1. - 1 - ACADEMIC INSTITUTIONS AS GENERATORS, HOLDERS, AND TRANSFERORS OF IP Dr. Michael J. Cleare Executive Director, Science and Technology Ventures, Columbia University, New York

2. R&D EXPENDITURES AT U.S. UNIVERSITIES (FY 1992-04) $B

3. INDUSTRY-SPONSORED R&D EXPENDITURES AT U.S. UNIVERSITIES (FY 1992-04) $B

4. U.S. UNIVERSITY TECHNOLOGY TRANSFER PRODUCTIVITY $350 Bn Research 155,000 Disclosures Commercialization 28,000 Active Agreements 4,600 Start-Ups AUTM Licensing Surveys FY91- FY04 products Assessment platforms 3.0% 18% 43% 34,500 Issued Patents 22% $2.3M/per disclosure 16% 66,500 Patent Applications 52% 61% FY 01

5. Technology Transfer Trends Among U.S. Universities License income and the number of new licenses have increased substantially since the late 1990s In 2004, 4,783 new licenses were executed, up from 4,507 in 2003 3,100 new products have entered market between 1998 – 2004 due to University tech transfer 1998199920002001200220032004 Total License Income to U.S. Universities ($M) 7128491,2301,0301,2351,3061,385 Total # of U.S. University Licenses Yielding Income 7,0137,8618,5239,04610,12810,68211,414 *AUTM 1998-2004 data

6. Public Interest Private Interests OBJECTIVES OF U.S. UNIVERSITY TECH TRANSFER

7. - 7 - STV’S STRATEGIC MISSION Challenge: Finding Optimal Balance Transfer inventions and innovative knowledge to outside organizations for the benefit of society on a local and global basis Societal Good Service to PIs Minimize Risk to Columbia Maximize Net Revenues Whenever appropriate this is to be carried out at going commercial rates so discretionary funds are brought into the university to improve educational and research activities and capabilities Support our researchers broadly in their interactions with industry Ensure compliance with our obligations to the government, license partners, equity partners, and foundations

8. - 8 - COLUMBIA RESEARCH EXPENDITURES, FY2005

9. - 9 - Over $550 million in research support 24,500 students (7,500 u/grads, 17,000 graduate & professional) 4,700 full-time research and teaching faculty 76 Nobel Prizes awarded (1906-2006) World-class medical center Many inter-institutional collaborations ~290 new invention disclosures per year ~200 new patent applications per year STV’S “RAW MATERIALS”: COLUMBIA UNIVERSITY’S INTELLECTUAL CAPITAL

10. - 10 - KEY STV BUSINESS PROCESSES AND PRODUCTS Licenses Equity start-ups Industry Sponsored Research Agreements “Gateway” Agreements (material transfer, confidentiality) ~75 ~10 ~125 ~950

11. 292

12. 258

13. Executed Agreements with New Portfolio Companies 4 5 5 9 10 7 9 1010

14. PATENT APPLICATIONS FILED YEARNEW USTOTAL USTOTAL FOREIGN TOTAL APPLICATIONS FY 200042152188340 FY 200172201134335 FY 200281226114340 FY 200312030965374 FY 200415035829348 FY 200517239349442 FY200622747152523 Total U.S. Patent Applications includes provisional applications, utility applications, continuation applications, divisional applications and PCT applications

15. - 15 - STV GROSS REVENUES, FY1984 - 2006 Note: all pre-2006 data for FY06 best estimates from CIE as of 7/31/06. $1.75B cumulative gross revenues to date FY06: $20M in sponsored research FY06: $234M in gross license revenues $M

16. - 16 - Chalfie’s GFP* Arrow Catheter (Modak) Blackberry 7100 T (Im)* SIPquest* * * CHO cell line (Chasin), not patented (1980 PNAS) SELECTED PRODUCTS BENEFITING FROM COLUMBIA INNOVATION

17. - 17 - ISSUES FOR DISCUSSION Academic vs. translational research Patent filing vs. publication IP segmentation -What to patent -What to license -Example: research tools Challenges of early-stage technology -Industry / investor reactions -How to get “proof of concept” funding Disruptive / breakthrough vs. improvement IP: challenges of both Exclusive vs. non-exclusive licenses

18. UNIVERSITY Academic Research (“Pushing back the Frontiers ”) Teaching Scholarship (“Human Capital”) Interactions with Society Interdisciplinary Initiatives Translational Res./Tech Transfer Economic Dev.(local, natl., global) Spin offs/jobs/GDP Focused short courses. Corporate/Government Rels Agencies, Alternative Funding (“Reducing to Practice”) THE NEW INTERFACE UNIVERSITIES - A MODIFIED CORE MISSION

19. - 19 - ROLE OF TRANSLATIONAL RESEARCH Traditional academic inquiry values pursuit of pure knowledge “Translational research” extracts value for society from “ivory tower”, without influencing ongoing academic pursuits Jobs Taxes GDP Social good Training Federally-funded research Pure knowledge

20. - 20 - “PROOF-OF-CONCEPT” PROBLEM Industry & investors increasingly “risk averse” Less willing to fund early-stage ideas  fewer start-ups, fewer licenses Federally-funded research Pure knowledge Results in potential loss to society from high-value early-stage innovations Requires new approaches: university seed funds, gov’t funds, incubators, others?

21. - 21 - INDUSTRY SPONSORED RESEARCH INCREASINGLY CRITICAL Industry sponsored research simultaneously boosts pure knowledge and moves products into society Improvements to industry before and beyond blockbuster products Often, solution for early-stage innovations Quasi-options, not just grants Federally-funded research Pure knowledge

22. - 22 - COLLABORATION INCREASINGLY IMPORTANT Most “low hanging fruit” already gone (i.e. Axel) Univ. A Univ. B Next wave likely to be more complex, requires collaboration - Inter-University - Gov’t - University Multi-party collaborations greatly expand likelihood of product matches Collaboration requires work - peer-to-peer vs. managed - required time, people, $ to manage complexity Critical role for government to play – especially in initiation! Federally-funded research Pure knowledge

23. - 23 - Univ. technology Transferred to society Licensed at going rate Funds for Univ. research 12 34 STATE $ FEDERAL FUNDING $ INDUSTRIAL $ UNIVERSITY TECH TRANSFER: THE VIRTUOUS CYCLE KNOWLEDGE BASIC RESEARCH IP / KNOW-HOW INDUSTRIAL IMPROVEMENTS PRODUCTS JOBSTAXESEXPORTS RETURN ON FEDERAL INVESTMENT GRADUATES PROFESSORS INFRASTRUCTURE EQUIPMENT

24. KEY MECHANISMS FOR TRANSFERRING ACADEMIC KNOWLEDGE TO INDUSTRY Faculty contacts and consulting Published papers, talks at meetings, patents and applications Columbia graduates STV industry contacts Deals- Licensing/Spin Outs STV web site (www.stv.columbia.edu)

25. COLUMBIA CONTRIBUTES TO SUCCESS OF STARTUP STARTUP GROWTH STV ACTIVITIES SOURCE OF FUNDS: USE OF FUNDS: Government grants Basic research Government, company sponsors Applied research STV-led turnarounds SBIR, angels, seed VC Prototypes, models “proof of concept” Early stage VC Product development Inventor makes Discovery Invest in patent, evaluate commercial opportunities Collaborate with other faculty/industry Business plan Seed funding- proof of principle Introductions to investors, mgmt. SBIR proposals License IP - balance equity and royalties Add experts to SAB, grad students STV board observer IP bundling with other institutions Ongoing basic research

26. - 26 - VALUE Technology Development Funding Sources Gov’t and Company Grants SBIR, angels, seed VC Early stage VC Proof of Concept Funding Gap Validation TIME Public R&D Funding Private Funding Feasibility Basic Research/ Discovery Product Development and Marketing STV Licenses Technology STV Pre-Seed Fund Technology Value Captured (1) “PROOF-OF-CONCEPT”: BRIDGING THE GAP

27. - 27 - Why 1980 Bayh-Dole Law was needed University technology is very early stage, unknown feasibility High risk during development, manufacture and marketing Initiative to increase effectiveness and efficiency of federal investments -Many untouched innovations -Very few products, jobs or other public benefits Bayh-Dole Law has produced very significant results for U.S. Economy Estimated >$40 billion of economic activity / year Since 1980, >4,700 new companies NIH estimates 15x return on investment Many useful new products and life-saving new pharmaceutical products HISTORY AND IMPACT OF BAYH-DOLE