2014/1/23

1

Intellectual Property and Academic-

Industrial Collaboration

J. Denry Sato, D.Phil

Visiting Professor of Industry-Academia-

Government Collaboration

Hiroshima University

Government funding for education is decreasing

Private funding for education is unpredictable

Funding Problem for Educational Institutions

Partial Solution

Patent and monetize intellectual property

2014/1/23

2

Criteria for Patentability

The invention must be novel

It must be non-obvious to one practiced in the art

It must be useful

Information must be proprietary (non-public)

Functions of Patents

Patents protect intellectual property for a set period of time

Europe: 20 years from the application date

United States: 17 years from award date

2014/1/23

3

How to Monetize Intellectual Property?

Start a company to produce and sell invention

Pro: Complete ownership

Con: High start up costs, production expenses, and liability

Collaborate with an industrial partner

License out intellectual property for royalties

Pro: Low initial costs, and low risk

Con: Reduced income

Form a partnership

Pro: Higher income

Con: Some costs and some risks

Case Study 1: Cancer Drug Development

Drug: Erbitux, a monoclonal antibody to a growth factor receptor

Use: To treat advanced colon cancer & head and neck cancers

Pathway: Licensed intellectual property rights to a biotech company

2014/1/23

4

Drug Development

The U.S. FDA approves only 20-30 new drugs each year

Drug development takes 10 -15 years at an estimated cost of

500 to 800 million dollars

Most drug candidates fail in clinical trials

Approximately 1% entering Phase I safety trials survive

Less than 50% survive Phase III efficacy trials

Sato lab, UC San Diego, 1981

Gordon Sato, PhD

John Mendelsohn, MD

2014/1/23

5

Hypothesis (G.H. Sato)

Monoclonal antibodies that blocked binding of required growth factors to their receptors would induce cancer cells to die instead of becoming quiescent.

Strategy

Raise mABs to cells over-expressing receptors, and screen for antibodies that completely blocked ligand binding.

Distinctions from other experimental approaches

Deliberate selection of neutralizing antibodies

Target antigens were not tumor-specific

Antibodies would not be armed with isotopes or toxins

Hypothesis and Strategy

Rationale for Neutralizing EGFR

Monoclonal Antibodies

2014/1/23

6

EGF Receptor Structure

Over-expressed by A431 epidermoid carcinoma cells

Purified EGF was commercially available

EGFR expressed by 50-70% of cancers

I II III IV

Tumor Growth Inhibition In Vivo

A431 tumors in nude mice

A. A431 cells and mABs given

concurrently

B. A431 cells and mAB given

sequentially

2014/1/23

7

Summary of EGF Receptor Antibody Results

Four monoclonal antibodies to human EGF receptors

(528, 225, 579, 455)

Three antibodies blocked EGF binding (528, 225, 579)

Three antibodies inhibited A431 growth and EGF-stimulated

fibroblast in vitro (528, 225, 579)

All four antibodies inhibited A431 tumor growth in nude mice

Proof of principle experiments showing that unmodified neutralizing

monoclonal antibodies to growth factor receptors were potential

cancer therapeutics.

1990: U.S. patent awarded

1993: Intellectual property licensed

by Imclone Systems

2014/1/23

8

Refractory colon cancer prior

to treatment with C225

Rubin, et al., ASCO 2000

Partial response to C225 and

Irinotecan after 5 months

Erbitux (C225) Phase II Clinical Trial for Refractory ColonCancer

L. Saltz, et al./ASCO 2001121 Patients

Treatment Response Rate

C225 + irinotecan 22.5%

C225 alone* 10.9%

*L. Saltz, et al. (2002) 57 Patiients

Bristol-Myers Squibb agreed to buy 20% of IMCL for $2 Billion

2014/1/23

9

Erbitux (C225) Phase III Clinical Trial for Refractory Colon Cancer

D. Cunningham, et al./ASCO 2003329 Patients

Treatment Response Rate TTP Median Survival

C225 + irinotecan 22.9% (p<0.007) 4.1 months 8.6 months

C225 alone 10.8% 1.5 months 6.9 months

Clinical trial funded by Merck KGaA

Applications for approval in Europe and the US was filed in 2003

Erbitux approved for refractory colon cancer in Switzerland (11/03)

and in the US (02/04), and for head and neck cancers (2006)

Approved in ~80 countries including Japan.

2014/1/23

10

Approved and Pending Indications for Erbitux

Advanced colorectal cancer (approved 2004)

Advanced head and neck cancer (approved 2006)

First line colorectal cancer (CRYSTAL PhIII, 2008)

59% RR v 43% for FOLFIRI only (p=0.0025; 540 pts)

Non-small cell lung cancer (FLEX PhIII, 2008)

Significant increase in survival: 11.3 v. 10.1 mo. for

cisplatin only (p=0.04; 1,100 pts)

Timeline for Drug Development

Antibody generation and characterization: 1981-83

Patent application submitted: 1984

Patent application approved: 1990

Intellectual property licensed: 1993

Clinical trials: 1989-2003

FDA approval: 2004 Total time: 23 years

2014/1/23

11

Costs and Income

Costs (total) UC San Diego: research and development $450,000

patent application 20,000

patent maintenance fees 36,000

$506,000

Imclone and partners: clinical trials & production $800,000,000

Income (per annum) UC San Diego: ~ $7,000,000

Imclone and partners: ~ $1,000,000,000

In 2008 Eli Lilly bought Imclone Systems for $6.5 billion

Case Study 2: Biotech Start Up Company

Goal: To raise money to support research a non-profit research institute

(W. Alton Jones Cell Science Center) started a for profit biological

reagents company (Upstate Biotechnology)

Products for research: Cell culture media, media components and

supplements, antibodies

Approach: License products from academic labs with in-house

production and quality control (royalties paid to investigators and

Institutions)

Target market: Biological research labs

2014/1/23

12

Requirements

Start up funding: $1 million borrowed from Cell Center

Facility: Rented space then custom renovated building

Employees: From 2 to ~50 employees in 10 years

Milestones

1st year: two products, two employees and $10,000 in sales

5th year: 10 employees, $1 million sales, profitable

10th year: 30 employees, $10 million sales

20th year: 50 employees, $40 million sales

In 2005 UBI was sold to Seralogicals, Inc. for $215 million

2014/1/23

13

Collaborative Benefits to Labs (Sato Lab)

UBI royalties: 5% of sales to both lab and institution

Non-exclusive licenses for research applications

3 products: 2 antibodies and 1 growth factor

Licenses generated ~$20,000/yr in royalties to lab

Summary

Inventions and products developed in basic research labs

are potential sources of income to labs and universities

The monetization of this intellectual property requires

patent protection

Scientists must be aware of the commercial value of their

discoveries, and universities must be aggressive in filing

patent applications

There are many ways to commercialize discoveries

(licensing for royalties, partnering, self-development) with

different costs and liabilities

2014/1/23

14

Thank you for your attention!