Harvard woos firms to fund research

With government research funding slowing and its scientific ambitions on the rise, Harvard University has launched a drive to commercialize more of its inventions and attract additional research money from private companies.

It recently created a high-ranking new post to oversee the effort and plans to establish a $10 million fund aimed at moving inventions from the laboratory to the marketplace. Harvard is also talking to local companies about investing more in the university's science research.

American universities' tightening ties to corporations have come under increasing scrutiny in the past several years. Critics say such arrangements can create conflicts of interest for professors and steer priorities away from important basic science and toward projects with commercial potential.

Despite a global reputation and $26 billion endowment, Harvard has long languished in the second tier of American research universities when it comes to alliances with private industry. It collected $10 million in research funding from private corporations in fiscal year 2004, compared to $60 million by the Massachusetts Institute of Technology. In 2003, the last year national rankings were compiled, Harvard's income from patenting and licensing professors' inventions ranked behind not only MIT, but also Wake Forest University, Florida State University, and the University of Massachusetts.

''Harvard, if you go way back, was quite ambivalent about whether they should be doing this kind of stuff -- soiling the ivory tower with the grubby fingerprints of industry," said Lita Nelson, the longtime director of technology licensing at MIT.

The change at Harvard is driven in part by president Lawrence Summers's push to forge closer ties with businesses and plant the school firmly in the center of the Boston area's biotechnology cluster of universities, drug companies, and research hospitals.

One way Harvard plans to boost its collaboration with private industry is by soliciting more corporate money for ''sponsored research," in which a company pays for work done in a university lab, often in exchange for potentially lucrative first rights to license resulting discoveries. The school is also expanding its efforts to patent inventions by Harvard scientists and license them to for-profit companies, a practice known as technology transfer.

''I want people to say five years from now, even three years from now, that Harvard has the most effective technology-transfer program in the country," said Isaac Kohlberg, Harvard's new chief of technology development.

Before coming to Cambridge in May, Kohlberg worked at Tel Aviv University in Israel, where he founded a for-profit venture to commercialize researchers' patents. In the 1990s, he helped New York University build one of the most profitable patent-licensing offices in America. In his final year at NYU, Kohlberg made headlines for his annual pay -- almost $1.3 million, the highest of any university administrator in America. He said the figure was inflated by a retention bonus and severance package. Harvard would not disclose Kohlberg's salary, but he said it is considerably less than that figure.

Leaders in the field say he arrives at a difficult time for technology licensing. Although universities have become increasingly aggressive about patenting their researchers' inventions, the number of actual deals struck is dropping, as companies and investors lose interest in risky early-stage technology.

Since the 1980 Bayh-Dole Act formally allowed institutions to profit from technology discovered using federal research money, universities have rushed to patent and license inventions that come out of their labs. Many are obscure research processes, but some have a high profile and moneymaking potential. The University of Wisconsin, for example, patented techniques to create embryonic stem cells, and MIT owns several key patents on digital television.

Critics have said the law amounts to a taxpayer handout to universities that have already reaped the benefit of federal research grants, and can draw professors away from important but unmarketable basic research.

But supporters believe it gives schools a much-needed incentive to turn research into products that benefit society.

''Our mission is a public mission," said Kohlberg. ''Everything I do has to be driven from a place of social responsibility and social consciousness."

Technology transfer can also offer huge payouts to schools. Seven years ago, Stanford University, which holds the patent on the page-ranking technology that powers the Google search engine, accepted shares of Google stock as part of its licensing deal with the young company. This year Stanford cashed out for $336 million, according to the university's licensing director.

More typically, income is from royalties on devices, drugs, or scientific techniques, with top schools earning upward of $40 million a year. In 2004, Harvard reported gross licensing revenue of $23.7 million and said four new companies were launched using its technology. That compares with $38.3 million in licensing revenue and 20 companies at MIT.

As part of its reorganization, Harvard put its licensing operation under the authority of provost Steven Hyman, who oversees academic plans that cross the boundaries of Harvard's numerous schools. Hyman said the push for researchers to think about commercializing their work marks a cultural change for a university where scientists have long focused more on basic science.

''Our mission demands that beyond writing scientific papers, that technologies ultimately be commercialized so they can make a difference for people," said Hyman, a neurobiologist and former director of the National Institute of Mental Health.

Kohlberg has hired eight employees, including a former venture capitalist and the top lawyer from his technology licensing firm in Israel. He has renamed the school's technology licensing officers ''directors of business development" and charged them with attracting more industry money.

''This has become crucial, because if you look at the [National Institutes of Health] budget, other government budgets, they're flattening," Kohlberg said.

For example, he said Harvard recently closed a ''major" deal with a local biopharmaceutical company. Although he would not name the company, Kohlberg said research goals will be determined by professors, not companies, and the scientists will retain the right to publish all their discoveries.

Kohlberg said he wants his staff to scout the halls of Harvard's research buildings for scientists whose work might be patented. He said his first goal is to boost the number of inventions that Harvard's scientists report to his office, and he keeps an espresso maker near his desk to encourage scientists to drop by for informal conversations about their work.

To help move the university's patents from the laboratory to commercial potential, Kohlberg hopes to launch early next year a $10 million ''accelerator fund" which will invest philanthropic money for six to eight new ideas annually. The intent is to nurture fledgling technology to the point where it can be licensed and developed by outside companies.

''We're starting it as an experiment," he said. ''And if it succeeds, and I hope it will, then we'll expand it significantly."

The fund will be administered by an independent committee of venture capitalists and businesspeople. The university does not plan to profit from the fund, Kohlberg said. Although he does not have commitments from donors, he said the prospect of ''making donations with an impact" will attract their money.

Stephen Heuser can be reached at sheuser@globe.com.