Thomas Edison famously remarked, “Invention is 1% inspiration and 99% perspiration”. The Wizard of Menlo Park was a prolific inventor who never left his lab, but his intellectual property was adopted by a plethora of companies who translated his technology into products that delighted the public. Stats from the Partners investigator community indicate more than 1000 disclosures are filed a year which yield more than 250 patents a year. About 35% of those patents eventually go under license to companies intending to develop a product protected by exclusive right to bring it to market. In most cases, the first licensee is a company at the early formation stage who wish, and often require, the participation of the inventor in the transition process and beyond. There is a continuous spectrum of options for inventor involvement that varies based on the mutual needs and desires of the founding team. The IP is the sole property of the inventor’s institution, the licensor, but any proceeds from the license are distributed, according to policy, amongst the inventors, the hospital and the inventors’ department.
Typically, an inventor who is part of a founder team will be offered a grant of common shares that reflects their contribution, beyond the IP creation, to the company through the arduous process of planning, fundraising, and formation. The quantity of shares [i.e., percent of company ownership] allocated is a matter of negotiation amongst the individuals of the founding team. Once the company begins operations, the inventor is often engaged as a consultant and member of the Scientific Advisory Board. The consulting contract is typically overseen by the institution to ensure compliance with conflict of interest policy. There may be additional founder equity granted to the inventor-founder as compensation for these consulting services in lieu of cash.
The new company will seek to recruit individuals into management with extensive industry experience who understand the protocols of drug, device, diagnostic or digital product development necessary to advance a program through the stringent FDA regulatory process. This kind of knowledge is highly specialized and generally not familiar to scientists in the academic setting and should be appreciated as comparable in importance to the success of the enterprise.
Academic institutional policy generally prohibits full-time employees from taking management positions in the company and limits consulting time to no more than one day/week. However, board of director service is permitted. In a few cases, faculty has crossed over to company employment usually because the stage of technology development is still so early as to require the research skills and knowledge of the inventor to ensure the success of the program. This is more common for post-doctoral fellows than PIs, but a recent case in point is Andrew Bellinger, MD, Ph.D., a cardiologist who helped to conceive a new technology platform for oral drug delivery with collaborators at MIT. Andrew recently joined Lyndra Therapeutics as Chief Scientific Officer and has led the effort to bring their first prototype to the clinic. He retains his BWH appointment so he can still spend a day a week with patients.
From a different context, Dr. Jonathan Thon, Ph.D., saw the potential for applying his postdoctoral research to the problem of chronic shortages in the human blood platelet supply. While working in the laboratory of Dr. Joe Italiano at BWH, he conceived a plan to develop an in vitro culture process that could be scaled up to the commercial stage. Jonathan entered the B-BIC program along with a business partner where they received additional training, coaching, and resources to create a feasibility data package and focused business plan that would attract venture investment. Jonathan transitioned out of BWH into the company, Platelet Biogenesis Inc, as Chief Executive Officer and his former PI, Dr. Italiano, serves on the Board of Directors.
Occasionally, a licensee company determines that the best way forward is via clinical trial directed by the original clinician-inventor. Our institutional conflict-of-interest rules prohibit investigators from conducting clinical research that is sponsored by companies in which they have any ownership. Under Harvard Medical School rules, exceptions can be granted according to the “rebuttable proposition” rule if it can be shown that there is no reasonable alternative – in those cases, special management measures are put in place to guard patient best interest. Similarly, investigators are not permitted to accept sponsored research from companies in which they hold equity as this can be considered private gain from publicly funded resources.
The product development pathway is a journey. It originates in the PI laboratory and at some point may cross the river of incorporation to continue on a different landscape towards the goal of market entry and actual impact on healthcare. The opportunities for inventors to participate along the way are highly situational but should be regarded as another means to fulfill both personal and professional goals. It is the mission of B-BIC to collaborate with investigators to support the creation of opportunities to transform intellectual property emerging from our research community into future products that benefit patients.
Written by Carl Berke, PhD.
Partner at the Partners Innovation Fund