Baxter, Northwestern Enter Big Agreement For Small Research

So much of the investing that has gone on in this country
in the past two years has been speculation between something possibly turning out great
and something possibly fizzling.

With that in mind, Baxter International and a department at Northwestern University have
entered into what may end up being a revolutionary deal for the future of
nanotechnology, and, obtusely, the relationship between institutions of research and organizations that make
money off technology.

The deal, which calls for Baxter to give $450,000 a year for the next five years to Northwestern’s Institute for
Bioengineering and Nanoscience in Advanced Medicine, says that Baxter will support research among scientists
and post-doctoral fellows at the university.

"It’s really complementary to the work we do in terms of drug delivery," said Baxter spokeswoman Deborah Spack.
"We believe that nanoscience holds great potential for more effectively delivering and targeting specific
therapies."

The offer is embraced by the staff at Northwestern.

"The people from Baxter made contact with me a few months ago," said Samuel Stupp, director of the
Northwestern institute. "They were interested in collaborations with Northwestern, and I had created a research
incubator program that was meant to offer seed grants to faculty on high-risk projects related to bioengineering
and nanoscience in medicine.

"So Baxter became interested in this program and offered to support part of it. Baxter is a company that seems to
have a lot of internal energy for creative things, so the match was excellent between my objectives and theirs."

Stupp says this functions very similar to the way regular research contracts work: Baxter, as sponsor, gets the rights
of first refusal for any intellectual property that’s generated, while Northwestern hangs on to the enduring rights to
the property.

"It is offered to Baxter first for licensing," Stupp said. "The university would own the idea and there would be
patents under the names of the specific inventors involved (people working for the university). The expectation is
that this will become a wonderful model to sponsor exciting research in advanced medicine."

It is here where Neil Kane, founder of Illinois Partners and a columnist on nanotechnology, says the deal can
reach incredible heights.

"It’s all good news for everyone," he said. "I think it’s very positive for the university, and Baxter should be
applauded as well for funding this type of work."

Kane says he doesn’t even think there has to be a so-called "home run" from the project: "I don’t think that Baxter
necessarily needs to justify this particular investment in terms of its chances of hitting a home run. If none of
these pan out, that does not mean it’s a failure. I’m sure they have a lot of internal research, as well as hundreds
of realtionships with other organizations and universities. I suspect that they manage risk across all of that."

And what will it mean for Chicago?

"Having the reserach done here is good for the university," Kane said. "It’s only going to advance
nanotechnology in the area if Baxter or somebody else decides to commercialize the technology. Research is a
good start, but the proof or the benefit to the economy comes when people commercialize it. The more research
projects you have going on, the higher the likelihood that one is a success."

Stupp agrees, and says the uniqueness of the endeavor is its lure.

"It’s not your normal agreement," he said. "It has unusual features because it involves exploratory projects that
are proposed by faculty at Northwestern. If Northwestern people are interested in entering into an interaction with
Baxter, then we offer Baxter a choice of which projects they want to support.

"So it has a very good feature for both sides. The investigators of the university are not bound to any specific
ideas or fields they have to work on, and Baxter gets to choose what they are interested in. It’s like going
shopping to a wonderful store and picking what you want."

By TOM ALEXANDER
Executive Editor
[email protected]
AOL/AIM screename: TAL374690

Relevant Web Sites:
Baxter International (http://www.baxter.com)
Illinois Partners (http://www.illinoispartners.com)
Northwestern University (http://www.nwu.edu)

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