[Ip-health] RAPS: NIH’s Exclusive Licenses to Biotech, Pharma Start-Ups: Lots of Secrecy, Few Successes

Biotech. Info. Inst. biotech at biopharma.com
Thu May 12 07:59:44 PDT 2016


There are essentiallly different types of exclusive NIH patent licensing, and it seems important to differentiate between them.  This includes knowing which exclusive licenses resulted from CRADAs, where company researchers collaborate with NIH researchers and the company has the option to negotiate an exclusive license to resulting inventions, vs. fully in-house NIH researcher inventions.  The CRADA-related inventions (their exclusive licensing) should be of lesser concern, including these being more public (more transparent) with Fed. Reg. announcements required at various stages; and in the sense that many or even most considering this situation would presume it only fair that co-researcher/co-inventors’ companies should have a right to exclusively license patents where they were significantly involved in the invention (particularly, where there has been patent co-assignment — staff from both NIH and the company are recognized as inventors).

Also, in terms of transparency, keep in mind we are talking about patents, with these involving full invention disclosure (way more substantive than publications) and also surely related publications, presentations, etc. by the NIH inventors. It’s the licensing bureaucratic process (with NIH OTT operating under the NIH Director’s office) where there are apparent problems, including with exclusive patent licensing process transparency (with this nothing new, no real changes in decades).  

Thank you.

Ronald A. Rader
Former Author/Publisher, Federal Bio-Technology Transfer Directory (a 678-page directory in 1994, an online database into the late 1990s/early 2000s; this included then reporting over 500, mostly NIH, exclusive federal biomedical/biotech patent licenses); see www.bioinfo.com/fbdhome.html)
President 
Biotechnology Information Institute
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Phone:  301-424-0255
E-mail:  biotech at biopharma.com
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   www.biosimilarspipeline.com; www.biopharmacopeia.com


On May 11, 2016, at 5:57 PM, Michael H Davis <m.davis at csuohio.edu> wrote:

> This is rather interesting. The NIH and fda refuse to judge the reasonableness of prices with the excuse that they don't have expertise in such matters. But they do have expertise to judge whether documents deserve confidentiality or not. How do they get to choose their areas of expertise? Apparently when it suits them.
> 
> 
> 
> Sent from my T-Mobile 4G LTE Device
> 
> 
> -------- Original message --------
> From: Zack Struver <zack.struver at keionline.org>
> Date: 11/05/2016 15:35 (GMT-05:00)
> To: ip-health at lists.keionline.org
> Subject: [Ip-health] RAPS: NIH’s Exclusive Licenses to Biotech, Pharma Start-Ups: Lots of Secrecy, Few Successes
> 
> http://www.raps.org/Regulatory-Focus/News/2016/05/10/24906/NIH%E2%80%99s-Exclusive-Licenses-to-Biotech-Pharma-Start-Ups-Lots-of-Secrecy-Few-Successes/
> 
> NIH’s Exclusive Licenses to Biotech, Pharma Start-Ups: Lots of Secrecy, Few
> Successes
> 
> Posted 10 May 2016
> 
> By Zachary Brennan
> 
> It’s well-known that the National Institutes of Health (NIH) offers
> billions of dollars in grants to US academic research facilities. What’s
> less well-known is that each year, hundreds of new inventions are produced
> in the laboratories of NIH, the Centers for Disease Control and Prevention
> (CDC) and the Food and Drug Administration (FDA), and these inventions are
> licensed out to private companies in the US and internationally for further
> research and development, with the hopes of bringing new products to market.
> 
> The licenses generate significant amounts of revenue for NIH. From 1988 to
> 2004, NIH entered into almost 2,500 license agreements and generated more
> than $500 million in royalty revenues, according to a study from Nature
> Biotechnology.
> 
> And among those licensing opportunities, there’s a subset of exclusive
> licenses, meaning the use of the invention is limited to the license
> holder, which are offered to only tiny start-up biotech, pharmaceutical and
> medical device companies that are less than five years old, have raised
> less than $5 million and have less than 50 employees.
> 
> ........
> 
> Transparency Questions
> More recently, NIH has awarded exclusive licenses to companies that don’t
> have office space or even websites.
> 
> James Love, director of the non-profit non-governmental organization
> Knowledge Ecology International, which has been denied information from NIH
> on the exclusive licenses, told Focus: “I think the NIH Is operating in a
> highly non-transparent manner, really appalling.  Nothing that is not in
> the federal register notice is known about the licenses. They won't answer
> questions about the state of the technology, provide copies of the patent
> applications, give out the addresses or names of principals the businesses
> that have no web pages.  They won't give the royalty rate, the term of the
> license, or answer any questions about the analysis that was done to limit
> the exclusivity to something less than worldwide life of patent rights.
> The NIH seems to be ignoring the requirements of 35 USC 209(a)(1-2).”
> 
> For instance, NIH released a proposal to grant exclusive patent licenses to
> Vital Spark Inc. and Kalytera Therapeutics Inc. for CB1 receptor mediating
> compounds, but as KEI noted, Vital Spark does not have a website and
> there’s “virtually no information” on their status as a company.
> 
> “As far as we know, the NIH has not demonstrated why granting an exclusive
> license to either company is necessary, how the proposed scope of
> exclusivity is limited to that “reasonably necessary to provide the
> incentive for bringing the invention to practical application,” or how the
> NIH will ensure that the inventions is available to the public on
> reasonable terms, including but not limited to a reasonable price,” KEI
> said in a letter to NIH on 4 May.
> 
> Last year, NIH granted a start-up exclusive commercial patent license to
> Virotas Biopharmaceuticals, which also does not have a website and is
> listed as an LLC based in Delaware, though NIH said the company is based in
> California.
> 
> Sudarshan Upadhya, co-founder and chief scientific officer of AestasRx,
> which does not have a website but won the exclusive start-up license to
> develop diagnostics for Alzheimer’s and other diseases, told Focus that he
> could not discuss his work because of a non-disclosure agreement with NIH.
> 
> Ram Aiyar, executive vice president of corporate and business development
> at Corvidia, which has four employees and was granted an exclusive NIH
> start-up license this year for a cardiovascular therapeutic, told Focus his
> company is targeting certain segments of cardiovascular disease with
> mortality rates higher than 20%.
> 
> He said the company’s decision to apply for the license was based on
> Corvidia CEO Michael Davidson’s relationship with an NIH official, though
> the company was not launched “solely based off of that asset.” Corvidia
> recently closed $26 million in Series A financing, though Aiyar declined to
> offer any details on the timeline for the development of the NIH-developed
> therapeutic.
> 
> Sai Prashant Boyreddy, manager of Great Lakes Neuroscience, told Focus,
> noting his start-up of seven employees is still working on obtaining an
> exclusive license from NIH, which is reviewing the company's comments. He
> said NIH's due diligence has been a "long and lengthy process" and that he
> should know in two or three weeks if they've won the license. If they do,
> he said the company could hire more employees.
> 
> "The most important thing that needs to be told is that these inventions
> cannot be commercialized by NIH," Boyreddy said. "And the inventions are at
> such an early stage that large pharmaceutical companies don't want to waste
> their time on them."
> 
> An NIH spokeswoman also told Focus: “Any information about why a company
> submitting an application for an exclusive license was found acceptable
> would be business confidential and not subject to release to the public.”
> 
> 
> --
> Zack Struver, Communications and Research Associate
> Knowledge Ecology International
> zack.struver at keionline.org
> Twitter: @zstruver <https://twitter.com/zstruver>
> Office: +1 (202) 332-2670 Cell: +1 (914) 582-1428
> keionline.org
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