UW’s Gardasil Connection Generates Windfall for Research, Tech Transfer

2/23/09Follow @xconomy

One of the world’s best-selling vaccines, Merck’s Gardasil, is quietly producing some serious money for an unexpected beneficiary—the University of Washington.

Thanks to some hard-fought patent litigation from the 1990s that ended up strengthening and extending the lifespan of a critical piece of UW intellectual property, the university is now raking in a windfall of royalties on Merck’s cervical cancer vaccine. This product’s success has been a driving force that has caused the licensing income UW gets from the Washington Research Foundation to more than triple in the past three years, to $38 million in 2008 from $12 million in 2006.

I learned about this story from Ron Howell, the CEO of the Washington Research Foundation, the Seattle-based organization that manages some critical UW intellectual property from the 1980s. While $40 million a year might sound trivial to an institution that has a $1 billion-a-year research enterprise, it is actually a critical resource to the UW because the cash doesn’t come with a lot of strings attached, and can be used for things like recruiting and retaining star faculty, supporting entrepreneur-in-residence programs to commercialize university inventions, and purchasing state-of-the-art equipment, Howell says. It’s all been a boon to Linden Rhoads and her team at UW TechTransfer, who are on a mission to make UW better at spinning off innovations into the business world.

“What it means is that we’re going to be able to support more scholarship and research,” Howell says. The WRF particularly wants to aim its gifts toward faculty that are approaching “tipping points” where they just need a little more research support to enhance intellectual property that could be the basis for a company, Howell says.

So how did WRF come to be in this enviable position? The tale begins in the early 1980s, when UW researcher Benjamin Hall discovered a technique for making complex peptide molecules in yeast, one of the founding innovations of the modern biotech industry. This technique is today licensed to more than 50 companies, who use the method to make insulin, enzymes for detergents, proteins to make cheese creamier, or for modern vaccines.

This lucrative method was the subject of intense patent lawyering in the early 1990s, when a group of 10 companies from around the world challenged its validity in Europe, Howell says. The opponents included Novo Nordisk, the world’s largest maker of insulin for diabetes, Seattle-based ZymoGenetics, and Japan-based Takeda Pharmaceutical. “They knew the technology was valuable, and they scoured the earth to dig up dirt,” Howell says, to try to suggest that Hall and the UW didn’t really have a valid claim.

After about five years and millions of dollars of lawyering from both sides, the patent was overturned in Europe. But it was only a “pyrrhic victory,” Howell says, because all the investigation uncovered evidence that buttressed the UW’s claim in the U.S. to the point of making it “bulletproof,” Howell says. And, importantly, since this proceeding dragged on in legal limbo for so long, it meant … Next Page »

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