How does an invention or discovery move from the lab to the marketplace?

Communicating market dynamics to researchers is just one function of university commercialization units. Its main function is translating a discovery into a marketable product or service. And that’s not always easy.

Communicating market dynamics to researchers is just one function of university commercialization units. Its main function is translating a discovery into a marketable product or service. And that’s not always easy.

Take, for example, a pharmaceutical discovery. Initial drug candidates can take 10 years, or more, to make it from the laboratory through multiple expensive stages of development to the prescription pad, but patents have a limited life of 20 years. For a pharmaceutical company, that’s a big investment proposition for a short exclusivity window. The risk is highest at the early stages of development; that’s why companies are less and less likely to license a patented discovery for development soon after the “eureka!” moment. The pharmaceutical industry in particular finds itself at an important juncture. In 2008, pharmaceutical companies spent an all-time $60 billion on research and development, yet delivered an anemic number of new medicines to the marketplace.

The private sector is becoming increasingly risk averse and turning its sights on other sources of innovation to fill product pipelines. The dilemma is that venture capital, which historically has been the lifeblood of “biotech,” is running dry. Universities on the other hand provide a renewable resource of innovation. “It would appear that universities and the private sector have divergent mandates, however it should also be recognized that they share common interests,” explains John DiMaio, of McGill’s OTT. “Among them is a desire to exploit core strengths to deliver tangible goods and services. Universities will continue to deliver knowledge. However the bar has been raised with respect to patentable inventions. There are external pressures to mitigate risk by enhancing the market readiness of inventions. This is definitely unchartered territory for universities, but there are those that have accepted the challenge in ingenious ways. It is a win-win because the licensor can command more favourable terms and the licensee assumes reduced risk.”

While turning a profit on its research is far removed from a public university’s mission, its primary mandate could be facilitated with an additional $100 million per year—which is how much a select number of U.S. universities now earn from their licensing—to reinvest in scholarly pursuits or infrastructure. But getting there is a matter of crossing what commercialization specialists call the “Valley of Death”—the journey from “Eureka!” to proof of concept. “So many great innovations come out of universities,” says DiMaio, “but there aren’t the financial resources to shepherd then along the commercialization path.”