Inside UCSF Innovation Ventures with Executive Director, Anthony Francis

Tell us about UCSF and what sets your institution apart?

The simple answer to that question would be it’s the scientific research coupled with our focus on practical healthcare. At the University of California, San Francisco we are dedicated to science, so we allocate much of our budget to health research. This attracts many of the most gifted researchers in the world and allows us to provide some of the best health care delivery in the US.

UCSF has impressive statistics. The numbers shift, but I think currently we allocate around $1.2 billion for research. Combine that with one of the leading healthcare facilities and our exceptional healthcare schools, and UCSF is truly a powerhouse of innovation that has produced five Nobel laureates. It’s no surprise that UCSF attracts great investors, donors, and partners from around the Bay Area and beyond.

Perhaps the interesting piece that sets us apart are the people at UCSF that simply want to see our healthcare innovation get out there and benefit the public. This attitude exists across the organization within a framework of equity and access that underpins everything UCSF does. The simple commitment to getting healthcare technologies into user’s hands is something that makes this a very special place to work.

Could you highlight some of the programs UCSF Innovation Ventures has recently implemented to accelerate the selection and advancement of commercially relevant technologies?

Let me start by saying that UCSF Innovation Ventures used to be a more passive support department concerned mostly with the licensing of our researchers’ technologies. Over the last few years, we’ve taken a more active role with our researchers by implementing programs and initiatives to help advance their technologies.

While still managing technology licensing for the University, we have reinvented pieces of our structure and built a system that encourages better engagement with UCSF researchers. As we implement new systems of engagement, it’s been important for us to get our processes right, so we don’t disappoint our client researchers. Some of these improvements include simplifying access to our services, like easy disclosure, as well as many online resources to support a DIY framework. Last year, we launched a series of “roadshows” to help researchers understand how they can better take advantage of our resources. Next, we plan on holding workshops to help them identify and manage opportunities that are better structured for scale through more commercialized principles.

From a process point of view, we begin with market research to identify where our priorities need to be and help shape the pathway to achieving them. We’ve implemented our own system to track and help our team add value to each project. This approach helps to manage opportunities across four horizons, each of which adds value to the opportunity. This also eliminates the pointless “busy-work” you can often find yourself in with these early-stage opportunities and gives guidance to the questions of patentability, structure, market access, and team creation. To support this approach, we have formed a new division called Engagement and Opportunity Development (EOD) that handles this preliminary stage.

To support our EOD team, we have developed an Entrepreneur in Residence (EIR) platform that enables industry experts and entrepreneurs to engage with and help advance these opportunities. Often, they begin as consultants to a technology business opportunity, and we have a framework designed to bring them in to help raise capital, and potentially place them into the leadership of a startup that evolves from our technology.

Alongside our opportunity development work, Innovation Ventures has two stages of philanthropic funding that acts as translational accelerators for budding technologies. First, is our Catalyst Program which assists researchers prove their early-stage hypothesis and test their ideas. Next, the InVent Fund helps advance the best-suited technologies into pre-clinical trials. In addition to funding, both programs come with experienced product development mentoring and expertise, which both de-risks and adds great value to the project before launching it as a NewCo or licensing opportunity.

Taken together or apart, these initiatives work to fulfill that principal of getting our research out of the lab and into the market, and the value they add has a double effect of both lifting our performance and our research. It’s fair to say that the old attitudes of simply managing licenses are very much behind us now.

How do you work with the researchers at UCSF, and at what point to you like to get involved with these inventors to help facilitate translation of their discoveries?

Obviously, we’d love to say, “really well” and “as early as we can,” but that’s not always the case, and I imagine we will never be completely content since there is always room to improve. I’d like to think, however, that we’ve made great progress with many of the reforms we put into place. Under the previous approach of “Intellectual Property first,” we failed to maximize the relationship with our researchers. We weren’t really adding value and we were missing a lot of market opportunities. It would have to have been frustrating for researchers to see these missed opportunities. In some cases, we even undermined our capacity to help by having systems like an “apprentice model” where we held new staff back from really getting emersed in their projects. We were not as nimble as we should have been and frankly, we were teaching our officers a process that wasn’t helpful, or at least not as helpful as it could have been.

These days, we focus on the market and how we can help our technologies succeed in it. A key element is to give real market feedback to the researchers as early as is viable. This feedback shapes both the business as well as the research strategy. It’s like we are part of the team, standing alongside the researcher to help them hear and translate the voice of the market. Previously, we tried to stand back, acting more as experts in IP or “referees” on the sidelines. Today, it’s more about the feedback and how can we make this work. We know it’s not an exact science and there will be mistakes, but with the UCSF attitude of getting our science out there, it’s a much better fit.

I think I’ve digressed to the previous question, but it helps to understand the old way of doing things so that we can appreciate the new!

Tell us more about your technology screening and selection process? In other words, how do you decide which inventions to allocate resources?

We have a 3-category prioritization process that determines at what stage we are being introduced to a new technology discloser.

Because of the nature of UCSF research, there are many opportunities that need to go straight to negotiation and licensing. Often, these are deals with partners attached and/or are built for a specific life science distribution. These are called our “A” level technologies only because of their position to the market and the time it will take to move them forward, and not necessarily because of their size or importance.

The second category is our “B” level technologies. These need some work, something may be missing, or it’s not clear how best to position these. We work on the “B” opportunities intensively to see if we can add value and lift them to an “investible” position. This is often where our EiR and other programs come into play. Often these are potential start-ups, and the business proposition just needs some work. Remember that—in our old model—these would have likely been neglected, so it is a little ironic that the way we work now, these technologies have become the ones we pay the most attention to and have become the greatest source of impact.

The last category is “wait and see,” or simply “C.” Sometimes, things come to us very early on and we are happy to help move them forward, but the resource requirement demands more mentoring or advice and often we just need to wait for the science to flesh these out. In the case of a “C” technology, we might refer the Principal Investigator, or PI, to our Catalyst program. Nevertheless, they are on our radar and often jump forward or get added to another project when the time is right.

It’s important to note that all these technologies, whether “A,” “B,” or “C,” aren’t based on perceived future value, but instead, the relative timing and application of our resources. Today’s “C” project may become an “A” with the right focus and support.

What metrics for success are you looking for as you support these promising technologies?

That is the $100 million question at the University, and it’s often not thought through as well as it could be. It also depends on when in the process you choose to ask the question.

If you ask everyday UCSF folks, they might tell you the key is simply to see our inventions go to good use. Ask our finance team and they will say it’s about revenue (how much money will the technology make for the University?), and of course, revenue potential can drive the allocation of our department’s resources. But ask one of our innovation officers and they will tell you it’s about demonstrating our value to drive more research opportunities.

At Innovation Ventures, we seek out ways to increase the impact of technology beyond just potential revenue, but to also incorporate a much wider view of the success metric. The idea of “success in use” often matches initial revenue, as does the advancement of academic research. Yet, one real difficulty with only looking through the revenue lens is timing. Often our work doesn’t result in profit until a few years, or even a decade after the original deal. This leads many universities to work in a boom-and-bust cycle, with the constant restructuring of offices like ours. Getting to a measure of impact that combines strategic shorter-term wins with longer-term financial metrics is a more stable evaluation. Also, being able to use “stored wealth” through equity, and I mean equity in our spin-off technologies, can help iron out some of the low points. For example, the University can sell off shares when there’s a lull in income from licensing revenue.

The joy of being a part of UCSF is the absolute commitment to patient benefit. It means that we aren’t judged by financial performance alone, but by our contribution to healthcare as a whole.

Please describe how your background and career path have led to your current role.

I recall seeing the advertisement for the Executive Director of the Office of Technology Management at UCSF and thinking that would be a career-defining move for me. But despite my successful career record, I don’t have a PhD and that seemed like a deal-breaker for a senior role at a healthcare university, but I took the leap anyhow.

If I were to describe my background in a word, I would say I am a “nontraditional” choice for a research-focused institution like UCSF, because I come from a more entrepreneurial background. At the same time, I often wonder why more life-science innovators are not better-habituated to entrepreneurship.

I began my career on a traditional accounting path. Having achieved a degree of professional success at a young age, I was curious to know what else was out there, And yes, I can hear your readers groaning that having chosen to be an accountant, that should have been an obvious outcome. So, I embarked on projects that challenged me to understand revenue generation rather than just tracking costs, as any good accountant does. It led me into the board games business, where I wrote, developed, and created board games. From playing games, I got into film production, which was a natural progression. At the same time, I launched a consultancy business around commercialization for large research providers and universities, which was eventually acquired by none other than Deloitte. Unwittingly, I had created a loop and ended up back in an accounting firm! I left them to run the commercialization office at Flinders University in South Australia. Here, I took all my understanding of creating revenue from business into a resource for researchers. Under my tenure, Flinders became a very high profile “partner friendly” University. As is the case with smaller universities, it was time to move on after 10 years there, and I found myself helping to establish a small venture fund with a physician group. That was when I heard about Innovation Ventures.

UCSF has a focus on medical technology use and patient benefit, and this is amplified by our Vice Chancellor of Innovation, Barry Selick. When I showed up with a degree in accounting and a career in entrepreneurship, he immediately recognized the value I could bring to an academic setting trying to commercialize scientific research. This notion of getting more use from our research underpins the entire innovation conversation. It never ceases to impress, and I am grateful for it.

How does your proximity to a high concentration of venture capital firms impact the technology transfer process at UCSF?

When has proximity to capital been a negative in technology development? Is it the “be all and end all?” I don’t think so. The key driver for UCSF is the research and its value for healthcare. Our job is to maximize that impact and it doesn’t always mean the Silicon Valley crowd is our best partner.

What our proximity to investment wealth does create is a culture of commercial and innovation awareness within our research community. Most UCSF researchers are aware of their potential value and have interactions with the VC community in one way or another all the time. Even if it’s just through their children’s school connection (and believe me that happens more than you think). It’s also very much part of the San Francisco Bay Area culture and is impossible to ignore.

But let’s say UCSF was not in San Francisco, I think you could still replicate a lot of the innovation culture through strategic programs, open house events, and an open door mentality.

Short answer though: yes, it helps.

Some might assume that being in the Bay Area makes it much easier to attract investors and partners for life science innovation developed at UCSF. What are the challenges associated with being in what is arguably the world’s top ecosystem?

Let me say firstly the plusses outweigh the minuses.

There are always two edges to every sword though! The negative is that some researchers come to see the process as being more lucrative than it really is. They can become seduced by the VC world which dictates to them a specific narrative of monetary success. Sometimes this means the team you thought you had working on a new healthcare product is upset by an outside influence. Instead of increasing propensity for innovation, the potential for investment can do the opposite and slow things down. It can also bring in tricky conflict of interest questions. It can misalign expectations and introduce greed.

Most of this ends up being no more than a blip on the radar, but it can be confusing for our team as we try to bring these products to market because motivations do not always align.

Can you tell us about a couple of successful recent start-ups out of UCSF?

UCSF has been ground zero for many healthcare start-ups over the years. In fact, my office is in a building named for one of the largest companies to launch from UCSF technology: Genentech. That’s like choosing my favorite child: it’s almost impossible to single out one or two start-ups without talking about them all.

But I can highlight a high-profile one due for more success in the next year. Arsenal Bioscience is one that’s about to make a big impact in the fight against cancer with immune cell therapies. On the digital health front working to move precision medicine out of the purely academic world is MATE BioServices. I like Mate because it’s a machine-learning product that advances the interconnectedness of medical knowledge.

Of course, as soon as this article comes out there will be something new to talk about, so I suggest checking our website every few weeks for updates.

How has the pandemic influenced research and technology development at UCSF?

I think the pandemic actually helped medical technology research. Both healthcare and digital health have really taken center stage in the past few years. Both are areas that are seeing deep investment, somewhat because of the pandemic, which in the end adds up to better patient care and increased access to healthcare for more people. If there was ever a good side to the pandemic, this is sort of it.

From a UCSF perspective, we’ve seen some real advances. Many of our research faculty and workers have made major contributions to ending the pandemic and some have even stepped into healthcare leadership roles both locally and nationally.

When you look ahead 10 or 20 years, what changes or trends do you think are likely, in terms of startups and the role of research universities in the US economy?

Right now, universities are driving much of the research agenda already, it’s not always obvious, but it’s there. This begins with training future healthcare workers and continues through to ensuring better and more relevant research outcomes.

What is tricky is the lack of “patient capital” in the healthcare space. We are starting to realize that science can be as lucrative as real estate. Capital markets are turning life-science companies into something more akin to mining companies as they speculate on stock value and seem to forget the real purpose of the work. This forces the universities and academic institutions to step up if they want to capture value and remain relevant. I think it means we’ll see a lot more MedTech startups, just as we’ll see more public-private partnerships and alliances.

In addition, new finance models need to emerge to cater to a longer-term view. We see a gap, and in that gap a new category of funding will need to materialize. Possibly more philanthropic. Definitely outcome motivated.

Given that VIC works directly with universities to identify promising life science innovation and create new companies from scratch to develop and commercialize these technologies, how do you envision UCSF and VIC working together in the future?

We are both focused on the same thing: technology use. It has so many different dimensions and VIC brings a new dimension to UCSF. I can see us all eyeing a new opportunity, but from different perspectives and seeing where we can all help move it forward. Whilst that might sound a bit vague, we have built a framework for a group like VIC to contribute as part of our EiR network. VIC could become a trusted advisor and where you see an opportunity to partner with UCSF, we’ll help make that happen.

In the end it’s all for the benefit of users and the advancement of healthcare!

To learn more about UCSF Innovation Ventures visit innovation.ucsf.edu