To Michael Cleare, executive director of Penn’s Center for Technology Transfer (CTT), it’s not enough that the University is a hotbed of scientific research. If all that knowledge is to be truly meaningful, it must make its way off campus.
“Penn is one of the biggest receivers of federal research funding in the country, so we have a massive responsibility to be diligent in translating that technology into opportunities in the outside world,” says Cleare. “It’s nice to push back the frontiers of science, but it’s even nicer if you can get that knowledge used to make a difference.”
One of the ways Cleare and his colleagues are making this happen is through UPStart, Penn’s business incubator at the CTT, currently celebrating its one-year anniversary.
“There’s a pool of entrepreneurs-in-waiting here at Penn, and what we’ve created is a way for them to launch companies around their own work,” says John Swartley, CTT’s deputy executive director.
Faculty were commercializing their discoveries long before UPStart began, but the efforts often led to a minefield of legal and financial questions the University could only answer in a slow, ad hoc fashion. The number of yearly invention disclosures by the University has nearly doubled over the last four years and UPStart, under the leadership of its director, Michael Poisel, has started 40 projects alone.
“Recognizing these kinds of deals could happen in the wrong way if we weren’t more involved as a partner, we just made the conscious decision to make a program whose mission is to partner with faculty in very friendly and fair terms,” says Swartley.
Because so much of Penn’s research is in the earliest stages, faculty need partners with the business acumen to present their work to the outside world in a way that allows it time to mature, Swartley says.
Such was the challenge facing Axonia, one of the first companies developed through UPStart. Axonia was founded last year by Harry Ledebur, a molecular biologist and investment scout, along with Douglas Smith, professor of neurosurgery and director of the Center for Brain Injury and Repair at Penn’s School of Medicine.
The groundwork for the company was established more than a decade ago, when Smith hypothesized a way of treating peripheral nerve damage that was completely absent from the scientific literature. The treatment would involve surgically replacing dysfunctional axons—the tendril-like part of nerve cells that sequentially pass electrical signals from the brain to the rest of the body—by unlocking the secret of how they grow and replicating that process in the lab.
“If you think of a blue whale embryo, the brain stem neuron that projects to a motor neuron in the tail only travels one or two millimeters in the embryo,” says Smith. “But then the animal grows 30 meters. As the vertebrae grow, the axons better grow along with them, or else they’ll disconnect.”
Smith would eventually extrapolate that knowledge into a device on which an axon can be precisely “stretched” as if it were in a developing embryo. This allows axons to be grown at an unprecedented rate, opening the door for them to be transplanted into injured patients.
Knowing that this yet-untapped process had the potential to revolutionize treatment for many common, debilitating injuries, Smith went to the CTT for assistance with patenting before he published his findings.
Over the following decade, Smith refined the technology in the laboratory while CTT helped package its business-application bona fides. In 2010, UPStart provided a profile of Smith’s work to Ledebur.
Having scoured the landscape for technologies that could form the backbone of a new business venture, Ledebur was interested in a “first in class” opportunity, but was wary of getting the support necessary to launch such an inherently risky proposition.
“I interfaced with 100, 150 universities and companies, parallel processing a number of different efforts, seeing which would be easiest to work with as a partner,” says Ledebur. “In today’s financing environment, you need to work with an institution that really understands ... how difficult it is to raise capital for early stage companies.”
After a year in UPStart’s incubator, Axonia is now courting investors.
“If this were a traditional company spitting out small molecules or antibodies, it would probably be an easier sell,” says Ledebur. “But, working with Penn and Doug, we all really believe in this opportunity, and that’s the first thing you need, the passion and belief.”
And while only time will tell whether Axonia will change the world with Smith’s ideas and technology, he would agree that without a University program and a partner to meet him halfway, he would never have had the chance to find out.