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From the Ivory Tower, Entrepreneurial Sparks: Part A

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Princeton Pioneer: Will Happer

Licensed Spin-Off: Universal Display Corporation

University Equity

Corrections or additions?

This article by Barbara Figge Fox was prepared for the August 22,

2001 edition of U.S. 1 Newspaper. All rights reserved.

From the Ivory Tower, Entrepreneurial Sparks: Part A

Only in the last decade did Princeton University

acknowledge

that some of its professors might possess an entrepreneurial notion,

a spark of an idea that — if carefully fanned — might kindle

the flame of a brand-new high tech business.

As late as 1994 the university was not ready to take an equity stake

in high tech start-ups. Physicist Will Happer struggled to form

Magnetic Imaging Technologies Inc. (MITI) without any university

ownership; instead MITI agreed to pay licensing fees and royalties for

the use of technology cultivated at Princeton.

Just three years later, Princeton had formed policies allowing

it to take equity positions in companies that wanted to license

technologies developed in university labs. The first was Universal

Display Corporation. UDC was working with ideas that had sparked in

the laboratory of Professor Stephen Forrest, and it needed to license

these ideas and move off campus. Since then, Princeton has taken

equity positions in more than a half dozen other companies as partial

payment for licensing rights.

But even as early as the early 1980s, faculty members were lobbying

to establish a center for nourishing collaborations between

corporations

and ivory tower scientists. The center for Photonics and

Optoelectronic

Materials (POEM) was established in 1989, and in 1994 Joseph X.

Montemarano

was appointed director of industrial liaison. "Active outreach

was always the intention," says Montemarano. "We wanted

companies

to know that POEM is a place to come for technical assistance and,

possibly, very valuable technology." Montemarano now proselytizes

in any of the scientific programs at Princeton University, trying

to set up entrepreneurial and corporate opportunities.

To stay current on what scientists are discovering in so many

different

fields — is a staggering task for Montemarano. Much of it starts

out as "basic research," which can loosely be described as

knowledge obtained for the good of mankind without regard to

commercialization

opportunities. Yet as scientists pursue the mysteries of light waves,

or microbes, or electrical impulses from the brain, practical

applications do emerge.

How to find opportunities with commercial applications will be

Montemarano’s topic for the U.S. 1 Technology Forum. He will speak on

Thursday, August 30, at 4 p.m. at the Doral Forrestal, on "From

the Ivory Tower: a Princeton Guide to Valuable Technology." The

lecture is part of U.S. 1’s Technology Showcase, held in conjunction

with the Princeton Chamber’s Business Trade Fair, from 11 a.m. to 5

p.m. Admission is free. Call 609-452-7000.

POEM is directed by James Sturm. "At POEM, our organizing

principle is to surround ourselves with a user community," says

Montemarano.

"From where we began — in photonic materials and spectroscopy

— we surrounded ourselves with the telecommunications world, and

we started to have people come to us with other real world problems,

such as how to use IR night vision to see in the dark or to do

environmental

detection."

POEM’s first official industry partner was Sensors Unlimited.

"Ultimately

that has turned out to be among our most successful collaborations.

Learning how to work with companies in efficient ways — that was

something that over a 10-year period has grown to be one of our most

successful engagements," says Montemarano. "The measure

shouldn’t

only be just dollars. We started with two people on the side of

Sensors

and as of six months ago they were acquired at a price of something

around $700 million."

Now POEM has broadened its scope to include newer areas, such as

"bio-nano,"

working with miniaturized techniques to make small, sophisticated

devices. "We are out there, talking to potential users, to get

them to challenge us to go beyond where we are." Like researchers

at neighboring Sarnoff Corporation, Princeton University scientists

tap computer and electronics research to come up with these biomedical

applications. But, says Montemarano, "we can be concerned about

long term applications whereas Sarnoff has to be concerned about a

product that can work pretty soon."

Montemarano also works with scientists at the Princeton Materials

Institute, established around the same time as POEM and located in

Bowen Hall, on Prospect Street. Whereas many universities have an

entire department devoted to materials science, PMI is fashioned as

an institute so that everyone — physicists, chemists, or engineers

— can use these top-notch facilities. PMI has some of the world’s

best imaging capabilities, administered by Nan Yao, and Yao points

out that, at least partly because the institute is so new, it has

the very latest equipment.

Compared to POEM, the connection between science and application at

Princeton Materials Institute is less tightly coupled, says

Montemarano.

It focuses on fundamental science, though it does progress to

applications.

Directed by Anthony Evans, the institute offers facilities and an

administrative staff to help organize proposals, find productive

partners,

and manage grants and intellectual properties. It encompasses eight

departments and has faculty appointments that are shared with other

departments. PMI interacts with the Woodrow Wilson School and has

centers for environmental engineering and demilitarization that have

public policy components.

Having degrees in both a life science and computer

science

might sound like a natural today, but it was a revolutionary idea

in 1975, when Joe Montemarano graduated from Johns Hopkins with a

biology major and computer science minor, and then stayed for his

master’s in computers. This biology/computer mix positioned him well

to explore the paths that researchers are taking in the 21st century.

Montemarano has spent his career looking for innovative research

projects,

explaining them to non-scientists, and helping them get funded. His

father was purchasing director at Time Inc. His mother taught piano

in Brooklyn, and from the time he was five years old, he practiced

piano two or three hours a day, and one of his siblings directs a

New York-based opera company.

"At Hopkins, I was introduced to many of the technologies that

are studied today," says Montemarano. Also at Hopkins, he met

his future wife, Regina, who now works at www.concert.com, a joint

venture between British Telecom and AT&T. They have two school-aged

sons and a preschool daughter.

Montemarano stayed in Baltimore to do sickle cell

research

in the lab of Warner Love and biochemistry research with Enrico Bucci

at the University of Maryland. He worked in the biosensors group at

the Bendix Advanced Technology Center in Columbia.

Moving to Princeton in 1981, Montemarano had a four-year stint with

PA Technology, working on biosensors and machine vision and helping

to start the United States biotechnology consulting practice there.

"Back then, I was working on the technologies that are converging

now," he says. He went to the New Jersey Commission on Science

and Technology in 1986 as associate director for science, and he

helped

to establish the "advance technical center" concept and the

bridge loan program. Since 1994 he has been industrial liaison at

Princeton University.

"Princeton University had, for many years, been in an a

isolationist

position," says Tony Warren, former chief executive of PA

Technology

(now PA Consulting Group on Enterprise Drive). "It needed someone

like Joe, who was willing to do the crossover between the technology

and the business world. He is clearly a catalyst for a change that

was long overdue."

"My background facilitates the ability to respond to the direction

that was set for POEM, initially by Steve Forrest and then by Jim

Sturm, and in some sense by what the funding sources are

emphasizing,"

says Montemarano. "It comes easily to me, because I was working

at the convergence of biology and computer science 20 years ago."

The seed for university licensing was planted in 1980 with the federal

Bayh-Dole Act. Before that legislation, if a researcher came up with

an invention after receiving federal funding then the government owned

the invention. The act made it possible for universities to own

technologies,

even those developed with government funds. That’s when licensing

offices began to sprout up.

At Princeton’s Office of Technology Licensing and Intellectual

Property,

John Ritter is director of patents and licensing. Although the

POEM/Materials

Institute group is "our biggest source of invention

disclosures,"

Ritter says, "we license technology from many other departments,

including computer science, chemistry, molecular biology, and

mechanical

and chemical engineering." Ritter estimates that the number of

companies licensed to manufacture technology generated by Princeton

researchers is 16 to 25 per year and that more than 40 licenses are

active.

A 1985 ceramic engineering graduate of Rutgers, Ritter has a law

degree

from Rutgers and came to the university in 1996. "Princeton did

technology transfer long before I arrived, but it is fair to

characterize

us as being more proactive over the last five years," says Ritter.

One license agreement, going back to 1985, may result in an anticancer

drug being sold by Eli Lilly. That drug, Alimta, started out in Ted

Taylor chemistry’s laboratory and is now in Phase III clinical trials.

"We make sure the research fits the university’s criteria," says

Ritter. "We don’t do product development, and universities must

watch that fine line very carefully."

Top Of Page
Princeton Pioneer: Will Happer

In 1994 physicist Will Happer (above) was one of the

first to push his own technology across the moat and take it

commercial.

His firm, Magnetic Imaging Technologies Inc. (MITI), was sold to

Nycomed

Amersham in 1999, a diagnostic imaging leader with an American

headquarters

at the Carnegie Center and about 8,500 employees world-wide. The

technology

has just entered Phase II clinical trials.

Because his was a pioneering effort at Princeton, says Happer, he

encountered "quite a bit of resistance," he says. Owning

equity

in a new company had not found its place in the university rule book.

"I found it pretty unpleasant. There was an attitude that

Princeton

people didn’t dirty themselves with commercial applications."

MITI was also one of the first companies to be associated with the

POEM center. "We have built on our telecom expertise and looked

to see how we can apply the technology directly or in a modified way

for medical applications," says Montemarano.

"It was nice to have people who understood how important it was

to get research out and used," says Happer.

How did he prevail? "Like you solve any other problem," says

Happer. "We just made ourselves intolerable until we won. We

raised

private money from our friends and put money in ourselves — there

was no venture capital," he says. It was indeed a risk, he agrees.

"I looked with some nervousness at my wife."

Because the university had not taken an equity position in MITI, it

received no proceeds from the sale. "At the time the university

did not take ownership, so initially I and my partners owned it

all,"

says Happer. (Since then, the university has acquired some equity.)

One partner, Gordon Cates, has left Princeton for the University of

Virginia, which has its own medical school, and has a joint

appointment

in both departments. The other partners were at Duke, which hosted

the clinical trials, and MITI is now located in North Carolina.

Happer’s idea is to use MRI (magnetic resonance imaging) technology

for images of lungs. Unlike an X-ray, an MRI is typically used to

take pictures of tissue, and what it looks for are "spins,"

associated with water or blood. First a magnetic field lines up the

protons and sets them whirling around like little tops, he explains.

These protons give off radio waves, and the MRI tunes into them, maps

them, and reconstructs a picture of the body. But a scan of the chest

or lungs is almost like a blank picture, because lungs are filled

with air.

Happer wanted to insert a gas that orients the "spins." He

uses lasers to line up the nuclei in helium. The patient breathes

in the helium and fills the lungs with these nicely ordered nuclei

which "spin around" and give off a frequency that is visible

to the MRI. This gas can be stored for long periods of time and warmed

up for the test, and it stays in the lungs long enough to do the scan.

"It was one of those examples of research initially pursued from

a purely theoretical interest," says Montemarano. "X-rays

don’t provide the same level of detail as this excited (helium) gas.

You can actually see fine capillary structures."

This "hyperpolarization" technology could lead to a new class

of imaging agents for improved views of lung function and other body

organs. The gas is being used many times a week at clinical trials

now being performed at a hospital in Charlotte, North Carolina.

"They

seldom do a lung operation there without knowing where to cut,"

says Happer. "People who are used to looking at images of lungs

can hardly believe the resolution. It’s very much better than anything

that’s available now."

Nycomed Amersham is very enthusiastic about this invention

(www.us-nai.com).

"We are still working with the people at Nycomed Amersham, and

it gets better every year," says Happer. "It hasn’t plateaud

yet."

Though he went into physics, Happer’s family roots are in medicine.

He grew up in south India, where both his parents met — they were

medical missionaries. A 1960 alumnus of the University of North

Carolina

with a PhD from Princeton, Happer is a specialist in laser

spectroscopy,

optical pumping, radio frequency spectroscopy, and magnetic resonance.

His wife is a school nurse in Hightstown, and they have two

grandchildren,

one in Los Angeles and another in Mexico.

Often called on to advise the federal government (he belongs to JASON,

a group of nationally known scientists who counsel government

agencies),

he was the director of the Office of Energy, U.S. Department of Energy

in the Bush administration from 1991 to 1993. In a public tiff with

the Clinton/Gore energy czar over just how serious the ozone problem

really is, he left that job several months early to return to

Princeton

(www.sepp.org/controv/happer.html).

Just about then Will Happer had his Eureka moment. He was lying flat

on his back, recovering from a slipped disk in his back, and having

just submitted to an MRI. He read a letter accepting his most recent

paper for publication in a prestigious journal but was infuriated

when someone from that journal declared one of his innovative ideas

to be "dumb."

"That really made us mad," says Happer. "I was lying on

my back with a ruptured disk and had just had an MRI. At that point

we decided to go ahead."

Top Of Page
Licensed Spin-Off: Universal Display Corporation

A five-year partnership with Stephen Forrest’s company,

Universal Display Corporation, gave Princeton University its first

large scale commercialization partnership — it received equity

in exchange for the granting of rights. Since then, the university

has done eight or nine other licenses.

Universal Display’s organic light-emitting device (OLED) is a

solid-state

semiconductor device that emits light when stimulated by an electric

current, whereas liquid crystals reflect light from a back-lit source.

The key to the project’s success, says Montemarano, has been the

collaboration

between electrical engineers and organic chemists.

"Our particular innovation has been to make functional layered

devices using thin-film technology — and to get color out of

them,"

says Forrest. OLEDs are supposed to be lighter in weight, cheaper

to manufacture, robust at various temperature ranges, less

power-hungry

and therefore more portable. And because they are faster, they are

more compatible with full-motion video. In the most advanced

manufacturing

phase, they can be made in high volume with economical roll-to-roll

continuous production, as well as with one-at-a-time batch processing.

This market has been estimated to be $1 billion by 2006.

Forrest is a first-generation American whose parents who placed a

great value on education, which helps keep him focused on teaching.

"It’s so much fun, working with students, coming up with new

things,

and moving ideas to a practical reality that actually may affect

people’s

lives in people’s ways." He went to the University of California,

Class of 1972, and received his Ph.D. in physics from the University

of Michigan. He spent six years at Bell Labs where he began research

into light emission, work he continued as a USC professor for seven

years before coming to Princeton in 1992. He has tenure in both his

department and Princeton Materials Institute. Forrest’s laboratory,

a veritable invention machine, also spawned Epitaxx (which was

successfully

sold), Greg Olson’s Sensors Unlimited (currently doing well at

Princeton

Service Center, www.sensorsinc.com), and Pennsylvania-based Global

Photonic Energy Corporation.

Other notable collaborations in this area involved Hopewell-based

PD-LD (with Vladimir Ban, www.pd-ld.com) and Princeton Optronics (with

Chuni Ghosh, who has just moved to Base 10’s former headquarters and

announced $25 million in second round funding,

www.princetonoptronics.com).

These companies have used the fabrication labs and the clean room

on the fourth floor of the Engineering Quad’s J wing for

optoelectronic

imaging applications; it costs $1 million a year to maintain and has

more than 100 users, including at least 20 visiting scientists and

engineers from industry. Just two engineering technicians have the

responsibility for keeping the lab going. Use of the lab is included

in POEM membership, which costs $20,000 to $50,000 a year, but

requires

working in sponsored research collaborations.

The lab is especially strong in infrared for night vision and cameras.

"One of the first infrared cameras that Sensors developed was

developed with us," says Montemarano, noting that all the

communications

in telecom are infrared. In contrast to Sensors Unlimited, which

involved

a blending of resources, all of the technology for Universal Display

was developed at the E-Quad.

Ultra Fast Optical Systems, yet another spinout, has gone so far as

to acquire a CEO (Tom Curtis), a chief technical officer, Larry

Baranyai,

and a faculty liaison, Ivan Glesk. (Ultra Fast’s article will be part

of the Princeton University coverage next week).

The latest spinout, formed over a year ago, is Applications Specific

Integrated Photonics (www.asipinc.com), based in Somerset. Forrest

is acting CEO and Yassi Moghaddam is in charge of marketing. Milind

Gokhale, a former postdoctoral student, is chief technical officer.

The company supplies advanced photonic components — very low cost,

high bandwidth integrated transmitters and receivers — for

advanced

fiber optic networks, "dense wavelength division multiplexed"

or DWDM networks.

As for UDC, investor Sherwin Seligsohn funded the research,

downstreamed

the technology into UDC, and took the company public, raising $6

million

on top of private funding of about $2.5 million. The university still

owns some of the stock, now trading on the Nasdaq SmallCap Market

(PANL) and the Philadelphia Exchange (PNL) at about $13. By the end

of this year UDC will nearly double its space on Phillips Boulevard

in Ewing, going from 11,000 to 21,000 square feet

(www.universaldisplay.com).

"The technology and the intellectual property accumulated puts

UDC in an extremely good position to have a profitable company in

OLEDs," says Forrest. "It has a very close partnership with

Princeton and with USC; it is an innovative and well-managed company

taking advantage of its resources. It still collaborates very closely

with POEM."

For Forrest, staying in academe while others take his

findings to market is the best of both worlds. Professors can maintain

their focus on research and teaching; entrepreneurs can turn that

research into a viable product, and manufacturers can then take it

to the mass market. "One of the things I get at the university

is freedom," he says. "I can pursue an idea that may not have

immediate commercial impact, whereas in a company I’d have to commit

myself to perfecting one product. It’s a very different set of skills

and missions, and I’m much more suited to the university side."

"For students to know that their work will help develop technology

is extremely important and motivating. Meeting performance criteria

focuses their learning and, for engineering students, that’s a

wonderful

experience," says Forrest.

"Our job is to create information and to create knowledge.

Sometimes

we work hard to make sure people use that knowledge. I have tended

to work closely with companies because I think that one of the values

of the work we do is to create new technologies that actually get

used."

"Sometimes the passive method works, but sometimes it is better

to actively help people use the technologies. They share a perspective

that is useful. They tell you what is helpful and what is not, and

that gives you focus."

If professors concentrate too much on profit rather than basic

research,

it will indeed affect their career. "Absolutely, your career will

suffer," says Forrest, "because you are not fulfilling the

mission you are hired to do. If you have an idea you feel you must

see the way to a profitable enterprise, then teaching and other duties

of being a professor and even broad research would become a

distraction."

Top Of Page
University Equity

Princeton University now has an equity position in

Magnetic

Imaging Technologies (MITI) and in three of Forrest’s companies,

Universal

Display Corporation (UDC), ASIP, and Ultra Fast Optical Systems, as

described above. Other companies in which it has an equity stake are

Global Photonic Energy Corporation (from Forrest’s laboratory),

Cellular

Genomics Inc. (derived from the work of a chemist who has left the

university), and Quorex Pharmaceuticals, based on the work of Bonnie

Bassler, an associate professor of molecular biology at Princeton,

and a scientist at the University of Calgary. It is trying to develop

a new class of broad-spectrum anti-infective drugs.

Bassler and her cohorts discovered that some bacteria communicate

via a universal "language" and can sense when they have

achieved

a threshold population density (a "quorum") needed to initiate

a successful infection in the host. Quorex drugs are intended to

destroy

a "bad" bacteria’s ability to survive in a host by destroying

its ability to communicate, obtain nutrients, and to battle the

patient’s

immune system.


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