

technology we work with takes a long time to turn into money. The other thing is the resources devoted to it. If there's not enough person power available to do the work, which is very labor intensive, less of it gets done."

UMAB's effort has a much smaller staff than many of its counterparts. It has one product licensing specialist, the key person who negotiates deals with companies that buy the right to develop research findings into products, compared to eight at Stanford, according to officials at each school.