Northwestern patents, licensing profits down over 90 percent after sale of Lyrica royalties

Drew Gerber, Assistant Campus Editor

Northwestern saw only $32 million in profits from its patents and licensing agreements this year, down from $357 million last year, according to a 2015 report from the NU Innovations and New Ventures Office.

In 2014, the University sold its remaining royalty interests in the fibromyalgia drug Lyrica, which largely contributed to the profits earned last year. The patent for Lyrica is set to expire next year.

Pregabalin, the chemical name for Lyrica, was developed by NU chemistry Prof. Richard Silverman nearly 25 years ago. Ultimately licensed to pharmaceutical company Pfizer, the world’s second-largest drug and biotech company, the probability of having a success like Lyrica is like winning the lottery, said Alicia Loffler, executive director of INVO.

NU sold off the initial portion of its royalty interests in Lyrica at the end of 2007 for $700 million, which has helped the University remain one of the top-ranked universities in terms of profits from patents and licensing for the past seven years, Loffler said.

Generally producing 211 inventions and roughly 12 startups a year, the University’s mission is to move its research to the public and to the market as part of its responsibility to contribute to economic growth, Loffler said. Additionally, because the University receives roughly $620 million in sponsored research, a large portion of which comes in the form of research grants from various federal agencies, there is an obligation “to make every effort to convert that research into products that will help humanity,” she said.

Loffler said the number of inventions produced each year by NU has been growing, with Weinberg College of Arts and Sciences, the Feinberg School of Medicine and the McCormick School of Engineering producing the largest number of inventions and innovations. The inventions, mostly medical and biomedical, usually stem from federally funded research and reflect the ratio — 7 to 1 medical and biomedical to other — of federal investment into those fields.

However, Loffler said the best inventions come from the intersection of many disciplines. Narrative Science, a company that uses software to transform data into readable news, originated as a collaboration between students in the Medill School of Journalism, Media, Integrated Marketing Communications and the department of computer science in McCormick. Using an artificial intelligence platform called Quill, Narrative Science generates stories it says are “indistinguishable” from those written by humans.

INVO works to nurture a culture of innovation and create structures to support entrepreneurship through educational programs like residencies for entrepreneurs, fellowships and internships for students, Loffler said. She said Chicago lacks the vibrant ecosystem for innovation that universities like the Massachusetts Institute of Technology and Stanford University have because of their locations and access to venture capital.

“In places like MIT and Stanford, because they live in such a vibrant ecosystem, their office is very transactional,” Loffler said. “They have a much longer history than we do… so the office doesn’t do any outreach or any education. … They don’t do many collaborations with the community.”

The Garage, a new NU startup incubator that launched in June, aims to help students develop their ideas and transform them into startup companies. Loffler told The Daily in September that The Garage is a place for students from across the University to come and collaborate.

In terms of investment, the general rule of thumb is that it takes $1 billion of research funding to get one company or product that will secure more than $100 million in revenue, Loffler said. Given this, the best that can be done is to increase this probability of success by creating the supporting infrastructure, she said.

Loffler said INVO’s strategy is already showing some success, with Naurex, an antidepressant company, being purchased by pharmaceutical giant Allergan in July for an initial $560 million. Joseph Moskal, Naurex founder and McCormick professor, believes the drugs Naurex produces offer something new.

“We are in a new space entirely,” Moskal told The Daily at the beginning of October. “This isn’t your grandma’s antidepressant. This is a new class of compounds that work by a new mechanism. And that mechanism is just beginning to be explored.”

Although INVO is happy with the sale of Naurex, the real revenues will come when the drug hits the market — potentially within three years — though the drug has yet to go through clinical trials, Loffler said.

“A lot has been happening in the past five years and it has been driven by students and faculty,” she said. “It has been a great ride.”

A previous version of this story misidentified which school the department of computer science is in. The department of electrical engineering and computer science is in McCormick. The Daily regrets the error.

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