University City Science Center QED program fuels 5 startups with $4.84M in funding: Study
November 3, 2016
Michelle Caffrey, Reporter
The University City Science Center’s QED proof-of-concept program, designed to bridge the funding gap between the point of discovery and commercialization in the life sciences and health care technology industry, received an in-depth performance evaluation that was released Wednesday night.
The full-scale review of the program (QED stands for quod erat demonstrandum, latin for “proven as demonstrated”) was conducted by the Economy League of Greater Philadelphia. The review showed that in the past eight years, both the program’s financial and mentorship arms have fueled the development of 94 projects, including 28 that received a total of $4.85 million funding, 8 that licensed technologies and 5 that grew into full-blown startup companies.
"We don’t think of this as a science center program, this is really a program that required buy-in from the universities we worked very closely with to set it up. There are really everybody’s fingerprints all over it,” said University City Science Center Vice President of Science and Technology Christopher Laing.
From the start, one of the core tenets of the QED program is its effort to unite 21 academic and research institutions in the tri-state area to work with the program, said Laing, making it one of the first in the country to enact a life sciences proof-of-concept program across multiple institutions.
“We’ve taken great pains right from the beginning of this program in 2009 for this to really be a community program," Laing said.
At Temple University, the program has been key for leveraging its more than $242 million in research expenditures and its innovation pipeline, which saw 127 discoveries last year, said Stephen Nappi, associate vice president for technology commercialization and business development.
QED specifically helped Temple advance four technologies that were funded through the program, three of which went on to spark a startup.
While the funding aspect is important, Nappi said that the advice provided by the more than 82 industry professionals who volunteered to serve as business advisors was invaluable.
“QED helped build that culture of commercialization by offering researchers expertise around regulatory issues like legal, insurance, marketing and other aspects,” said Nappi.
According to the progress report, QED’s selection team of 100 leaders in life sciences reviewed more than 475 technologies before pairing 94 of those with scientists and professionals since it launched in 2009. Those that received part of the nearly $5 million in funding from the program have combined to raise more than $19.2 million in follow-on funding. The bulk, $12.7 million, came from private investment, while $4.4 million was government research grants and $2.1 million stemmed from government commercialization grants.
The level of follow-on funding that was directed toward commercialization indicated to Laing that the program — born out of a 2007 report calling for an acceleration of technology transfer in the region — was working as intended.
“We were pleased to see a majority of funding attached with private or government funding focused on product development,” said Laing. “That kind of indicates there’s a longer trajectory for the projects.”
The program was valuable even for projects that didn’t make the cut for funding, said Temple’s Nappi.
“When we go in for the application to the QED program, we walk out with value even if the project isn’t funded. That’s because we’ve had to work through the exercise of building a commercialization pathway,” said Nappi. “Getting advice on that pathway and integrating that advice makes it so we can be more successful at innovating.”
The Economy League report, presented at the program’s Round Seven Showcase Wednesday night, showed that 90 percent of the participating researchers surveyed said QED was a valuable experience, and 90 percent of industry professionals and institutional administrators said the program aided in strengthening the innovation ecosystem in the Philadelphia region.
When it comes to product development specifically, three out of four researchers said they now have a better understanding of the commercialization process and it impacted their thinking about research impacts.
Commercialization was also better promoted at the institutions involved thanks to the program, three out of four administrators said, with 84 percent agreeing that QED helped build connections between researchers and entrepreneurs at their institutions.
The report also showed 98 percent of the business advisors who worked with projects said learning about new research at the region's institutions was a top outcome of their involvement.
That kind of benefit, which gave many entrepreneurs, industry professionals and investors an early look at new technologies and projects coming of universities, was somewhat unexpected, Laing said.
“It was unclear how much engagement we would get from those communities, and we’ve gotten great engagement from them, but I have only really been guessing as to the reason for it over the last few years,” said Laing. "That was a nice surprise.”
To show the success of the program in context with similar proof-of-concept initiatives, the report also provided three “gold-standard” programs as a benchmark.
The Coulter-Drexel Translational Research Partnership in Philadelphia, launched in 2006, has awarded $6.5 million to 50 projects spurring five startups. The longer-running Von Liebig Entrepreneurism Center at University of California - San Diego dates back to 2001, has funded 142 projects with a total of $6 million and spawned 67 startups that have drawn $150 million in follow-on funding.
In comparison, MIT’s Deshpande Center for Technological Innovation in Cambridge has provided $16.5 million to 125 projects that evolved into 32 startups since it began in 2002.
The report clarifies that the programs used for benchmarks are more established than QED and that it can expect greater investment figures as projects develop.
“Many of the technologies [QED] has funded to date have long horizons. Consequently, most QED projects have yet to reach a stage of development where they can attract significant follow-on venture capital investment,” the report said. “As QED-funded projects progress further along the development pipeline, it can be expected that follow-on funding — and program return on investment, in turn — will grow.”
Putting aside the statistical markers, Laing emphasized the value QED brings to real-life patients whose quality of life can be affected by developments such as iBreastExam, a portable, low-cost scanner to detect breast cancer. It’s been supported by QED and is now being deployed in India, where just 50 percent of women survive a diagnosis of breast cancer.
Moving forward, the biggest lesson both Laing and Rappi said they gleaned from the study was the need to compound QED beyond its current boundaries.
“The program’s scale and scope really doesn’t capture the potential that’s in the region,” said Laing. “We need to really find ways to either expand, or connect or link our program to other efforts that help to increase the scale of impact we can be having.”