MIT researchers develop methodology for systematically tracking the outcomes of academic licensing transactions as a means of increasing funding to bridging the “valley of death.”
Cambridge, MA, March 11, 2021 – Despite a surge in recent years in the number of biotech startup companies spinning out of academia, little data has been collected on the impact of academic technology transfer. In an article published in Nature Biotechnology, MIT researchers address this gap by developing a framework for tracking innovation in the life sciences sector with origins in academia.
Using data on therapeutics-focused life sciences companies formed through MIT’s Technology Licensing Office (TLO) between 1983 and 2017, the researchers—led by Andrew Lo, Charles E. and Susan T. Harris Professor and Director of the Laboratory for Financial Engineering (LFE) at the MIT Sloan School of Management, and in collaboration with former MIT TLO director Lita Nelsen—perform a detailed analysis of the Institute’s intellectual property (IP) portfolio. The focus on therapeutics capitalizes on the drug development ecosystem physically surrounding MIT, and allowed them to use the number of drug approvals as a key metric of innovation. It is the first systematic analysis of a portfolio of therapeutics companies that have licensed IP from one specific academic institution.
“The growing number of collaborations between universities and private-sector venture funds points to the enthusiasm within the investment community to accelerate drug discovery at the academic level,” says Prof. Lo. “Our hope is that a concrete framework for evaluating the impact of academia on biomedical innovation will encourage further investment that can bridge the financing gap between early-stage research and clinical development.”
By constructing several measures of impact—including MIT patents cited in the FDA’s Orange Book, capital raised, outcomes from mergers and acquisitions, patents granted to to IP licensees, drug candidates discovered, and US drug approvals—they were able to compare the innovation contributed by MIT licensees against historical pharmaceutical industry averages.
Lo and Nelsen, along with MIT students Samuel Huang, Kien Wei Siah, and Shirley Chen, and LFE research affiliate Detelina Vasileva, found that four approved small-molecule drugs cite MIT patents and another 31 FDA-approved drugs had some involvement of MIT licensees. Of the 31 approved drugs, 55% were new molecular entities (NMEs) and 55% were granted priority review, which indicates that an unmet medical need was addressed.
These statistics compare favorably with industry averages: of all new drugs approved by the FDA from 1991–2017, 31% were NMEs and 24% were granted priority review. Although this comparison is limited due to the small sample size, and the fact that a preference for NME and priority review candidates among smaller biotech companies is unknown, it suggests that MIT licensees may have been more innovative than the industry average.
In examining the financials and R&D portfolios of MIT licensees, the study’s authors also found that academic IP contributes to critical components of a company’s success, including the team of people and talent brought together, catalyzing financing, and serving as a foundation for future R&D. “The link between academic IP and drug approvals isn’t a straight line and our analysis doesn’t capture all aspects of MIT’s contributions to therapeutic innovation. But with examples like Alynylam, bluebird bio, Editas Medicine, and Sangamo—all companies that have licensed MIT IP—it’s clear that MIT is creating innovative therapeutics on a regular basis,” adds Lo.
About the MIT Laboratory for Financial Engineering
The MIT Laboratory for Financial Engineering (LFE) is a research center focused on the quantitative analysis of financial markets and institutions using mathematical, statistical, and computational models and methods. The goal of the LFE is to support and promote academic advances in financial engineering and computational finance that can be directly applied for the betterment of the world. To do that, LFE faculty, students, and staff engage with industry professionals, regulators, policymakers, and other stakeholders to develop and apply new financial technologies to practical and socially important settings.