Photo Caption: Growth-hormone drug co-inventor John Kopchick, a professor in the OU College of Osteopathic Medicine.
The sale brings cumulative royalty and licensing income resulting from the drug discovery to $73.5 million, with opportunities for $12.5 million more.
The inventors have received, and will continue to receive, about a third of those amounts, according to a source at OU.
Announced earlier this week, the five-year deal with a private-equity firm for the royalty rights could net the university and the drug’s inventors up to $52 million, to use for new biomedical research and technology commercialization initiatives. That’s on top of $34.5 in royalties up through last July.
The inventors, John Kopchick, Goll Ohio Professor of Molecular Biology in the OU College of Osteopathic Medicine and Edison Biotechnology Institute, and Wen Chen, a graduate student at the time of the invention, stand to earn a third of the total amount. Chen is no longer at OU.
According to a news release from OU Research Communications, the partial royalty rights to the antagonist drug Somavert have been sold to a private-equity firm managed by DRI Capital Inc. The drug, resulting from work by OU scientists, won approval from the U.S. Food and Drug Administration in 2003.
OU reported $8 million in royalty income in fiscal year 2010 from its license to the Pfizer corporation for the growth-hormone receptor antagonist technology that became the basis for Somavert.
The drug is marketed as a treatment for acromegaly, a form of gigantism marked by excessive levels of growth hormone that result in enlargement of the hands and feet, facial disfiguration and multiple organ disorders. About 40,000 individuals are diagnosed with acromegaly worldwide, according to the OU release.
In 1987, Kopchick and Chen discovered the growth-hormone receptor antagonist, which blocks the hormones’s normal action in the hormone.
After 15 years of research, development and clinical trials — which were supported, in part, by OU alumnus and biotechnology entrepreneur Rick Hawkins — the U.S. Food and Drug Administration approved the drug based on the discovery, Pegvisomant, for use in 2003.
In the years since Pfizer’s commercial launch of the drug as Somavert, OU has received $34.5 million in royalty income from the license.
The funds have been used by the departments, colleges and administrative offices affiliated with the discovery to support new faculty and student research programs and university technology commercialization efforts, the OU release said.
The new monetization transactions announced earlier this week will raise the total impact to the university and its inventors to up to $86.5 million, the largest royalty income in OU history.
The new agreements total $39 million and include contingency clauses that could provide up to $13 million in additional revenues to the university and the inventors if the market for Somavert increases, according to Andrea Gibson, director of research communications at OU. She confirmed that inventors Kopchick and Chen stand to collect a third of the money.
“This news demonstrates Ohio University’s reputation as a state and national leader in moving faculty innovations from the laboratory to the marketplace,” she said. “The royalty monetization will allow the institution to make important investments in its research and technology commercialization programs.”
Due to a “challenging fiscal environment,” the news release said, the university began exploring the option of monetizing the royalty income from Somavert in order to create an investment account that could offer additional years of funding support for research and technology transfer endeavors.
After a competitive bidding process, OU selected the offer from DRI Capital Inc., a privately held investment management company in Toronto.
The university will invest funds in new translational medicine research programs and efforts to commercialize faculty technologies in the areas of drug discovery and medical devices. It plans to support three to four endowed professorships and several graduate student fellowships focused on cancer and endocrine disease research at the Edison Biotechnology Institute, said Rathindra Bose, vice president for research and dean of the Graduate College.
“This investment will allow Ohio University to create a concrete plan for the future, and will help us attract outstanding faculty and student talent to our research and technology commercialization programs,” Bose said in the release.
The revenue also will support the university’s broader efforts to move faculty inventions to the marketplace. The university’s technology portfolio includes innovations for conventional and alternate energy and the environment, smart materials, information technology and therapeutics and medical devices. The patent portfolio includes 88 patents, with 240 applications pending.
OU joins a list of institutions that includes Northwestern University, New York University, University of Michigan and University of Connecticut that have monetized the royalty income from a profitable technology licensing agreement in order to reinvest in their institution’s research, scholarship and creative activities, the news release stated.
OU President Roderick McDavis praised the development. “This agreement represents the culmination of nearly a quarter century of faculty, student and staff efforts to turn a groundbreaking discovery in a research laboratory into a treatment that has improved the lives of thousands of people around the globe,” he said. “The royalty monetization will accelerate Ohio University’s endeavors to invest in additional applied research and innovations that elevate the human condition.”