Too often, scientists at Iowa’s universities watch as the intellectual property they’ve developed is sold to out-of-state companies. To encourage the development of more home-grown Iowa biotechnology companies, the Biosciences Alliance of Iowa is working with the Iowa Board of Regents to form a “technology development organization” to connect the state universities’ biotechnology research with entrepreneurs seeking to commercialize those discoveries into new products.

The proposed not-for-profit organization, for which the alliance plans to seek $1 million from the Grow Iowa Values Fund to launch, would function as a part of the Regents system to develop the universities’ technology to the point that it can be used by companies. The formation of such an entity was recommended last year by the Battelle Memorial Institute in the “Iowa’s Bioscience Pathway for Development” study it conducted for the Iowa Department of Economic Development.

“This, of course, goes across institutional lines, hopefully without creating something that’s going to be too bureaucratic,” said Bob Downer, an Iowa City attorney and the Board of Regents’ representative on the Biosciences Alliance. “We felt that an entity that formally brought together the institutions with an umbrella organization with respect to what’s being done on each campus was probably very beneficial.”

Among the benefits of the organization would be an enhanced ability for the University of Iowa, Iowa State University and the University of Northern Iowa to collaborate and pool research efforts from within their respective areas of specialization, Downer said.

The IDED board of directors is expected to consider a $1 million funding proposal package at its Oct. 20 meeting to establish the technology development organization, which would be organized to be tax-exempt under Section 501(c)(3) of the Internal Revenue Code. The funding is the first allotment from a $2.7 million allocation to the Biosciences Alliance made in June by the IDED board.

“The primary thing is creating the structure itself,” said Karen Merrick, the IDED’s special projects and biosciences coordinator. “Half the money would be used for staff; half would be used to support promising scientific research, with the intent that it would meet some product need.”

Downer said representatives of the Biosciences Alliance’s six “platform” committees – each representing a different biotechnology area — said the board chosen to lead the non-profit organization should include representatives from the three Regents schools as well as private sector representation to ensure the research that’s backed is marketable.

One of the board’s first duties would be to hire a “serial entrepreneur who understands the markets and how business works” as executive director, Merrick said.

The technology development organization would work with a for-profit “venture services corporation,” which would contract with it to develop the universities’ intellectual property into commercial opportunities. That corporation would receive a combination of initial funding from the state, the university foundations and private investors, and have an ownership stake in the start-up companies.

Ted Crosbie, vice president of global plant breeding for Monsanto Co. and chair of the Biosciences Alliance, said the organization will help address the problem of Iowa technology being licensed to out-of-state companies rather than being used to spawn new companies within the state.

“The problem is that companies from out of state are coming in and taking a piece of university technology to fit in with other technology,” he said. “With this approach, the venture services corporation could go out beyond Iowa for intellectual property needed to put together a company, and use the Iowa piece with it.”

Of the 745 active commercial and option agreements that ISU had at the end of fiscal year 2005, more than a third of those were with Iowa companies, said Ken Kirkland, director of the Iowa State University Research Foundation Inc. and the Office of Intellectual Property & Technology Transfer. Whether that percentage could be significantly increased is difficult to say, he said.   “We get about 130 inventions a year coming through our doors,” Kirkland said. “Not all of those technologies are suitable for marketing. It depends on what companies are in Iowa that are available to take them. We certainly contact them, and we market very broadly. You really can’t predict if there’s going to be a company in Iowa that can take it. It really depends on the mix of the technologies coming out of the university.”

As for the size of companies that the technology development organization may work with, that too would depend on the scope of the project, Downer said.

“I see this something as where you really can’t apply a one-size-fits-all approach to it,” he said. “It will depend on the type of product that we’re looking at; the amount of time and money needed to commercialize it; whether this is a start-up or existing company that has the ability to do this, or maybe it’s something in the drug development area that needs to be licensed to a Pfizer or someone like that.”

Downer said the alliance “should be well along on getting this launched” within the next few months.

Sales of products developed from technologies licensed to companies by Iowa State University in the past 10 years total $348 million, with $116 million of that revenue generated by Iowa-based companies

Since 1995, 47 start-up companies have been launched based on technologies licensed from ISU. Thirty-five of the companies were based in Iowa.