Feature / Summer 2000
Did Someone Say ‘Eureka’?

The great idea is just the first step – that’s when the Innovations Foundation steps in. Now it’s looking for alumni who can help take new discoveries to market


So, it’s been a while since you graduated. Could be even a few decades. You’ve been around the block a few times, maybe started or bossed a few companies. But things don’t have the same savour they used to. You need a new challenge, something to get that engine turning again…. Brothers and sisters, has George Adams got a challenge for you.

How would you like to help commercialize a new way to make diesel fuel from old cooking oil and waste grease? Or how about a process to screen potential drugs more rapidly? Or maybe a new family of antibiotics? Those are just a few of the possibilities. Adams, the new president and CEO of the Innovations Foundation, has a whole portfolio of great technologies looking for experienced business people to help turn ideas from potential to profit. “We have opportunities coming out our ears,” says Adams, who took over the helm of the foundation this past September. Not only that, but new technologies and inventions keep coming through the door from the vast well of ingenuity that is the University of Toronto.

Among the thousands of University of Toronto alumni, Adams figures that there must be a few good men and women who would like to get involved in new businesses. “We’re always looking for people who have management experience,” Adams says, “and we’ve been trying to find alumni who’d like to take on an advisory role.”

Adams himself is no stranger to academia, senior management or technology transfer. His patented process for storing blood platelets in a non-plasma medium was developed shortly after he obtained his doctorate in medical sciences from McMaster University in Hamilton. At the time, he was working for the Canadian Red Cross, which he left to become an associate professor of both biochemistry and surgery, and director of the artificial heart development program at the University of Ottawa. Eventually, the program morphed into a publicly traded company, World Heart, which continues to develop artificial hearts.

Adams left U of O to start his own company, Hemo-Stat Inc., which developed several hematology devices now being commercialized by Du Pont Canada Inc. Six years ago, he bought control of Corvita Canada and ran it until it was purchased by Boston Scientific in 1999. And he’s also been the founding investor in several start-up technology companies.

Sitting in his sparsely decorated office, overlooking the bustle of University Avenue in Toronto, Adams contemplates the near future with a good deal of zest. “To me, this is just a great job,” he says. It allows him to combine his academic and entrepreneurial backgrounds and to help other academics turn their ideas into products that will have an impact on the world. And he gets to turn other entrepreneurs on to new opportunities.

Consider Neteka, Inc. “I think they’re going to go ballistic,” says Adams. The company consists of a bunch of recent U of T graduates (plus a colleague from the University of Calgary) who showed up on the foundation’s doorstep last year with a great idea – making the Internet multilingual – and little or no idea what to do about it.

Edmon Chung (BASc 1998, MEng 1999), the 24-year-old president and chief creative officer of the fledgling company, got the idea when he was searching for information about a Chinese company on the Internet. The problem was that he only knew the company’s Chinese name, and there was no way to use Chinese characters to surf the Net. “I discovered the same problem exists for most of the world’s languages,” he says. So he decided to do something about it: With U of T colleagues Rebecca Chan (BASc 1998, MEng 1999), Wilson Chow (BSc 1999), Ken Lee (BASc 1998) and David Leung (BASc 1998), he developed prototype software that accepts non-English characters. “At that point,” he says, “we realized it was important to protect our intellectual property.”

But that sort of savvy didn’t come with Chung’s master’s degree in industrial engineering. He and his friends were not entirely at a loss, but they were certainly on unfamiliar ground. And in that, they’re on the same footing as many of the inventors and scientists who bring their ideas to the foundation. In the end it was fatherly advice that guided Chung: “One of the reasons we went to the Innovations Foundation,” he says, “was because of a reminder from my father that the university must have some advice for profs or students.”

Chung and his colleagues went to the foundation in late spring last year. “We basically searched the Web page and then went and knocked on the door,” he says. “Right from the start the foundation was really helpful and welcomed the idea.” With the foundation’s help, they registered a package of patents and developed a business plan. Meanwhile, the foundation started beating the bushes for capital. This March, a Toronto venture capital company, Quorum Funding Corp., invested $1 million in Neteka, sending a strong signal that the young entrepreneurs are on the right track.

For his part, Adams sees nothing but blue skies ahead for Neteka. As a representative of the foundation, he sits on the company’s board, and, he says, “the business potential is incredible.” He thinks Neteka’s software will “revolutionize the Internet,” opening it to billions of people who don’t speak, read or write English and who don’t even use the same alphabet.

The Innovations Foundation got its start in 1980 to take advantage of the wealth of inventions at the University of Toronto and to license them to private-sector companies. It was not, it’s fair to say, an overnight success. For one thing, there was not much incentive for an academic to commercialize an innovation, because the university claimed complete ownership of any inventions made on company time. As a faculty member, it made sense to go ahead and publish your revolutionary discovery in the usual journals and at least get scientific kudos. But once a discovery is published, it’s public property, and it’s difficult, if not impossible, to sell public property.

So, in 1990, the university changed that policy. Since then, an inventor on faculty just has to disclose the invention to the university. Then, he or she has two choices: Keep the rights and most of the potential profits, or sign them over to the university and keep a smaller share. Sounds like a no-brainer, but the catch is that if you keep the rights you have to handle all the nitty-gritty details of commercialization by yourself.

Before 1990, there were on average 22 disclosures a year. Now, Adams says, there are between 75 and 100 a year – evidence that the policy has worked. And, says Adams, “it’s increasing. Even in the past six months we’ve seen a big upsurge in opportunities coming through the door.”

That surge is a sign of a sea change in understanding that discovery goes hand in hand with commercialization, he says. But there’s a problem: Fully half of the inventors who come to the foundation have already disclosed their ideas, perhaps at a scientific meeting or in a journal. That may mean there’s no intellectual property to form the basis of a commercialization drive.

Instead of the old publish-or-perish rule of academia, Adams says, “we’re trying to change the paradigm – patent, then publish, then prosper.” As part of that push, Adams makes it a point to get out of his office and make the rounds of the various university departments looking for opportunities and incidentally spreading the patent-first gospel.

Many inventors at U of T opt to keep their rights and commercialize their technology themselves. But chemist David Boocock is not one of them. Boocock, who is chair of the department of chemical engineering and applied chemistry, has come up with a way to turn used cooking oil into diesel fuel, as well as a suite of related technologies. The benefit would be reduced reliance on fossil fuels, as well as a way to recycle the used oil.

Boocock knew the technology had enormous potential – but not necessarily in his hands. “I’m not a businessman,” he says. “I’m a scientist, and it seemed really reasonable to let people who know the business side handle it.”

He turned to the foundation, he says, almost by accident. A staff member of the university business development office, which works closely with the foundation, was in his department, essentially shaking the tree to see what technologies might fall out. “I said ‘Oh, by the way, I have this,’” Boocock says, “and within a couple of months we were rolling. It was amazingly fast.”

American rights to the discovery have been licensed to the Biodiesel Development Corp. of California, which is building a demonstration facility in the United States. The foundation, Adams says, is now looking for business talent (U of T alumni, take note) to commercialize Boocock’s process here.

There’s also enormous potential in Europe, where used oils are already being converted to diesel fuel, using an inefficient and costly process. Boocock says his technique takes 10 minutes at ambient temperatures and pressures, and the “base-catalysed” process produces a material that can be added to – or even substituted for – diesel fuel. In the European process, by contrast, the waste oils have to be processed several times before they’re ready to be used for fuel.

One of the companies that knows the Innovations Foundation of old is Select Therapeutics, which is based in the United States, although CEO Robert Bender makes his home in Ottawa. Select has licensed several technologies from the foundation, including one that uses bacteria found in everybody’s gut to battle cancer.

“If you believe that publicly funded research is likely to be of benefit to society as a whole,” Bender says, “then an organization such as the Innovations Foundation plays a critically important role.” Select took advantage of that role in 1997, when it licensed a discovery made by a group led by Dr. Clifford Lingwood at U of T and the Hospital for Sick Children. The group had discovered that a protein derived from a strain of the E. coli bacteria could be made to attack cancer cells and their associated blood vessels.

Verotoxin, as the protein is known, has demonstrated dramatic potential: In June 1999, researchers showed that it completely eliminated malignant human brain tumours grown in mice. Of course, curing cancer in mice is only a first step, but an exciting one.

Select has gone back to the well several times, most recently for a method of early detection of HIV – something that, if it pans out, will be of enormous value to patients and doctors, allowing earlier detection and treatment of the virus. The technology detects changes in the cell through an enzyme called fyn kinase, which, in small-scale in vitro experiments, shows increased activity in HIV-infected samples in as little as half an hour. The advantage over current tests, which can take days if not weeks, is obvious.

Select licenses technology from several universities, Bender says, and that’s not an easy job. That’s why something like the Innovations Foundation is needed – it makes “prospecting university research” much easier for the busy entrepreneur. It’s also, of course, a boon for the university community, which sees its efforts rewarded financially (the foundation had revenues of $6.5 million over the past five years) and emotionally (by having a beneficial impact on society).

But, Adams cautions, technology transfer is not the solution to tight money at the university. “We make money,” he says, but not “the millions and millions” that administrators envisaged in the ’80s. (In fact, even the top money-makers among university tech-transfer operations – at places like MIT and Stanford – earn most of their income from one or two superstar technologies, but come nowhere close to having a significant impact on their university’s bottom line.)

One non-monetary boon, Adams says, is the collaborative research agreement, in which licensees of a technology put money back into the university (usually the initial researcher’s lab) for more study and development. But the real driver for the academic community, he says, “is to have an impact through what you are doing.” If you can do well by doing good, so much the better.

Build a better mousetrap and the world will beat a path to your door. Or so the adage goes. Trouble is, as Bruce Harbinson can tell you, the world may take a while to get the word. Harbinson is president and CEO of Polyphalt Inc., a company based on a U of T process to reuse plastics and polymers in asphalt. The process is successful and, indeed, Polyphalt now lays claim to a variety of related technologies that improve road-building materials. The high-tech asphalt mixture cracks less in cold weather and ruts less in hot. Bottom line? The road lasts longer.

Polyphalt got its start in 1992 and has been slowly making a name for itself, licensing its technology to road-builders and asphalt-makers around the world. “For several years now, we have been held up as a success story,” Harbinson says. But the real breakthrough finally may have come this year, when Polyphalt signed a $10-million investment deal with a subsidiary of the giant Cheung Kong Infrastructure Holdings Ltd. of Hong Kong. The company builds roads and other infrastructure throughout Asia and has major investments in China. Now, Harbinson says, Polyphalt is “poised to become a pre-eminent player” in the world road-building market. It’s an overnight success – after several years of hard work building the company.

The lesson, perhaps, is that technology transfer is slower than the adage-makers would have us believe, despite the swift acceptance of a start-up like Neteka. But an equally valid lesson is that useful technologies eventually do find a role in the world – if they’re moulded and guided by astute management. And that’s where, as Adams says, U of T alumni can make a mark. “Give us a call,” he says, “and tell us what your skills, talents and connections are.” You might find yourself leading a potential technology giant into the future – and making a difference in the world.

Michael Smith is a Toronto science writer.


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