Since I’ve mentioned a recent book on academic drug discovery, I also wanted to highlight this article at Nature Biotechnology on university tech transfer offices (TTOs). The authors, mostly from a list of high-profile research universities (Oxford, Stanford, UCSF, University College London, Harvard et al.) and part of the Oxbridge Biotech Roundtable, have a lot of good advice for academic entrepreneurs who are going to have negotiate a pretty complex landscape.
First-time academic bioentrepreneurs frequently confront a deal-making process they do not completely understand, in part because final deal terms are often held confidential, making it difficult for outside observers to understand fair market terms. At the same time, bioentrepreneurs sometimes do not fully recognize how the interests of the TTO and university may diverge from their own. In fact, one postdoc we spoke to said, “Knowing what I know now about my university’s licensing process, I might have considered a different university for my postdoc.”
TTOs arguably benefit from information asymmetries in negotiations, whereas experienced bioentrepreneurs fear that disclosing details of prior deals could jeopardize their ongoing relationship with their TTO. Thus, they often stay silent on just how they got their asset outside the university walls.
Inexperienced faculty members, heading into lengthy negotiations in legal areas that they may not understand well, are certainly at a disadvantage. And what this article makes clear is that it’s not just the slick operators from the biopharma business world that need to be watched out for, it’s also the slick operators at the university itself. The interests of the institution and the interests of the inventor may well diverge, which is a particularly interesting situation when the inventor is an employee of said institution.
The article notes a number of differences between the US and the UK in these matters, a big one being the UK universities seem to expect a much larger equity stake in any spinout companies, but some fundamental advice is the same. Recognize everyone’s own interests in the negotiations, and adjust your thinking accordingly. Get yourself the best and most experienced legal counsel you can find to look over the proposed IP and business arrangements. Remember that almost everything is negotiable, and a lot of it is renegotiable (but also remember that this means that you’re going to have to flexible on some issues yourself). And get ready for everything to take longer and cost more money than you were prepared for at the start – it’s worse than renovating a kitchen.
Update: see the comments section – the university equity numbers in this article are being disputed there.
Update #2: the authors are apparently working on correcting this issue, with new tables forthcoming.