T H E   N I H    C A T A L Y S T     M A Y  –  J U N E   2005



by Fran Pollner

Mark Rohrbaugh

"The conflict-of-interest issue certainly should not decrease the number of formal collaborations between NIH scientists and industry. The new policy in no way limits such activities as part of one’s official duties. Scientists are encouraged to establish such links, select CRADA partners based on their knowledge and working relationships with them. . . . Licensing is another story. The scientists are not involved. They can’t make requests on behalf of a company. We keep a wall between them and the financial terms of a license related to what they’re doing in the lab."

There is a firewall between NIH scientists and the financial end of NIH tech transfer, says the director of the NIH Office of Technology Transfer.

In all matters scientific, however, OTT Director Mark Rohrbaugh emphasizes, NIH researchers are the heart of tech transfer—from the point of discovery through the successful introduction of a new therapy into clinical practice.

There’s a growing awareness among NIH researchers of the mission of OTT, which is to disseminate to the world at large the discoveries made in NIH labs. These include research tools for the greater research community and vaccines, drugs, devices, and techniques with clinical application for the bedside, wherever they are needed.

The tools of tech transfer in NIH’s repertoire include CRADAs (cooperative research and development agreements) and material transfer agreements, managed at the institute/center level, and—managed by OTT—patenting of NIH inventions and licensing them to commercial entities that can bring them to market in the United States and/or abroad.

Not all new "art" needs or warrants patenting, observes OTT Deputy Director Bonny Harbinger, but a patent secures intellectual property rights for NIH, may generate royalties, and becomes a tool for securing favorable terms in licensing negotiations—terms typically aimed at maximizing access to an invention that meets a public health need.

Bonny Harbinger

"We have one of the largest tech transfer programs, and we are inundated with requests for training. We now have visitors from Ireland and China—for six months of training, and two groups are coming from India and Hungary. This [interaction] provides us with contacts in these countries to help us place licenses and gives us the opportunity to teach others the way we think tech transfer should be conducted to provide the greatest public health benefit—which is critical to us."

It Takes a Scientist

The road to a patent, Harbinger emphasizes, begins with an NIH researcher’s recognizing that he or she has come up with something unique and useful—and, consequently, filing an "employee invention report," or EIR, with the institute’s technology development coordinator. If a researcher doesn’t know whether an EIR is warranted, the coordinator or OTT is always on hand to offer advice.

There were more than 400 EIRs submitted to OTT in 2004, compared with 268 in 1997; OTT sought patents for 199 of these. It’s helpful, Harbinger notes, if researchers file their invention reports several months before they anticipate public disclosure of the research—to allow time for OTT and the ICs to review the invention report and OTT’s contract law firms to apply for a patent should that be desirable.

Many NIH inventions, says Steve Ferguson, director of the OTT Division of Technology Development and Transfer, emerge from career scientists looking at basic mechanisms—"when suddenly there’s a breakthrough observation—often when something has gone terribly wrong."

That "darkest before the dawn" insight has been described by NIH inventors who have participated in the Research Festival "Eureka!" minisymposium, organized by Ferguson as a way to recognize the genius of NIH scientist-inventors.

The Eureka! session, says Brian Stanton, the new director of the OTT Division of Policy, also highlights the "fundamental value of scientists in the lab just playing around, so to speak." This freedom is unique to NIH, Stanton says, and—something Congress may not realize—it’s essential to the success of the NIH tech transfer program.

In interviews with The NIH Catalyst, Rohrbaugh, Harbinger, Ferguson, and Stanton discussed what they characterized as the very healthy state of NIH tech transfer. The OTT has undergone reorganization and expansion, has become a training ground for scientists interested in tech transfer, hosts visiting scientists from around the world, and is involved in international groups that formulate global tech transfer policies.

The office set a record last year in the licensing arena, concluding 276 licenses—one for each business day, Ferguson noted—including 32 new and amended licenses with foreign countries.

Steve Ferguson

"At NIH, very often competing treatments for the same disease are being funded or researched. It’s a mutual fund philosophy: You may not know which approach will work, but you know that something will. And whatever works, the public benefits. Here’s an example: NIH was involved in the development of a drug for AIDS-related cytomegalovirus; it was the first of its class—an antisense drug for CMV. And we were also involved in the development of anti-HIV cocktails that have preempted CMV eye infections. So we have a novel wonder drug that makes no money for the company or for NIH. Overall, it’s a success story because we are a public health agency, but that may not be so for the company that did the clinical trials—they got proof of principle, but not return on investment."

The International Arena

Part of the OTT emphasis on licensing, says Rohrbaugh, is to facilitate access in developing countries to NIH technologies that meet public health needs. "One person now works full time in that area, developing ties and identifying institutions—companies, government entities—interested in and capable of bringing needed products to market," he said, referring to the new position of senior advisor for international tech transfer, filled by Luis Salicrup.

Licensing and discussions in developing countries were particularly successful last year, he said, and aimed at facilitating the production at lower cost of needed drugs and vaccines, especially for infectious and tropical diseases—rotavirus, dengue, malaria, tuberculosis, HIV, and meningitis—as well as cancer and diabetes.

Once OTT negotiates a license with a company that will move an NIH invention out of the lab, the NIH inventors can be involved in the continuing development of the product and are encouraged to discuss scientific questions about the technology as part of their official duties. They can advise a prospective licensee on such matters as how best to grow cells, interpret data, or design a clinical trial. They cannot advise on such matters as royalties or other financial terms of the licensing agreemen—or advocate on behalf of a particular company.

Brian Stanton

"How does NIH define a return on investment, a tech transfer success? Is it in dollars? In the number of licenses negotiated? Or is it in benefit to the public health? OTT has many customers: there’s the public at large, our scientists, the institutes, and the companies that are our partners. There are ways to preserve commercialization of a product with an exclusive license—and still break down the component parts of the technology to be licensed. We can negotiate separate agreements with the company so that researchers still have easy access to the antibodies, the reagents, the pieces of DNA, while the company has exclusive rights to market the downstream product."

Balancing Acts

Many interests must be balanced in the process of licensing, Ferguson noted. "Being a catalyst for research is an NIH mission, and we have to be careful that licensing doesn’t get in the way of that," he said. Some of the language in negotiated agreements stipulates that NIH and others will retain the rights to do research related to the license.

If a company balks, that can become a point of negotiation, he said, with NIH perhaps compromising with terms more favorable to the company in exchange for broader dissemination of the technology. In such a case, the financial goal takes a back seat to the goal of advancing research.

Deciding to place as much as possible of the Human Genome Project into the public domain is an example of putting public interest first, Stanton said. "This was a conscious choice not to patent and to license nonexclusively.

But OTT also has an obligation to NIH scientists and institutes, Stanton noted.

"There is an expectation that we will receive a reasonable return for technologies we license," he said. "We want to give something back to our inventors—and to the institutes so they can do additional research."

Returns of the Days and Decades

There is no question that NIH inventions generate income. The payments to NIH negotiated in exchange for licensing rights have been increasing year by year as the portfolio swells with new inventions and continuing returns on old ones.

At a meeting of the Scientific Directors in February, Rohrbaugh reported that there were about 2,300 issued or pending patents and 1,650 active licenses that in 2004 generated over $56 million in royalties, $9 million of which went to the inventors.

At NIH, the royalties are apportioned such that the first $2,000 in royalties is shared among the inventors; above that up to $50,000, 15 percent goes to the inventors and the rest to their institutes; above $50,000, 25 percent goes to the inventors and 75 percent to the institutes. An inventor can receive up to $150,000 a year, every year. "And wherever the inventor may be, we send out the royalties—and beyond that, the royalties will go to his or her estate," Harbinger noted. Last year, Rohrbaugh added, about 400 former and current NIH researchers were paid royalties.

Many of the inventions that generated the most in royalties in 2004 have been around for more than a decade (see "top 20" list below).

Rohrbaugh noted that nowadays, among inventions likely to interest prospective corporate partners are those that combine technologies, such as the cardiovascular stent that releases a known anticancer drug that interferes with cell proliferation, thereby reducing the incidence of restenosis after coronary angioplasty. This invention was one of three new OTT-licensed technologies that gained FDA approval in 2004 and was also one of the 20 that generated the most royalty income for NIH in 2004 (see "top 20" and "2004 approvals" below).

"Personalized medicine, such as cancer therapies and diagnostic techniques—tailored to the susceptibility of your cancer—is another growing area of interest," Harbinger added. "Instead of throwing spaghetti on the wall and seeing what sticks, you determine in advance what will stick," she said.

Since April 2005, OTT has listed as available for licensing more than 40 new technologies.


Some Stats for FY 2004
(covering NIH and FDA)

Invention Disclosure Reports 403
New U.S. Patent Applications Filed 199
Issued Patents 122
Executed Licenses 276
Royalties (in millions) $56.3
Executed CRADAs (NIH only) 87


OTT-Licensed Products Approved by FDA in FY 2004


Between 1991 and 2004, FDA approved 23 products based on technologies developed in the NIH Intramural Research Program. The three 2004 newcomers were:

Paclitaxel-eluting coronary stent system to inhibit restenosis after coronary angioplasty (James Kinsella et al., NIA)

Generic form of didanosine (ddI) delayed-release capsules in the treatment of HIV infection (Hiroaki Mitsuya et al., NCI)

Recombinant human keratinocyte growth factor protein, the first and only therapy for the severe mouth sores accompanying myelotoxic therapy for hematologic cancer (Jeffrey Rubin et al., NCI)


Top 20 Inventions in Royalties, 2004

(year refers to FDA approval or date of introduction)

Vaccines and Therapeutics

Monoclonal antibody to treat respiratory syncytial virus–the first MoAB licensed by the FDA to treat any infectious disease (1998, Brian Murphy et al., NIAID)

Didanosine (ddI), reverse transcriptase inhibitor that interferes with HIV replication (1991, Hiroaki Mitsuya et al., NCI)

Paclitaxel as a cancer treatment (1992, Wyndham Wilson et al., NCI)

Proteosome inhibitor to treat multiple myeloma–the first of its class approved by FDA (2003, Shanker Gupta, NCI)

Synthetic thyrotropin as adjuvant in thyroid cancer (1998, Fredric Wondisford et al., NIDDK)

Nutritional supplement to treat macular degeneration (2003, Rick Ferris et al., NEI)

Hepatitis A vaccine (strain HM-175) (1995, Richard Daemer et al. and Ann Funkhouser et al., NIAID)

Radioimmunotherapy for non-Hodgkins lymphoma–the first such product approved by the FDA (2002, Otto Gansow, NCI)

Dideoxycytidine (ddC), reverse transcriptase inhibitor that interferes with HIV replication (1992, Hiroaki Mitsuya et al., NCI)


Serological detection of antibodies to HIV-1 (1985, Robert Gallo et al., NCI; Luc Montagnier et al., Pasteur Institute)

DNA probe for breast cancer diagnosis (2001, Charles Richter King et al., NCI)

Genotyping of HIV protease gene (1996, Stephen Oroszlan et al., NCI)

Serological detection of antibodies to HTLV-1 (1985, Takis Papas et al., NCI)

Instrumentation and Devices

Paclitaxel-eluting coronary stent system to inhibit restenosis after coronary angioplasty (2004, James Kinsella et al., NIA)

Enhanced magnetic resonance imaging through magnetization transfer (1998, Robert Balaban et al., NHLBI)

Laser capture microdissection (1997, Lance Liotta et al., NCI)

Research Materials

Reconstituted basement membrane (1993, Hynda Kleinman et al., NIDCR)

Recombinant cytochrome P-450 (1993, Harry Gelboin et al., NCI)

Transforming growth factor-b (2002, Michael Sporn et al., NCI)

Anthrax protective antigen (2002, Stephen Leppla, NIDCR)



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