Summer 2004 -- Vol. 21

Technology Developed at Penn State Licensed to Pharmaceutical Company

A collaboration of faculty, staff, students, and alumni has resulted in a licensing agreement between Penn State and Yeast Protein Sciences, Inc., of Burlingame, California.

Research led by Davis Ng, assistant professor of biochemistry and molecular biology, centers on making yeast a more useful "protein factory." For years, pharmaceutical companies have relied on a much more expensive process involving Chinese hamster ovary (CHO) cell cultures to produce proteins from which to manufacture drugs. Experiments with producing this class of proteins in yeast have been complicated because these proteins often would not fold properly in yeast. Ng's team believes it has solved that problem.

"The advantages of using yeast instead of CHO cells are primarily safety, reduced cost, and capacity," Ng said. "This technology has the potential to revolutionize the production of drugs to make them more affordable and available to the consumer."

When Ng realized the potential of his research breakthrough, he submitted an invention disclosure to the University's Intellectual Property Office, where it was assigned to technology licensing officer Matthew D. Smith. Smith, in turn, asked Matthew S. Hales, a Science BS/MBA Program graduate student and intern, to explore potential marketing and licensing opportunities and to begin writing a business plan that might be used for a company specially incorporated to develop Ng's unique technology.

While Hales drafted the business plan, the invention went for consideration before the University's Patent Review Committee. The committee, after deciding Ng's technology should be patented, authorized the Intellectual Property Office to file a patent application with the U.S. Patent and Trademark Office. Hales then finished the business plan, which he marketed to various venture capitalists, including Robert Leach, '65 B.S. Chem and '66 MBA Mktg, who is president, chief operating officer, and managing partner of Tenex Greenhouse Ventures, LLC.

"This license agreement resulted from the valuable contribution of second-year BS/MBA student-intern Matthew Hales, who Smith said "wrote an excellent business plan."

Leach initiated licensing discussions with Penn State and ultimately licensed the technology. Leach utilized Hales' business plan as the framework from which to form the initial business plan for Yeast Protein Sciences, Inc. and has since raised capital from other investors. This capital will support the further development of Ng's technology.

Hales is now an associate manager of business analytics for Ortho Biotech Products, L.P., a Johnson & Johnson company.

The Science BS/MBA Program is a collaboration between Penn State's Eberly College of Science and the Smeal College of Business Administration. In this accelerated five year program, students can earn a B.S. in Science from the Eberly College of Science and an M.B.A. from the Smeal College of Business Administration.

Andy Elder

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