Since the cost of getting a new drug to market is about $1 billion, Innes said such products could not be developed with reduced funds.
“Anything that would inhibit our ability to acquire patents would be catastrophic,” she said.
Picking the moneymakers
Because patents come at a high price, usually thousands of dollars each, Innes said the office must be selective in its distribution.
She also said the volatile nature of patenting innovations — a process known as tech transfer — makes the field difficult to predict.
“Tech transfer is really a long-term investment,” she said. “You can’t say, ‘I know this is going to be worth a million dollars.’ It’s really a lot of art and luck at the end of the day.
“How do you measure the value of things that might happen? There are any number of things that might fail.”
Dhiren Thakker, associate dean of the School of Pharmacy and member of the office’s advisory board, said entrepreneurship is a risky enterprise.
“It’s hard to predict,” he said. “Maybe out of every ten companies that are formed, only one or two truly succeed.”
Revenue unsubstantial
The office is funded by facilities and administration fees from research sponsors and by revenue from innovations already brought to market. It retains 20 percent of the net revenue garnered by sales of licensed products, while the remaining 80 percent is split evenly between the inventor and his department.
Without a steady stream of sponsorship funding, Innes said staff cuts could be imminent.
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“In an environment where state budget cuts are creating all sorts of problems, we benefit every time an invention is licensed because a portion of the profits come back,” said Tim Quigg, associate department chairman of the Department of Computer Science and member of the office’s advisory board. “We use those dollars in many cases to supplement the educational and research budgets of the department.”
Innes said the office’s income is not yet substantial.
“We have not made a ton of money,” she said. “We only bring about $3 million dollars in per year and that’s split among many, many people.”
The office does not fund any projects directly, but the revenue that goes back into departments benefits researchers and allows them to further their studies.
The office holds 472 U.S. patents and 10 U.S. Trademarks.
Entrepreneurs
Quigg said different innovations warrant different paths.
“There are some inventions where the best approach is to license it to existing industries,” he said. “In other cases, the nature of the invention is such that it can best be brought to market by starting a new company.”
Quigg said this way of operating works to reward all sides involved.
“The fruit, the inventions coming out of the labs at UNC, can and should have a positive impact on creating jobs and stimulating the local economy,” he said. “The office gives priority to local start-ups.”
Innes said she hopes the office will be able to give back to the state and stimulate the economy.
“We want companies to locate in North Carolina and provide job opportunities for our graduates,” she said. “Most of our start-up companies would choose to locate here because our faculty is closely linked to the research done at the University.”
Chemistry professor Joe DeSimone worked with the office to launch Liquidia Technologies, a particle-based vaccination and therapeutics start-up company based in the Research Triangle Park that required almost 100 patents to start and now employs more than 60 people.
“The key asset of a new biotech company is patented information,” he said. “Either patented technology, or a patented compound.”
DeSimone said revenue won’t start coming back to the University until the company starts generating revenue itself, which could take a couple of years.
However, in the current economic climate, he said generating jobs is more important than collecting revenue.
“We’ve all got to be focused on job creation right now,” he said.
Thakker had a similar experience when he collaborated with the office to cofound Qualyst, which works with new technologies to discover and develop drugs.
Unfortunately, Thakker said, Qualyst has generated only a small amount of royalties.
But he said it’s not all about the money.
“It’s about helping faculty transfer their research into society.”
He also said providing employment is a boon of start-ups.
“Even if it’s 10, 15, 20 employees, it’s combating unemployment,” Thakker said.
Ted Zoller, executive director of the Center for Entrepreneurial Studies in the Kenan-Flagler Business School, leads “Launching the Venture,” a program that helps entrepreneurs on campus turn their ideas into feasible projects.
And despite the current economic state, Zoller said he believes there will be a rise in the entrepreneurial economy.
“The economy is healthy for entrepreneurship because people are more realistic as to what can be started,” Zoller said. “They are tested in the market more quickly and are forced to make stronger ventures.”
Staff Writer Lydia Rusche contributed reporting.
Contact the University Editor at udesk@unc.edu.
