UW’s challenge

Part I in a series.

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It’s a story that Madison loves to hear.

Two plucky entrepreneurs, Kevin Conroy and Manesh Arora, are hired in 2009 to revive a moribund health-tech startup in Boston. They have the temerity to move it from the best-known metropolis in the country for medical innovation to the much smaller Madison, where Conroy had run Third Wave Technologies. Their company had but two employees.

“Without the UW-Madison, Exact Sciences would not be in Madison,” Conroy says flatly. “We came here because the UW’s biochemistry program is one of the top in the country. It enabled us to hire really strong Ph.D. level scientists.”

Flash forward nine years: Exact Sciences has about 1,600 employees, 200 job vacancies, a stock market valuation of around $8 billion, and a fast-selling non-invasive colorectal cancer test called Cologuard. Other cancer tests are in the works.

Exact Sciences personifies the rise of the new Madison. It rides a wave of tech innovation that is closely tied to the UW’s fabled research prowess. But Cologuard was not tested at UW Hospital and Clinics, as you might expect, but at Mayo Clinics, which is Exact Sciences’ long-time partner. Exact’s other medical trials were conducted at MD Anderson Cancer Center in Houston.

Three years ago, when I wrote a mostly upbeat Isthmus cover story on technology transfer at UW-Madison, Conroy was a brooding presence. Doing clinical trials with the UW School of Medicine and Public Health was just too complicated, too prone for delay with the clinical trial review board, he complained. Both Anderson and Mayo were easier to work with “for a company operating at the speed of light.”

Conroy was heard. Exact Sciences is now doing preparatory research with the UW med school, but not yet a full-blown federally approved clinical trial.

Conroy sees progress. He considers himself a UW-Madison booster. But his impatience remains, and he’s definitely not alone in feeling the campus doesn’t yet have its act together on embracing the 21st century innovation economy. “C’mon, we can do better,” he says, sounding like a football coach at half-time.

UW’s eye-popping $200 million partnership with the Foxconn Technology Group — each side is pledging $100 million — jacks the stakes on UW’s sponsored research into the stratosphere. Experience, though, shows that the UW excels at rolling out big new economic programs like this one. The real question is whether the outcome years from now will live up to the ballyhoo.

You could almost hear the sigh of relief from Bascom Hall last December. Chancellor Rebecca Blank issued a news release celebrating the campus increase in research expenditures to almost $1.16 billion in fiscal year 2016. This ended a worrisome three-year decline in research spending for the state’s flagship university, according to data compiled by the National Science Foundation.

The chancellor, who took office during the decline, said the good news needed to be taken with a grain of salt. The data doesn’t always capture all research activity, she warned, and UW-Madison’s peers had upped their game as well. It’s a very competitive environment. And you can add, a changing one.

For decades, UW-Madison was an elite performer. It ranked among the top five research universities in the nation, according to the National Science Foundation. The prescient launching of its independent patenting and licensing arm, the Wisconsin Alumni Research Foundation, in 1925 deserves the credit. Created to manage the profits of UW biochemist Harry Steenbock’s breakthrough discovery of fortified vitamin D, WARF raced out of the gate as the first in the nation to commercialize university research for both public benefit and campus enrichment.

But that was then. With a critical change in federal law that empowered other universities and a shift in the paradigm to bring research to market, UW-Madison’s national preeminence has slipped. Two years ago, UW-Madison lost the bragging rights of being among the top five research universities in the nation.

Not that sixth place was bad, but Bucky ranked second for four straight years ending in 2009. Sixth place was the campus’ lowest score since 1972, when the feds began ranking universities.

Even more troubling, the Milken Institute in 2016 ranked the Madison campus and WARF at a disappointing 40th place in its assessment of best universities for technology transfer. This stung because Milken’s scorecard carries weight due to its thoroughness. It judges university performance based on four-year averages for patents granted by the feds, intellectual property licenses issued to businesses, the resulting licensing income and startups formed.

Other Midwestern universities and their commercialization units are outpacing UW-Madison, according to Milken. This includes the Purdue Research Foundation (#12), Northwestern (#23) and the universities of Minnesota (#14), Michigan (#16), Illinois at Chicago-Urbana (#18) and Nebraska (#35). UW’s #40 seems, well, meh.

As the headline on Chancellor Blank’s news release reminded campus: “UW-Madison’s Research Ranking Matters.” The irony is that some of the problems reside in the Bascom Hall bureaucracy she presides over.

Allen Dines has had a front-row view of the paradigm shift. He came to Madison in the 1980s to work for a pioneering plant genetics startup. He ran his own biotech company for awhile. He put in 13 years at Bascom Hall working on university tech transfer and mentoring young entrepreneurs. He’s now an executive advisor to WISC Partners, a venture capital outfit based in Madison and Silicon Valley. Last fall, the Wisconsin Technology Council gave Dines his due: They honored him with its annual Triple E award for “excellence in entrepreneurial education.”

How have things changed? Lots of ways that have not benefited UW-Madison or WARF, he says. Around 2000, large American corporations retreated from doing their own research. No longer were they willing to license a freshly minted WARF patent and figure out its commercial path in their own labs.

“WARF grew and became dominant in another era when companies invested huge amounts in their own research,” he says. “Places like Bell Labs are totally gone.”

Now it’s often the startups themselves that figure out how their discoveries can be marketed and commercialized. “The big companies just buy them. And the [venture capitalists who invest in the startups] and the founders make their money that way. It’s a nice virtuous circle if you will,” says Dines.

The problem is that despite being a renowned research center UW does relatively poorly on fostering startups. The Madison campus has never been viewed as business friendly, save for outliers like the Ag School, medical imaging, engineering and computer science. “Encouraging startups, commercializing research — that’s all really nice. They pay lip service to it,” Dines says of UW-Madison leadership. “But the fact of the matter is that they see the core function of the university as research and teaching.”

What’s wrong with that you ask? Teaching and the pursuit of knowledge for its own intrinsic value have always been at the heart of great universities. But Dines suggests the Madison campus is tainted by the belief that commerce and profit-making are somehow inappropriate in a university setting.

“There is this whole attitude that corporations are bad,” he says.

Dines worked in corporate relations on campus and helped foster entrepreneurialism, including the MERLIN Mentors program that matches aspiring entrepreneurs with savvy business veterans who volunteer their time.

But in the end he felt that campus administration just wasn’t into it. Institutionally the initiatives promoting sustainability and diversity got far more buy-in than the chancellor’s pledge to promote entrepreneurship and tech transfer.

“We’re talking about an organization that has a lot of inertia,” he says.

A few moments later, Dines adds: “I’m trying to be as charitable as possible.”

It’s hard to imagine more disturbing evidence of UW’s problem with sponsored research than this: In fall 2017, there was a backlog of about 500 unfinished research-related contracts with industry languishing in the UW’s Office of Industrial Partnerships, which negotiates and oversees agreements with corporate partners.

This revelation is contained in a stark six-page memo written that November by Susan LaBelle, then head of the UW’s Office of Corporate Relations. “The relevant question is how many companies walk away before they even start negotiating a contract?” LaBelle asked.

The contract backlog actually got as high as 550, according to Kim Moreland, associate vice chancellor for research administration.

Sounds bad, I suggest. “Yeah, I think it was,” Moreland says. “The problem was not just the backlog of old agreements, but that there were so many obstacles to negotiating new ones. The delays were much too long. People were doing their very best [to finalize the contracts], but there’s no doubt that campus was very frustrated.”

Most contracts dealt with bio-medical and engineering research, she notes, but also included everything from archaeological to linguistics studies. There were also a lot of fee-for-service agreements where the UW might sell biological products to other university labs or consult with a foreign school on academic matters.

In her memo, LaBelle said some researchers resorted to work-arounds to avoid the bottleneck over sponsored research — either convincing the businesses to make gifts to their labs to fund the research or, in the case of better known faculty, undertaking the research as a consultant. In both cases, the university would not collect the substantial administrative fees it charges for sponsored research and federally funded investigations.

Moreland entered the picture last year when the troubled Office of Industrial Partnerships, which had been reporting to the vice chancellor overseeing research, was rolled into a program she directs called Research and Sponsored Programs.

I ask the obvious: What the heck happened that such a backlog developed? “I can explain there are a number of things that need improvement, and that’s what we’re working on,” she says diplomatically, but then acknowledges a point LaBelle made: The university tends to hire young inexperienced lawyers who may feel safer saying no than yes to contract terms.

“We probably can’t afford a seasoned attorney with a history of working with industry,” she admits. “But not every contract is complicated.”

The good news is that the merged legal operation has doubled the number of attorneys available for contract work. Around 285 contracts come in each month, many of them routine but still complicated by things like shipping bio-material related to tissue research. Several outside negotiators from the Huron Consulting Group also chipped away at the contracts as well. The backlog has fallen to “under 200, maybe 150,” says Moreland.

“We are trying to attack the mountain of processes that were perhaps overly bureaucratic,” Moreland says. “We are looking for a way to be open to new ideas from business.”

The backlog in research contract approvals isn’t the only bureaucratic problem driving UW-Madison researchers up the wall.

A 2016 survey of 562 campus investigators found that almost 50 percent “had given up or almost given up pursuing a research project out of frustration” in getting their investigative protocols approved by the Institutional Review Board, which scrutinizes human research protocols in accordance with federal regulations, state laws and UW policies.

One of the anonymous responders put it this way: “I am considering leaving the university because of the impossibility of getting projects through the IRB in any type of timely basis. It is a real tragedy, and it is going to put this institution far behind as time passes.”

In a statement, a UW executive said the protocol review process has been streamlined and staffing increased to address the complaints. How satisfactory UW researchers find these measures will, of course, be the real test.

LaBelle had been asked by her boss Charles Hoslet, vice chancellor for university relations, to analyze why corporate-sponsored research had stagnated at UW-Madison. As a former executive with Covance, the pharmaceutical drugtesting giant, LaBelle knew the corporate research world. Her response is a detailed, unemotional indictment of how the Madison campus does business.

The problem with its cultural attitude stands out.

She said campus administrators were routinely dismissive of company feedback on the difficulty of working with them. Administrators resisted learning from the success of other top schools like Purdue and the University of Michigan. In particular, they had failed to devise “master” contracts, which would allow companies to work with multiple UW departments and schools — instead of continuing to require separate time-consuming contracts for each.

The lack of clarity in UW rules and processes was a problem. “‘It depends,’” she wrote, “is the most frequent but unsatisfactory answer to the question: ‘What are the rules for engaging with UW-Madison?’”

The “perceived lack of top administration support for sponsored research” was another hindrance. LaBelle said she was “not aware of any directive or statement” from either the chancellor’s office or the vice chancellor who oversees research committing the campus to step up its efforts to attract sponsored research.

In comparison, she pointed to Purdue and its president Mitch Daniels publicly pledging to double Purdue’s sponsored research in 18 months and succeeding. This included landing a $50 million research deal with Eli Lilly & Co., the pharmaceutical giant headquartered an hour or so away from Purdue in Indianapolis.

“I love our university. I love the faculty and the innovations. I love the willingness of faculty to meet with companies. It’s just stunning to me,” LaBelle tells me over coffee one morning.

“And then you get to the administrative side, and it was more like: ‘Here’s a list of 40 reasons why we can’t do anything.’ It felt to me like they wanted to move backwards, while the rest of the campus is trying to move forward. I don’t understand it. Personally, for me coming out of a business background, it was challenging. Why aren’t we talking about what we can change?”

Actually, change bordering on a shakeup is afoot at UW-Madison when it comes to tech transfer. Whether these moves produce the rebooting that LaBelle advocates is the big question. Future stories in this series will look at how newcomer Erik Iverson is changing WARF and how campus leaders have retooled the entrepreneur-focused Discovery To Product program,

Hoslet, meanwhile, is overseeing the biggest structural change of all: Creation of the new Office of Business Engagement. On Aug. 1 it replaced the old Office of Corporate Relations that LaBelle ran and assumed the philanthropic role of the UW Foundation for business contacts to donate money to the university. Amy Achter, formerly of Nature’s Bounty and Kraft Foods, was named managing director.

“Companies want to have a more holistic relation with the university,” Hoslet says. This translates to wanting a single contact to arrange a whole bunch of things: collaborative research, executive education, recruitment of graduates, technology transfer and philanthropic gifts. This one-stop service is what the Office of Business Engagement will provide.
One casualty of the reorganization is LaBelle. She says she was told she didn’t have the requisite fundraising background to apply for the post that Achter filled. LaBelle is now a faculty associate in the Master of Science in Biotechnology Program in the School of Medicine and Public Health.

I had to ask: What kind of response did she get to her November 2017 report? Nothing at all, LaBelle says, other than Hoslet thanking her. “I was a little weirded out about it. None of this was stuff I hadn’t talked about before. It was just a compilation of things that were happening everywhere on campus. It shouldn’t have been news to anyone.”

Hoslet says the LaBelle memo made it clear “we needed to do a more extensive assessment of our corporate relations.” The previous review came 15 years earlier. In February 2018 Hoslet named the 11-member Business Engagement Working Group. LaBelle was not included.

Hoslet agrees that one of the deep currents redefining research in the 21st century is that universities have become the defacto research-and-development centers for American industry. Big companies no longer do basic research. “That’s increasingly the province of research universities,” he says. “Places like UW-Madison.”

But the skeptic in me thinks the connection of words to action is not always manifest at the Madison campus. Palace intrigues sometimes produce unhelpful outcomes. Programs announced with great promise can fade quietly away.

The now cashiered Office of Corporate Relations was launched in 2003 with the highest of expectations.

The OCR would function “as a new front door to the university,” as Chancellor John Wiley’s Task Force on University-Business Relations put it. Wiley promised it would “better serve the increasingly complex needs of the business community and help build a stronger Wisconsin economy in the 21st century.”

It didn’t work out that way.

That’s why I found it interesting what Robert Golden, dean of the UW School of Medicine and Public Health, and Richard Moss, a senior associate dean at the school, had to say. Both seem firmly committed to challenging any med school insularity. They want to open the doors to clinical trials. They want to spread far and wide the benefits of UW medical research.

I bring up how frustrated Exact Sciences’ Kevin Conroy had been with the med school — and get no argument, only agreement, and even praise for how Conroy is challenging the med school to do better. “This was an exceedingly difficult place both for outside industry partners and for our own faculty to get their work done in clinical trials,” Golden says.

Because of the complaints of Conroy and other university friends, he explains, “we decided about a year ago it was time to launch an all-out effort to make this right.”

Golden proceeds to outline how “a very intensive consultation with someone from the industry side” produced a roadmap for change that was embraced by the university’s top leaders.

He says he fully expected the med school to emerge as “one of the most desirable places [in the country] to conduct clinical trials.”

But then Golden does the sort of BS check that is refreshing to hear at the UW. “To date, our progress, to be real blunt, has been in terms of process.” In other words … Not in actions taken.

Come back in a year or so, he suggests. Only then would they know if they’ve succeeded in making the med school “the kind of place where researchers bring their clinical trials, as opposed to being the kind of place where they’re frustrated trying to work through our bureaucracy.”

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Part II of the series will look at UW medical school initiatives to connect research to the real world of patient care. All the stories in this series on UW-Madison research can be found at isthmus.com/topics/uws-challenge/

Editor's note: This article originally stated that UW-Madison endured a four-year decline in research spending that ended in 2016. In fact, the decline lasted for three years. The news release from Chancellor Rebecca Blank that is linked to in this story also incorrectly states the decline lasted for four years.