Corporate R&D cutbacks fuel rise in licenses for University of Michigan Tech Transfer Office
As the private sector reduces spending on research-and-development, companies are increasingly relying on research universities that can afford early-stage research.
In Ann Arbor that means more outside companies are seeking to license technology from the University of Michigan.
U-M’s Technology Transfer Office is expected to report this week that it signed 97 licensing agreements with outside corporations during its 2009-2010 fiscal year, tying its all-time high and pointing to heightened awareness of the university’s willingness to spin off its technology.
“We’re very pleased,” said Ken Nisbet, executive director of the Tech Transfer Office. “When we were halfway through the year, we saw signs of hopeful recovery, but it was still a struggle.
“We never thought we would reach what we ended up doing.”
Increased interest in U-M’s technology comes as corporate R&D spending has stagnated in recent years. Many companies are piling up cash instead of spending it on early-stage research projects, making university research more attractive.
In 2008, the most recent year in which data is available, companies spent some $233.9 billion on U.S. R&D, down from $269.3 billion in 2007 and $247.7 billion in 2006, according to the National Science Foundation.
However, R&D spending at U.S. universities and colleges rose from $47.76 billion in 2006 to $49.6 billion in 2007 and $51.9 billion in 2008, according to NSF.
At U-M, which will highlight its scientists’ work at the annual Celebrate Invention event Wednesday, research spending rose 12 percent to $1.14 billion in 2009-10.
“In a tough economy, it’s hard for companies to devote the time and investment” to early-stage research, Nisbet said. “It’s not something many companies can do anyway, but in a tough economy it takes a real commitment. “
The Tech Transfer Office spun out 10 startup companies in 2009-10, up from 8 in the 2009 fiscal year but down from 13 in 2008. The figures reflect the fiscal year from July 1, 2009 to June 30, 2010.
Recent startups include Ann Arbor area companies like vehicle tracking software firm Shepherd Intelligent Systems, clean tech startup Vortex Hydro Energy, catheter device startup Tangent Medical Technologies and prostate cancer imaging device firm Histosonics.
Nisbet said he’s hopeful that the latest round of startup companies can get the funding they need to grow. But the university is also hoping that a new business incubator the Tech Transfer Office is launching at the former Pfizer site will give its startup companies a boost.
In 2009-10, the Tech Transfer took in $39.8 million in revenue from licenses and other equity deals, including $17.5 million in royalties.
The revenue figure, a record, was up from $18.3 million in 2008-09. The huge increase was attributable to a one-time royalty payment connected to the university’s decision several years ago to license the FluMist vaccine.
The revenue figures also included the late 2009 sale of HandyLab, which New Jersey-based Becton, Dickinson and Co. bought for $275 million.