CSU's The Audit

INTRO: In the 1960s, Dr. Robert Cade realized that many University of Florida football players were suffering from heat-related illnesses and severe dehydration due to the intense athletic demands combined with the Florida heat. A professor in the university’s medical school, Cade, along with a team of university researchers, developed a drink to replace the water, sodium and electrolytes they were sweating out, dubbing it Gator-ade in honor of the team’s mascot, the Gators. Word began to spread about the drink’s impact on the players’ performance on the field, and Cade eventually entered into an agreement to produce and sell Gatorade to the public. Due to its role in the invention, the University of Florida received a share of the royalties and continues to generate millions of dollars annually for the institution.

While this story is one of the best-known instances of what’s commonly referred to as “tech transfer,” it’s far from the only one. University innovations are constantly making the move from the lab to the commercial market.

At Colorado State University, those innovations range from disease resistant wheat varieties that protect our food supply to new vaccines that protect our pets. And many of them go through CSU STRATA, a research foundation that works with faculty and students to usher their inventions from the idea stage to a finished product.

Today I’m talking with Richard Magid, STRATA vice president of tech transfer, about how the organization works, the challenges ahead and what’s CSU’s “Gatorade” moment.

HOST: So let's start with just kind of a basic explainer for folks, what is tech transfer?

MAGID: In one sentence, I would say tech transfer is the process of moving innovations from the university, from the research labs, from agricultural fields, from engineering centers, into product development so that it can make an impact. There's a lot more behind that in the nuts and bolts of how we make it happen. But ultimately our goal is to find those pieces of innovation on campus that have direct potential to be a commercial product, maybe even be the foundation of a new startup company; identify them, protect them, and ultimately put them on a path to market so that that innovation gets out of Colorado State and into broad public use, whether that's public use across the state, across the nation, or around the globe.

HOST: What are CSU's biggest areas of success? What is its Gatorade?

MAGID: Right now, the biggest thing we can point to is we have an amazing wheat breeding program that is coming out with tons of different varieties that are beneficial for Colorado farmers, but really, anyone, any farmer in a state that has an environment similar to the Colorado environment. I saw a stat recently that a huge majority of the wheat grown in Colorado are varieties that were developed here at Colorado State. If you go back historically, there's also been a lot of work that's done around animal health, which is not surprising given the long-standing experts and prominence of the vet school and the animal health programs here. So people working in animal disease, animal vaccines, diagnostic tests that are focused on animal health. That's something that's been a Colorado State strength for several decades. We here at Colorado State developed the first feline leukemia vaccine. There's work going on in lymphoma, so animal cancers. And then going back further, CSU had some of the earliest veterinary diagnostic tests.

HOST: Give me a few examples of maybe some of the surprising faculty inventions that have come out of CSU.

MAGID: We're always seeing fun new things. In fact, I would say that's probably the best part of being a tech transfer professional is that we get to look at everything that's going on across the university. I've got a Ph.D. background, but I don't work in the lab anymore. I now get to sit on top of all of the hard work that the faculty, the students, the post-docs, the research staff are doing. If you look in the biomedical space, we have everything from advanced diagnostics, things that Chuck Henry is doing, looking at can you move things out of the clinic and get it into an at-home diagnostic test. We have things like Kirk McGilvray, who's working on advanced wound-healing technologies and many others.

People are working on cell therapies, anything you can think of in the biomedical space, especially if it has translational applicability so that it could be used in a vet space and it could be used in human space. There are certainly diseases and problems that only animals have, and there are diseases and problems that only humans have, but there's also a ton of overlap. The basic biology between a dog or a cat and a human has a lot of similarities, so many of our scientists are studying processes that can lead to interventions that might be useful for a companion animal, but also usable in the human space.

We recently had a great example: Chris Orton, out of clinical sciences, over a decade ago came up with the idea for a new mitral heart valve. Ultimately, he had sketched it out on the whiteboard, worked with STRATA to get patents in place. That got spun out into a startup called Tendyne through the normal startup process, which there's a lot of chaos involved in the startup process. The technology ended up being taken over by Abbott, a large medical device company, who first commercialized it in Europe.

Excitingly, it got the U.S. FDA approval earlier this year. So, we're eagerly awaiting the U.S. launch of the Tendyne Mitral Heart Valve, which really originated here with Dr. Orton at Colorado State. And that's a great example of going from the conception, not even built out a prototype, but the literal conception of an idea through a multi-year, multi-million-dollar validation process. You have to show safety and efficacy for any medical device, especially something as invasive as a heart valve. And then coming out the other end with a product that has been proven to be safe and efficacious and now will be able to go into thousands of patients a year, we hope and really provide a new treatment option for them.

HOST: And you mentioned that this is many years in the process. This takes a long time. So, this is not a quick process for sure.

MAGID: No, there definitely needs to be patience. The biomedical space probably is where you need to have the most patience. There are other technologies that are maybe more on the computer science, more on engineering, or even social innovations, where they can go from concept to product or concept to impact much faster. But even faster is probably still a matter of years, just maybe not 10-plus-years.

HOST: Well, let's talk a little bit more about STRATA's role in all of this. So where do you come in in this process?

MAGID: We come in essentially as soon as anyone within the CSU System has come up with an idea or even a potential idea. And very frequently, that does come out the formal research enterprise, but it can also come out of anyone on campus. If there's someone at the facilities department that has an idea for a better way to keep the grass mown or keep the lights on or keep buildings clean, and that involves a new technology, we're happy to support that.

We focus a lot of our efforts here in Fort Collins, but we are supporting the whole CSU System. So, we keep an office down at the CSU Spur campus, we go down to CSU Pueblo. Anyone within the System that has an innovative idea, we'd love to hear about it. And we have different support mechanisms for all these different types of innovations, but it really does start with someone, not us within STRATA, that has that great idea and is willing to work on that idea and push it forward. When we hear about it, we have a series of questions we're going to ask, but they broadly break down into four areas.

What is the idea itself and how much has been developed? So, is it the proverbial idea on the back of a napkin or has it been built out and tested, and what does that validation look like? We want to understand how we can protect it. We work mainly in the patent space, but we also work with copyrights, with trademarks, with data rights. But ultimately, we need to have some way that we can project this idea. And so that's sort of the second plank of our evaluation. The third one is trying to start to get a sense for what the market is. And we're not trying to be precise down to the dollar level, but is this an idea that is going to impact 100 people in one city, 10,000 people in a state, a million people across the country? We just need to get an order-of-magnitude assessment.

Then the fourth factor is, What does the inventor actually want to do with this? Is this someone who is a professor and has a great idea, but really would rather focus on research, teaching and service and sort of stay in the lab? Or is this someone that said, I've seen my coworkers become entrepreneurs and I'd love to take a shot at starting a company. We want to understand his or her own wishes for this technology.

I think that's one of the biggest differences between an R&D process at a big company and one at the university. At big companies, if the CEO or the vice president of research says, We're going to move forward, then everyone must fall in line. At the university, because we have a much more decentralized structure, we don't do top-down research. If someone can get a grant, they get to do that project, and we want to work with them and make sure that tech transfer is really fitting into that academic research enterprise, not trying to be top-down.

HOST: And we've had quite a few companies actually originate out of CSU.

MAGID: Yeah, we have. I think at the moment we have something like 50 companies that are live that had their origins here. Some of them you would still recognize as startups. They're small, maybe less than 10 people, and they're trying to raise money. Other companies have gone on to bigger and better things and many times that means being acquired by an even larger company. But when we inventory where our startups have gone, the last number I saw was around 50 companies that can actively trace their roots here to Colorado State.

HOST: You mentioned the proverbial idea on the napkin. Have you gotten those? Have you got napkins with sketched out ideas where people were like, What do you think?

MAGID: I don't know if I've ever seen an actual napkin but I've seen the modern version of it, which is a sketch on paper that is scanned into a PDF and maybe has a signature at the bottom because the inventor knows they need to put a name and a date on it. Again, we want to talk to someone early, we always tell them it's much better to talk to tech transfer early because that way we can help you strategically understand the space that you're working in from a commercial perspective and also reduce the chance that there's been a premature public disclosure and we lose some intellectual property rights and maybe hurt the IP position.

HOST: And you also mentioned that anyone can come to you with an idea. Do you have students coming in?

MAGID: We do. So, the big difference there is for an undergrad, if you're taking a course in computer science and you have to write an app for that course, you own that app, because you're a student, you're paying tuition. Whereas faculty are employees, post-docs are pseudo-employees, so there is a bright line between undergrads who are tuition-paying students owning their own IP and the university owning the IP for people who are employees or whose role is using university resources. But even there, there's exceptions.

So, engineering does capstone projects, senior design projects, and we will get a couple per year that engage voluntarily with STRATA. They come up with something really cool through the capstone process. Some of these are multiyear projects where one group of students starts it and then another one picks it up in year two or even year three to keep developing it and we can work on a voluntary basis with those students who, by and large, they're going to finish their degree and go get a job and be successful. Most of them are not going to keep working on that specific project. But they'd still like to see that project progress if it can progress. We do work with students on that side. We also love to bring students into the tech transfer process itself. We have student interns within CSU STRATA. We have two different opportunities for them. We work with them on the licensing and marketing side where they work to help us find companies that want to take on some of these technology projects.

And then we also have what we call entrepreneurs in training. So, they're interns that are really on our venture development side that work to help us build companies around a select number of opportunities per year. So, we can work on student IP, or we can work with the students themselves within the tech transfer office. That's actually how I got my start in tech transfer. I was an intern at the University of Pennsylvania. Freshly minted Ph.D. in biomedical engineering trying to figure out what did I want to do with myself. I had this great degree and this great education but still wasn't sure exactly where I wanted to go and interned at their office and enjoyed being at the intersection of research and business. I found that I had the ability to communicate with both sides. I could translate between the two worlds, and that was really my start in what's now been a 20-year tech transfer career.

HOST: Why is this such an important stepping stone for CSU and for faculty and for inventors here?

MAGID: We are not the only way that a researcher can make an impact, and we would never say that. There's a ton of amazing science and engineering that is developed here, and the way it makes an impact is training the next generation of scientists and engineers. Working with students, whether they're undergrad or grad students, or it's published in open literature, that builds the knowledge base for other people to build on. That is always going to be the core mission of the university.

But another way to make impact is the tech transfer way, which is saying that this particular technology can be directly translated into a new product. And I think that many faculty want to make as big an impact as they can. They're passionate about whatever area they're working in, whether it's communication, whether it's engineering, whether it is animal health, they're passionate about that area and they want to make an impact. And if they or their lab develops something that can go out directly into the marketplace, that's another pathway for making an impact. I think it's really compatible with CSU's land-grant history and our ethos because that's all about applied research and development. And what we're doing is helping to apply that research and development into commercial products.

HOST: How many inventions has STRATA ushered through the process over the years?

MAGID: Definitely thousands. CSU STRATA today — CSU Research Foundation for many years before that — has actually been around for 70 years in different forms. It wasn't always a modern tech transfer process. But I would say the last 25 to 30 years, tech transfer has been a modern part of the academic research university. And we've averaged 100 plus inventions per year over 20, 25 years. They're not all active today, of course. Some of them naturally fall out. Some of them are successful, but go through their life cycle. Our portfolio right now is about 800 active inventions that are in different stages of the process. Some of them came in last week and we're just doing our very first evaluation to understand what we have. Some of them are on the market and producing revenues and everything in between.

HOST: Can we talk about what this means financially for CSU?

MAGID: Sure. So, our revenues, and we do share some of them publicly even if we don't get into how much each company is paying us levels, have been $3 to $4 million in total revenue generated out of tech transfer over the past few years. About 70% of that revenue gets recycled back into CSU and the CSU inventors. CSU has an intellectual property policy. Under that, the inventors get 35% of those revenue proceeds. And that's whether or not they stay here. So yes, we hope that the faculty stay here and get tenured and move up the academic ranks, but equally we hope those students get jobs and go out into the world. But if they develop something as a masters of engineering student, they're gonna earn a royalty share as long as we're supporting that project within STRATA.

Then another 35% goes back to the campus, basically the Office of the Vice President for Research, the colleges, the departments, in some cases, individual programs. And so it really is feeding back into the research enterprise. The wheat program we talked about is a great example. Their success with, for instance, CoAXium is a very successful variety of wheat. The CoAXium royalties are going back into the wheat breeding program to hopefully further develop CoAXium-2 and CoAXium-3 so that it's not just a one-time hit, but really is a sustainable program that can keep producing these important innovations for decades to come.

HOST: Tell me about some of the challenges that you're facing right now.

MAGID: There's a couple of different levels. Certainly, we rely on venture capital and risk capital to fund these startups. And venture capital always goes through boom and bust cycles. I would say right now, outside of a couple areas like artificial intelligence, it's not the strongest fundraising environment. If you're a biotech company or med-device company, you're probably struggling a little bit more. So that's one of the challenges.

I think just, in general maybe tech transfer hasn't done as good a job as a community explaining how we're following through on this public funding and turning it back into products that benefit the public. So, there is maybe a retrenchment around, Why are we giving such research dollars to universities, public and private universities, although I think some of the privates have been a little more in the crosshairs. And people see some big numbers, right? So a billion dollars a year is going to Harvard. Why are we giving Harvard a billion dollars? And I don't work at Harvard; I can't speak to the specifics of what's going on there. But I've worked here at CSU. I've work at the University of Tennessee. All of those research dollars are not "given" to the university. They're competed for intensely. The professors are writing grants. The top 10 or 15% of grants are getting funded and they're competing against everyone else, and they're winning because they're uniquely situated to do research at CSU. That's going to fall into certain areas that area of expertise. At other places, that's gonna be different areas of expertise.

But I worry about if this entire research infrastructure that we've built up, the higher education research infrastructure, becomes less productive, then that also means tech transfer is going to have fewer new technologies, fewer new innovations to work on to turn into the next generation of products. And whether that's biomedical, whether that is sustainable energy, whether it's materials science — I don't know where the next big breakthrough out of CSU is going to be but we're talking to people in all of those areas and more every week. So, I do worry about any breakdown in this world-leading research infrastructure that we've built up.

HOST: Well, thank you so much for talking with me today.

MAGID: You're welcome. I've enjoyed it.

OUTRO: That was STRATA VP of Tech Transfer, Richard Magid, talking about innovations at CSU. I'm your host, Stacy Nick, and you're listening to CSU's The Audit.