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Macular degeneration is a disease of the human eye. When the macula deteriorates, a person has a diminished capacity to read and to otherwise perceive objects in fine detail.
An eye on the future
U hopes to commercialize research to treat macular degeneration
By Rick Moore
July 14, 2006
The University of Minnesota is going to new lengths to help assure that an important new research discovery makes it to the marketplace.
The Board of Regents on Wednesday (July 12) backed a plan that will give the University a controlling interest in a start-up company, Macular Regeneration, Inc., that hopes to treat the eye disorder macular degeneration with technology developed by professors at the U. Macular degeneration affects more than 10 million Americans and is the leading cause of blindness in people over 55.
It's a bold new step as the University tries to best capitalize on its research discoveries. Traditionally, the U commercializes its intellectual property by granting a license to an established or start-up company in exchange for future royalties. In this case, the University will be granting a license to Macular Regeneration, but will acquire a 57 percent controlling interest in the company and retain a royalty of 1.75 percent for product sales using the new technology. For its part, the University will be investing $50,000 in the company in the form of a loan.
"I've been asked, 'Are we going out on a limb?'" Mulcahy says. "My response has been, 'We're farther away from the trunk than we're accustomed to being, but we're still on solid branches.'"There are potential risks in the investment--such as the traditionally high failure rate for "spin-offs," or start-up companies--but the U hopes that its involvement with the company will make it more likely that the company finds high-quality, experienced senior managers and the capital necessary to succeed in the long run. Investing in a controlling interest in a company is a strategy that's being used by more universities, but it will be a new endeavor for the U.
"Although it's a new practice here, it's an accepted practice nationally," says Tim Mulcahy, the University's vice president for research. "I've been asked, 'Are we going out on a limb?' My response has been, 'We're farther away from the trunk than we're accustomed to being, but we're still on solid branches.'"
The investment might provide the best potential for a potentially life-changing discovery. The technology, developed by Institute of Technology professor Arthur Erdman, Medical School professor Timothy W. Olsen, and graduate student Paul Loftness, would offer a new treatment for macular degeneration. The macula focuses the human eye, and when the macula degenerates a person has a diminished ability to read and to perceive objects in detail. Preliminary studies of the use of their invention--the "Olsen/Loftness/Erdman Device"--have shown great promise. The technology is still in its early stages and no clinical trial is available at this time.
Erdman has called the discovery "the invention of a lifetime," and Mulcahy says the innovation "offers profound benefits for society."
Last year, the University of Minnesota earned about $48 million through royalties connected to the commercialization of its research, with much of that coming from the AIDS-fighting drug Ziagen. Whether or not the Olsen/Erdman Device becomes the next Ziagen remains to be seen, but members of the Board of Regents said Wednesday that they were pleased to see the University becoming more entrepreneurial.
"This is just an exciting, far-reaching activity," says Regent Peter Bell. Adds fellow Regent David Metzen: "I see a lot of neat things happening [at the University]. We are laying the foundation for some exciting things that [will be] happening in the next 10 to 15 years."