Posted tagged ‘Ken Johnson’

What Next For WARF?

December 18, 2018

Like a giant iceberg in the North Atlantic, the Wisconsin Alumni Research Foundation is intimidatingly large yet mostly  hidden beneath the waves. It  looms over the local tech economy.

In this Isthmus cover story, I take a crack at examining WARF’s ups and downs in moving the discoveries of UW Madison researchers  to the broader world. I find it struggling to maintain its competitive edge, criticised by venture capitalists,  but gearing up its entrepreneurial game under managing editor Erik Iverson.

The story begins:

For an executive who just watched a half-billion dollars swirl down the drain, Erik Iverson is a cool cucumber. Just maybe the right guy at a crucial moment for the Wisconsin Alumni Research Foundation.

Iverson, a youngish 50 and a bit of a jock, is now two years into his role as the change-minded managing director of UW-Madison’s banged-up but still powerful technology licensing operation with 3,000 patents in its portfolio.

That’s to say, Iverson sits atop a 93-year-old independent nonprofit that for decades has been fabulously successful in bringing campus discoveries to the public and, not incidentally, socking away $2.9 billion in assets to benefit UW-Madison.

WARF’s contributions to UW-Madison programs this year? About $86 million, including $12.5 million to subsidize the privately run Morgridge Institute for Research.

But now WARF finds itself vulnerable and somewhat weakened. It faces a transformed marketplace that is not pliable to WARF’s old and settled ways of doing business.

In September a federal appeals court threw out a monumental $506 million award WARF received in a patent-infringement suit brought against Apple. (WARF has appealed the reversal, but Iverson admits such challenges are seldom successful.)

WARF’s licensing revenue dropped from $57.7 million in 2011 to $20 million in 2017 — stark evidence that for the first time in memory it no longer has a lucrative patent burnishing the bottom line. (Zemplar, a kidney disease drug discovered by legendary UW researcher Hector DeLuca, generated a humongous $500 million in royalties before the last of its patents expired in 2016.)

And for all the celebrations marking the 20th anniversary of UW-Madison researcher James Thompson’s stem-cell breakthrough, WARF has found that the related patents are not the huge moneymakers once envisioned. (Stem cells are basically a tool used in the search for new therapeutics; it’s the successful life-changing treatments, if they emerge, that will be mega-valuable.)

Iverson gets how serious WARF’s challenge is.

“Tech transfer is bloody hard. Really, really hard,” he says of moving basic academic research to the marketplace. “If you can find one diamond in the rough every 10 or 15 years you’re ahead of the curve.”

Yet Iverson, a veteran of Seattle’s vibrant tech scene, is confident that WARF’s newly expanded entrepreneurial program will solidify its success in the 21st century.

That diamond in the rough — the next Zemplar — will be found, he predicts.

To read more, please go here.

This is the last of five stories on tech transfer at UW-Madison. You can find the earlier pieces on this website or check out the special Isthmus landing page.


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