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Federal Tech Transfer: The Hearing Pill™
Tags:Case Studies, Collaboration, Innovators, Technology Transfer
In this partnership, American BioHealth Group invested funds, time, marketing and business expertise while the United States government contributed research and clinical trial support. Because the Navy’s tests proved that The Hearing Pill™ works not only to treat acute hearing loss, but to prevent it, American BioHealth Group now has an extremely viable product to sell. At its end, the government will profit from royalties on sales and in lower costs for military compensation, retraining, and equipment replacement due to hearing and balance disorders. The government, as the agent of the people, will also benefit in reduced costs to its citizens, as fewer live with hearing loss.
What does preventable hearing loss cost America annually?
Each year the United States Department of Defense spends $300 million on hearing loss compensation.1 In Iraq, for example, while body armor is reported to be doing a good job preventing many injuries and fatalities, heads are not protected. One third of the wounded come home with blast trauma from roadside bombs and gunfire.
Among civilians, reduced hearing capacity affects 39 million Americans and costs the nation billions of dollars per year,2 $56 billion alone in hearing disorder treatment and retraining.3 Much of this could be prevented if loss due to noise could be prevented or treated. Presently, 30 million individuals are exposed to injurious levels of noise each day;4 at current exposure limits, one in four will develop a permanent hearing loss as a result of occupational exposure to noise hazards.5
In addition, there are costs less easily quantified. NICHCY, the National Dissemination Center for Children with Disabilities, provides a Fact Sheet on Deafness and Hearing Loss in that population, including solid information on incidence, characteristics, educational implications, and resources at http://www.nichcy.org/pubs/factshe/fs3.pdf (pdf opens in new window).
TechLink: The Intermediary
The partners in this federal Tech Transfer were brought together by an intermediary: TechLink, based at Montana State University in Bozeman. [www.techlinkcenter.org]
TechLink connects companies nationwide with U.S. government research laboratories for licensing, transfer, development, and commercialization of new technologies. Funded by the Department of Defense and NASA, it introduces private industry to potentially commercial government-developed technology, and also looks for innovative work that can be moved from for-profit companies to federal labs.
FLC and Other Federal Intermediaries
The federal government supports a range of connecting organizations, most notably the Federal Laboratory Consortium, which represents the technology transfer activities of all Federal labs and engineering activities as well as the technology transfer offices of the labs’ parent Federal Agencies.
The FLC’s David Appler also recommends the NASA-funded National Technology Transfer Center and the Regional Technology Transfer Centers. “Many states have state, regional, and local economic development activities that provide a wealth of assistance,” says Appler. “Visit the web site for Maryland’s TEDCO to see an example. Their web site is www.marylandtedco.org. They do an excellent job of helping Federal labs in Maryland connect with others and vice versa in the technology transfer arena.”
On the FLC website, useful tools include the Technology Locator (described further below), and the FLC’s Web Site Reference, highlighted on its home page, which provides links to over 175 Federal labs and related resources.
Finally, there are Tech Transfer offices at many universities. For an overview, see the Association of University Technology Managers, http://www.autm.net/index.cfm
A Simple Chemical Compound
Federal tech transfer often consists of large-scale partnerships where complex technology moves between large organizations. In this case, however, the technology was a simple chemical compound, the company was a start-up.
Nick Zelver, a TechLink technology manager, evaluates and licenses intellectual property. Several years ago, just before he was leaving Bozeman on a trip to San Diego, TechLink’s Chief Technology Scout, Joan Wu-Singel, brought Nick an intriguing, very simple, and promising technology she’d found in the list of Defense Department patents she regularly reviewed. She had already spoken with one of the inventors, Dr. Richard Kopke, an Army physician stationed at the San Diego Navy hospital. Zelver agreed to pursue the technology, an antioxidant compound that had been FDA-approved for use as an antidote to overuse of acetaminophen. The Navy lab had discovered that it had some effectiveness in repairing hearing loss.
There are many ways in which potential licensees find out about technologies and technology transfer officers find out about potential licensees. Often, people like Nick Zelver market the technology directly to appropriate companies. At other times, they ask the inventor what direct contacts he or she has with companies or the private sector. “One of our key strategies in licensing is asking if the inventor knows of any interested licensees,” says Zelver. “Contacts can vary from research collaborations to social meetings, and are some of the best referrals you can have even if they start on a casual basis.”
Later that week, Zelver had lunch in San Diego with Kopke—who did indeed have a good lead for a partner: David Karlman, an entrepreneur experienced in pharmaceuticals and start-up, and his colleague, Mark Mugerditchian. When Zelver heard about Karlman and Mugerditchian, he arranged for another lunch the following day, with all of them, to talk about commercializing The Hearing Pill™.
At the second lunch, all four agreed that the project had a good chance of succeeding. The product potentially brought real value in markets on both sides: the Department of Defense could use it across the services, and it had a wide civilian application. American BioHealth Group was willing to explore the odds of their risk.
The next steps were to examine how the technology could be licensed from the Navy, to develop a commercialization plan, and to apply for a license. Following this, they would need to craft a Cooperative Research and Development Agreement, or CRADA, one of the tools of federal tech transfer.
Explaining the Technology Behind The Hearing Pill™ (which is composed of NAC, N-acetyl cysteine, an antioxidant)
“One of the most sensitive areas of the ear is the snail-shaped cochlea, in the inner ear. There, tiny hair cells turn vibrations into commands for nerves to fire.
“When these hair cells are overstressed by loud noises, “free radicals” - unstable oxygen atoms that are short an electron - are produced, explains Southern Illinois University professor of audiology research Kathleen Campbell. The radicals start stealing electrons from nearby molecules, like the cell’s fatty walls. Enough of this thievery will kill the cell.
“This can be stopped, however, if enough antioxidants - the body’s natural defense mechanisms - are supplied beforehand. The antioxidant molecules easily give up an electron. This supplies the free radical, and prevents its toxic larceny.”
From Wired, December 2003, “Pop a Pill, Save Your Hearing?” by Noah Shachtman
http://www.wired.com/news/medtech/0,1286,61646,00.html
CRADAs and the Process of Federal Technology Transfer
The formalized processes of federal tech transfer apply equally to major deals involving complex military hardware and something as simple as The Hearing Pill™.
Federal research labs are mandated by law to do tech transfer. Generally, according to the FLC’s David Appler, “the federal labs look to the private sector, typically defense contractors, to take their basic and applied research down the rest of the development pathway, even if the company takes it in a commercial direction that may not be directly useful to the government.” Appler cites two examples: the MRI, based on technology created to detect submarines; and the I-BOT wheelchair developed by Dean Kaman and now commercialized by Johnson & Johnson, which was invented thanks to spin gyroscopes designed by NASA. Nick Zelver describes a CRADA between Playtex and the Air Force Research Laboratory that allows Playtex to evaluate an Air Force technology for use in infant feeding products and that transfers proprietary know-how for use in manufacturing.
Sometimes technology moves from corporations to federal labs. Sometimes technology moves from a federal lab, to a corporation’s research and development division, and back to the federal lab, or for use by a federal agency.
When there is a CRADA between a federal laboratory and a company, specific expectations of the partners are put in the agreement. Each party can provide personnel or services. The non-federal partner can provide cash; the federal side cannot. Partners often take on complementary research, sharing findings back and forth. The patent remains the intellectual property of the original lab but is licensed exclusively to the partner. The end result of a CRADA can be technology moving from the federal laboratory to the company.
Ironically, protecting IP is the best way to move it into the marketplace
University tech transfer offices protect intellectual property (IP) not because they aim to create barriers to commercialization, says Nick Zelver of TechLink, but because protecting it is the best way to ensure that it gets into the market.
“Intellectual property often won’t get into the market unless it is protected because companies won’t invest in licensing something that everyone else can have. If they can’t have unique rights to the technology, commercializing may not be worth the investment. So if you want to provide benefit—which is a high priority for commercializing IP—and, although it may be a secondary motivation, make some money—you need to protect your IP.”
Each federal lab has an Office of Research and Technical Applications (ORTA is the acronym for both the office and for its managing official). For those labs with fewer than two hundred people, the ORTA is a collateral duty; larger labs have at least an FTE covering the task. This office reviews CRADAs, provides legal review from staff patent attorneys, and ensures that any changes are consistent with law and military policy. Each lab has its own primary investigators (PI), and its preferred contact with tech transfer partners. Once the ORTA has reviewed and the Commanding Officer has signed the CRADA, the PI takes over, but potential external partners can contact PIs before a CRADA is complete.
Dr. Charles Schlagel of the Naval Medical Research Center recommends that interested researchers or vendors start by using the FLC’s Technology Locator [www.federallabs.org/locator/]. “If you’re interested in a specific technology, the Technology Locator will direct you to what is likely to be the right lab. Find out who’s the ORTA at the lab, contact them, and they’ll direct you to the PI who’s actually working on that research. Then your PI can talk back and forth with the PI at the federal lab, to find out if they’re interested in collaborating. If so, they contact the ORTA for the CRADA.”
“The process can go very rapidly,” explains Schlagel. “After the tsunami came, we were contacted by Pfizer, who wanted to give $500,000 to a federal field lab in Aceh province. In about three days, we had a CRADA.”
The process can slow down when the external partner lacks expertise in federal tech transfer, for example, when there are no patent attorneys in-house or on retainer. That’s where an organization like TechLink can help.
In the case of The Hearing Pill™, TechLink worked with American BioHealth Group throughout the process, as a neutral party, a coach and mentor. Zelver and his colleagues helped Karlman with his business plan, describing the company and its abilities to get the job done, evaluating the market, the technical components of the invention, the soundness of the patent, projecting costs, and committing to levels of support.
The proposal was evaluated by Navy committees on the East Coast and the West Coast. They assessed technical capacity and individual personnel, as well as the company’s credibility, ethical standards, and ability to move the product to market.
When the military came back with proposed licensing terms, TechLink helped American BioHealth Group to understand and develop their licensing application, and, more recently, has even helped in drafting press releases.
“This was an unusual situation for us,” Nick Zelver comments, “because we generally don’t get involved with starting up a company. That might have slowed down the process.”
American BioHealth Group Risks—and Succeeds
“Our first job is always to do what’s right and ethical,” says David Karlman, CEO of American BioHealth Group. “So foremost, we needed to prove the efficacy of the compounds: first, will it do no harm? Second, does it create the desired benefit? On average, a pharmaceutical company will spend $280,000 to $400,000 before they know they’re successful. Out of fifteen compounds, eleven fail. The entire process is a high risk mission.
“We had one advantage with The Hearing Pill™, which is that the FDA had approved the compound over twenty-five years ago for other indications. Obviously, however, that didn’t mean that we could go to market with it as The Hearing Pill™. The FDA still needed to approve the label, what we say about it, what claims we make for it. But because it had been approved as a food supplement, it took us three years to come to market rather than nine to ten years. Additionally, given the success of The Hearing Pill™, American BioHealth Group is accelerating its development to investigate new synergistic products all based on the great work done by Naval Medical Center San Diego and all the other contributors within the FLC.”
American BioHealth Group funded several major trials, which were conducted by the Navy to ensure that the company was not influencing the data. The results of an extensive double blinded, placebo controlled, 566 patient clinical trial confirmed that the compound is effective in preventing hearing loss from noise exposure. The clinical trial found that permanent hearing loss was reduced when compared to the placebo. The results of this study add to the extensive body of positive evidence done in the laboratory.
Keys to Success
Nick Zelver describes three areas in which the project has to work:
- Market: “Is there a market? For The Hearing Pill™, absolutely there’s a market, and it’s open. No competing product exists.”
- Effectiveness: “Does the technology work? From the start it looked promising, and now we’ve got solid findings.”
- Compatibility Between PIs: “Can the company work with the inventor?”
As is so often the case in collaboration, effective communication, openness, honesty, and clarity about roles and responsibilities makes the difference between success and failure.
All of that was central to the relationship between American BioHealth Group and the Navy. As David Karlman recalls, “When we got to the point of licensing, we felt that both sides knew one another well. The Navy knew that American BioHealth Group was going to do what it said it would do, and we knew the same of them.”
It was even more important in the more intimate working relationship between the PIs. American BioHealth Group’s scientists and researchers, who had been in the pharmaceutical business, spoke early with the Navy’s key investigator and they had good rapport from the beginning.
“It really has to click on the personal level,” says Zelver. “A license is a relationship. A CRADA is a relationship. If the relationship works, it becomes much easier to define mutual benefits, to explore related research.”
Are there partnerships to be made between federal TT and the AT community?
Why is the majority of federal tech transfer outside the field of assistive technology?
Nick Zelver suggests the following reasons:
The connection is not established. In university settings, federal tech transfer is more frequently seen in other areas: pharmaceuticals in medical schools, for example, or agricultural schools that develop seed varieties. University researchers may benefit from working with their TT offices to identify opportunities.
Partners might succeed by approaching agencies with similar constituencies. Researchers with a focus on disability might connect with the Veterans’ Administration rather than with the Department of Defense.
To start a relationship, “ask not what your country can do for you, ask what you can do for your country.” Researchers who assume they have little to offer a federal lab might start relationships by getting past that assumption and identifying federal labs that could use what they’ve developed. Technology that enables video transmissions to be read instead of listened to in the noise of battle could meet military needs, beginning a dialogue between federal and civilian laboratories.
Be creative; sometimes the application is not obvious. TechLink helped with an unlikely partnership where a statistician came up with an algorithm helping an undersea naval warfare division distinguish between a whale and a torpedo, but the algorithm was licensed to a company that uses it to manipulate financial data. TechLink and organizations like it may help to identify non-obvious matches.
Learn what’s out there. Researchers may not think of federal tech transfer as a source of solutions—and therefore don’t work to keep informed about available federal patents.
The Hearing Pill ™ is currently available, without a prescription, at www.thehearingpill.com, or by calling 858-613-0748. Federal lab employees can receive a 10% discount when ordering at www.thehearingpill.com and using the discount code GOFEDLABS.
Cameos of Our Featured Collaborators
David Appler serves as the current Washington, D.C. Representative of Federal Laboratory Consortium for Technology Transfer (FLC). He has held that position since February, 2002. His current position involves interaction with those involved in technology transfer in both the Executive and Legislative Branches of the Federal Government, as well as state and local government, universities, and the numerous trade and professional associations with an interest in technology commercialization. Prior to 2002, he served as a civilian employee of the Department of Defense (DoD) for 34 years, holding various positions as a policy analyst for the Department. During his last 18 years at DoD he prepared policy for the Department’s scientific and technical information program and the technology transfer program. He is also a former Vice-Chair of the FLC.
Dave Karlman, the Chief Executive Officer and Chairman of American BioHealth Group is experienced in business development of high technology companies and healthcare organizations. Mr. Karlman has held leadership roles including: CEO of Axxcess Media, LLC., San Diego, a leasing organization that structured and marketed leasing packages to high technology companies; Chief Operating Officer, Real Image Technology, Inc., Los Angeles, a start-up company for delivery of motion picture content via a variety of broadband platforms; Chief Technology Officer and co-founder, Real Image Digital, LLC., Los Angeles, a well-capitalized high technology start-up which was successfully transitioned to Technicolor, Inc.
Dr. Charles John Schlagel retired as a Commander after serving twenty nine years in the Navy Medical Service Corp as a research microbiologist. He holds a doctoral degree in immunology from the University of Iowa. In 2004, Dr. Schlagel was the recipient of the first annual Department of Defense George F. Linsteadt Technology Transfer Achievement Award, which recognizes DoD Federal and non-Federal employees who have achieved significant accomplishments in support of and made notable contributions to the DoD Technology Transfer Program.
For the past seven years, as Director of the Office of Technology Transfer at the Naval Medical Research Center (NMRC), Dr. Schlagel has promoted and overseen technology transfer operations at NMRC and its four subordinate labs; the Naval Health Research Center (NHRC) and its four subordinate labs; and the three major Naval Medical Centers (Bethesda, MD; Portsmouth, VA; and San Diego, CA). Dr. Schlagel negotiates and reviews all Cooperative Research and Development Agreements (CRADAs) and patent license agreements (PLAs) for the entire Navy medical system.
Nick Zelver is a Technology Transfer Officer at Montana State University and at MSU TechLink. He has 25 years of experience in technology transfer, business development, licensing, and building industry-university partnerships. Previously, Zelver directed the Industrial Associates Program at the Center for Biofilm Engineering at MSU. He has patented and licensed several technologies involving biofilm technology and helped start-up two companies that provide equipment and services for biofilm monitoring, including a spin-out company built around MSU-licensed biofilm technology. Zelver is a licensed engineer in Montana. He has an M.S. in environmental engineering from Rice University, a B.A. in environmental engineering and a B.S. in biology from Humboldt State University.
- Deputy Under Secretary of Defense, Science and Technology, source: TechLink press release, http://www.techlinkcenter.org/cgi-bin/techlink/00879.
- Centers for Disease Control, ibid.
- National Institute for Occupation Health and Safety, ibid.
- National Institute for Occupational Safety and Health [NIOSH]. Fact Sheet: Work-Related Hearing Loss. Washington, DC: HHS, 1999, ibid.
- National Institute of Occupational Health and Safety, ibid.
