Tech Transfers Add to Maryland's Quality of Life

By Steve Charing, STAFF WRITER



Imagine an invention that could provide rapid and highly affordable testing for a wide range of human diseases and infectious agents on a single platform the size of a credit card. Imagine one that could integrate a number of time-intensive steps to analyze complex biological samples within a single assay, delivering the results in as little as two hours.

Imagine no more. Akonni Biosystems Inc., a Frederick-based molecular diagnostics company which was founded in 2003 by its current CEO Charles Daitch, has manufactured and marketed such technology. The company holds the exclusive rights to this cutting-edge development in diagnostic tools.

The discovery had been created at the Argonne National Laboratory. Through further grants, the technology was improved at Akonni, and it led to the development of TruArray and TruDiagnosis, as well as other diagnostic products.

Daitch found out about this discovery at Argonne and presented a plan to have it commercialized. Within 12 months, Akonni Biosystems obtained the necessary licenses to manufacture the product, which is marketed primarily to reference labs in government and university settings.

"As early as 2002, the founders of Akonni recognized the impact that targeted molecular diagnostic technologies would have on improving people's health and reducing the cost of health care delivery," said Daitch. "Physicians will soon have the ability to more rapidly identify and treat life threatening diseases like influenza."



From the Labs to Companies

Akonni is an example of a company that was created as a result of a technology transfer, commonly shortened to "tech transfer." It is a term used to describe the process of arranging for the commercialization of technology-based inventions or innovations originating in research universities, government or nonprofit laboratories or large corporations. This has contributed to the growth of biotech and other technology-based companies in Maryland.

The major steps in this process include the disclosure of and patenting the innovation and licensing the rights to innovations to industry for commercial development.

The business arrangements associated with tech transfer agreements can vary widely. They generally involve the company receiving the commercialization rights paying the owner of the intellectual property or IP (the inventing organization) some combination of up-front license fees, royalties (variable payments of usually 5-10% of future sales) and/or partial stock ownership in the commercializing company.

While a number of these deals go to startups, the overwhelming majority involve existing companies, according to Kristin Gray, who heads the technology transfer office at The Johns Hopkins University Applied Physics Laboratory (APL). "These existing companies already have an infrastructure in place, which is a benefit," Gray explained.

Nonetheless, there have been 18 startup deals with APL since 1999, with half of those companies located in Maryland. "To market our discoveries, we use our web site and key words to pull in companies seeking innovations or inventions," said Gray.

One such startup that was launched from an APL discovery is Silver Spring-based Applied Imagery. Founder Chris Parker formed Applied Imagery in the spring of 2004 to develop a variety of 3-D visualization software tools including the QT Viewer and Quick Terrain Modeler products. These are marketed to a broad customer base including federal and state agencies as well as engineering and surveying companies.

Besides APL, Maryland boasts a healthy number of government and university research labs which spawn inventions that potentially lead to commercialization. For example, the University of Maryland's Office of Technology Commercialization (OTC), which was formed in 1986, seeks out potential commercialization for its discoveries. OTC staff members evaluate the market to determine the best uses, industries and locations for the technology. A key component of their marketing strategy is identifying and pursuing numerous contacts with companies interested in licensing a technology by attending conferences and employing other networking opportunities.



Facilitating Tech -Transfers With Dollars

Tech transfers usually require a helping hand in the way of funding. The Maryland Technology Development Corporation (TEDCO) was created by Maryland's General Assembly in 1998 to assist in transferring the products of scientific research and development conducted by colleges and universities to the private sector.

Through its University Technology Development Fund (UTDF), TEDCO provides funding to universities to license early stage technologies more effectively. Since the program's inception in 2001, 86 research projects have been funded by UTDF with total awards of $4,347,000.

The Maryland Technology Transfer Fund (MTTF) serves as a source of technology development funding for Maryland companies that are eligible for additional TEDCO and other state financing programs. It has paid out $5.5 million to more than 90 companies, which in turn has attracted $191 million from other investors for the companies, according to James A. Poulos II, TEDCO vice president in charge of Technology Transfer and Commercialization. "Through these funds, we are pleased to have such a significant role in bringing innovations into the state's economy," he said.

Traxion Therapeutics, an incubator company at bwtech@umbc, a research and technology community at the University of Maryland, Baltimore County, received $74,000 from the MTTF this past April. The company had been formed with the assistance of ACTiVATE - a UMBC program designed to encourage technically inclined women to start tech businesses.

"Traxion is a pioneer in developing more effective medications to treat neuropathic pain and improve the lives of the people it afflicts," founder Kerrie Brady said. "We are grateful for the support of TEDCO and look forward to eventually bringing our products to market." Ten million Americans are afflicted with neuropathic pain.

TEDCO, in turn, requires universities to reimburse it a percentage of revenue received for rights to developed intellectual property, and it also receives funds from Maryland's annual budget as well as grants from 13 federal agencies, such as the National Science Foundation, NASA, the U.S. Army and the Small Business Administration.



More Investments Needed

To enhance Maryland's position in developing technology-based companies, it will require more investment from the private sector. There is a need for investors, including venture capitalists and angel investors, who are willing to take risks in early and seed-stage investments.

But it will also continue to take public commitment. In unveiling his plan in June to invest $1.1 billion over 10 years in life science initiatives, Gov. Martin O'Malley said, "We seek to take a giant step forward in harnessing all the potential that is already within our grasp." Part of the plan is dedicated to grow the Maryland Venture Fund, which directly invests in early-stage high tech companies in the state.

The additional commercialized innovations via tech transfers that could be financially helped along by public and private investments could prove to be a boon to Marylanders.