Florida Universities Tech Transfer Opportunities Gaining Attention

All of Florida’s major universities have created technology transfer
programs to help researchers take their potentially profitable commercial
findings to the marketplace. Biotech incubators have sprouted at several
campuses. And the venture capital community is taking note.

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Keith Allaun will tell you that five years ago he was a “Silicon Valley bigot.”

The managing partner of Eno River Ventures, a venture-capital firm, he believed you either were in Silicon Valley or you were nowhere
important. But Allaun is preparing to leave Silicon Valley soon and head to what he believes is a new research hot spot: Gainesville.

By:
Beatrice E Garcia
Miami Herald

Allaun — with family in tow — will be moving to Gainesville to open an office for his company and is in the process of raising $100 million for a
fund that will invest solely in university-based, early-stage companies in Florida.

Because of schools such as Stanford University and the California university system, Silicon Valley has ”a density that fosters creativity and
competition, so venture-capital firms want to be there,” says Allaun.

Now, Allaun sees some of that critical mass beginning to develop in the Gainesville, Tallahassee, Tampa and Orlando areas.

And he’s not the only one. At least two other funds — Academy Fund and Inflexion, which is affiliated with Village Ventures out of Williamstown,
Mass. — also are eyeing Gainesville to set up offices in the coming months.

The reason is simple: VCs like to be where the bulk of the research dollars are going. The University of Florida, Florida State University, the
University of Central Florida, the University of South Florida, Florida A&M University, the University of North Florida and the University of West
Florida attract more than two thirds of the research dollars that come into the state.

And it doesn’t hurt that Florida schools have a good track record when it comes to commercializing research. For example, Taxol, a
cancer-fighting drug, delivered about $67 million in 2000, its peak year, to Florida State University, where a scientist developed a method —
licensed to Bristol-Myers — that makes mass production of the drug possible. Those dollars are funding more research.

The money involved and the importance of developing the state’s intellectual capital beyond the universities isn’t wasted on business and
government leaders. After Sept. 11, they saw how easily Florida’s tourism-dependent economy can be dealt a blow when tourism suddenly
contracts.

Gov. Jeb Bush has proposed alloting $100 million in state funds to create ”centers of excellence” at various universities to attract leading
scientists capable of developing the next commercial blockbuster.

The legislature approved the Florida Technology Development, which was sponsored by Sen. Ron Klein, D-Boca Raton, among others. The bill
has yet to go to Gov. Bush for his signature.

But funding for the measure is up in the air. The state Senate included the measure in its budget plan, funding it at $50 million. The House didn’t
get around to voting on the budget before the first special legislative session ended April 5. Another special session may be called later this
month.

The governor, however, is tapping into a movement that was already percolating. All major universities in the state have created technology
transfer offices that help professors take their research finds from the lab to the marketplace. Biotech and technology incubators have sprouted
at several campuses.

”This has to be a greater priority,” says Carl Roston, an attorney with Akerman Senterfitt in Miami who chairs the firm’s venture-capital practice,
represents various early-stage companies and serves as general counsel for the Florida Research Consortium.

The consortium is a public-private partnership that hopes to bring together the 11 state universities and the University of Miami with the leaders
of the state’s technology and biotech firms.

But Florida has a long way to go to catch up to states such as Georgia, Kansas, North Carolina, Oklahoma and New Jersey, which began their
investments in technology centers 10 to 15 years ago.

”We’re not even at the starting block,” says David Gury, chairman and CEO of NABI, a Boca Raton pharmaceuticals company, and Florida
Research Consortium chairman. “We need capital, focus and executive talent.”

As the fourth-largest state in the country, Florida, Gury says, should have more stature in the high-tech development world, as well as a larger
share of the federal dollars supporting research.

It’s not that Florida is a research wasteland. Collectively, six of the schools pulled in nearly $900 million in research dollars in 2000, according to
the latest annual survey by the Association of University Technology Managers. Those schools filed for 292 patents that year.

But there are key ingredients that Florida lacks. The state needs to attract more venture-capital funding dedicated to start-ups. Of the $2.2
billion that VCs invested in Florida companies in 2000 and the $669 million last year, the bulk went to later-stage companies. The state also
needs executive talent experienced in turning ideas into products.

However, there is some change in the air. Two of the three elements Gury notes that Florida needs — capital and focus — are emerging.

Like Allaun’s Eno River Ventures, other venture funds dedicated to investing in early-stage companies are eyeing what’s happening at the
state’s top schools and are excited about the prospects.

”There’s an unmet need here,” says John Ciannamea of Academy Funds.

Ciannamea has visited with the major research universities in the state. Florida will be one of the six Southeastern states where Academy
plans to fund early-stage companies.

Inflexion is a Florida-based venture fund, with offices in Orlando, Tampa and Gainesville. Formed less than six months ago by four tech and VC
industry veterans, the fund’s tie to Village Ventures is key because it brings a national network of venture capital and institutional investors to
Florida, says Charles Resnick, one of the four Inflexion partners. He is based in Tampa.

Village Ventures is backed by major VC funds including Bain Capital, Highland Capital Partners, Sandler Capital Management and Janus
Capital.

Universities, meanwhile, are welcoming the attention.

The funds provide ”motivation for the faculty to come down from their ivory towers and go look for some partners,” says M.J. Soileau, University
of Central Florida’s director of research.

UCF sets aside $1 million a year to help support its faculty’s research. All professors have an equal shot of getting a portion of these funds, but
they must have an industry partner for their project. The school also helps faculty apply for federal grants.

FSU knows the meaning and value of research all too well. Dr. Robert Holton’s Taxol work has brought in millions of dollars to the university. But
current royalties have dropped 30 percent from the 2000 peak, says John Fraser, head of FSU’s technology transfer office.

However, the next generation of Taxol is well along in Taxalog, a company spun off from FSU in 1997. It has partnered with Wyeth-Ayerst
Laboratories to develop powerful drugs that can be used to treat tumors resistant to current therapies or for those with no current treatment.
Holton serves as chief scientific officer for Taxalog.

The University of Florida is probably the most aggressive in its effort to commercialize its research.

”We can’t sit around, trying to figure out what will be the next Gatorade,” says David Day, director of technology transfer at UF.

Day, who has been at UF for a little more than a year, was recruited from the University of Alabama at Birmingham, where he beefed up the
school’s commercialization efforts, helped increase research dollars and recruited top-notch faculty.

Day explains that UF changed direction in the past few years. Rather than forcing professors interested in bringing their research to market to
wear two hats — teacher and CEO — UF is now taking an active role in helping its faculty find capital and management talent. It’s also providing
help in writing business plans and finding industry partners when it’s time to begin manufacturing and distribution.

Day says the various entities at the university involved in helping professors bring their research to market are working together these days as
part of the school’s commercialization council. He’s reaching out to alumni who can invest in the new companies or provide management and
industry expertise.

Last month, Day took three UF-based companies on the road. They made presentations to angel-investor groups in Boca Raton and Stuart.
This month, they put in a repeat performance to an investor group in Jacksonville. Last November, it invited a group of 75 high net-worth
individuals to visit its Gainesville campus and facilities to get a first-hand look at some of the faculty’s work. It was Day who reached to Eno
River Ventures and Academy Funds, inviting them to visit UF.

Meanwhile, state businesses, through the creation of the Florida Research Consortium, and some industry groups such as BioFlorida and the
American Electronics Association are pushing to bring more research from the state’s universities onto the market.

The intent is to keep the commercialization of this research within the state, whenever possible, so the economic development impact can be
enjoyed here.

”We should keep the commerce at home when it’s feasible,” says Day. “Florida is a bit vulnerable if it’s too dependent on tourism.”