The University of Virginia has now invested nearly $1 million in the early stages of student and faculty startups, joining the growing number of schools investing in homegrown enterprises.
Universities increasingly have investment funds and programs to boost entrepreneurship within and around their campuses. UVa’s Licensing & Ventures Group’s $10 million Seed Fund, launched in 2016, so far has supported three Charlottesville-based ventures: TypeZero Technologies Inc., TearSolutions Inc. and Mission Secure Inc.
“The major goal is to connect tech and research developed at the university” with financial backing, said Bob Creeden, managing director of the Seed Fund. “There’s a need for someone to step up and take charge and be a catalyst.”
Seed-stage financings are typically small sums of money meant to finance the early development of a product. When a product is further along in development, the company might apply for venture capital, which can be multimillion-dollar deals, with high returns expected.
Creeden said that offering funding was a natural next step for the Licensing & Ventures Group, which historically has helped professors, staff and students apply for patents and licenses.
TearSolutions, co-founded by Gordon Laurie and Mark Logan, is a Charlottesville startup using university research and patents. Money from the Seed Fund, following investment from multiple other donors, will help push the company through its clinical trials and to a buyer, the founders hope.
“We have everything in place; now all we need is a good result,” said Logan, the former chairman, CEO and president of VISIX Inc., which created the laser technology for the LASIK procedure.
TearSolutions aims to bring a new medication for dry eye, LacripepTM, to market. Dry eye happens when a person can’t produce a steady flow of tears. While there are two prescription medications already on the market, TearSolutions says neither treats the underlying condition that changes how the eye produces tears.
Laurie, a professor of cell biology at UVa’s School of Medicine, has worked on the research behind the drug for years. In 2001, his team discovered lacritin, a protein found in tears. By synthesizing a small peptide found in lacritin, he hoped, they could develop a drug to offer better treatment for dry eye.
“I felt like there was a moral imperative to take this to the next step,” Laurie said. At the time, his mentor, the late Dr. John Herr, was leading a university push to commercialize more biotech research and get it to the public.
Lacripep is now in a Phase 2 trial to treat dry eye from Sjogren’s syndrome, an autoimmune disorder that also causes dry mouth. Because Sjogren’s is one of the hardest forms of dry eye to treat, TearSolutions hopes success in this trial will indicate effectiveness in other forms.
Logan said the Licensing & Ventures Group, after being restructured in 2012, has been extremely welcoming and supportive of startups.
Any UVa student, staffer or faculty member can apply for seed funding. Creeden also wanted to encourage participation from Charlottesville’s broader entrepreneurial community, so he opened applications to anyone who has completed Darden’s summer i.Lab program.
Since 1991, the number of U.S. patents issued to universities has nearly quadrupled, totaling 7,021 in 2016, according to a study by the Association of University Technology Managers. Most of those patents are concentrated in a few research universities. A few product licenses have yielded big payouts to campuses — Stanford University’s Google, the University of Florida’s Gatorade, Columbia University’s DNA splicing.
“The goal is not so much revenue to UVa but how we can help faculty and students with their ideas and research, and how to get that to the broader community,” Creeden said. “Certainly, there is an aspect of revenue, but the focus is broader.”
If TearSolutions is able to sell Lacripep to a pharmaceutical company, TearSolutions’ investors and the university would benefit. In 2017, UVa reported $401,638 in licensing revenue from intellectual property licenses and 22 jobs created by startups.