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LANL initiative spurs tech transfer

Los Alamos National Labs developed a new type of cytometer, or cell meter. Typical cytometers use fluids to rapidly push millions of compounds through the cytometer for medical diagnostics and drug discovery. LANL’s technology uses sound waves to move them, allowing researchers to slow things down and examine individual cells up close. This image shows DNA fragments flowing through the system with a green laser beam shining on the samples. Life Technologies acquired the system from Acoustic Cytometry Systems, which originally licensed it from LANL. (COURTESY of LANL)
Los Alamos National Labs developed a new type of cytometer, or cell meter. Typical cytometers use fluids to rapidly push millions of compounds through the cytometer for medical diagnostics and drug discovery. LANL’s technology uses sound waves to move them, allowing researchers to slow things down and examine individual cells up close. This image shows DNA fragments flowing through the system with a green laser beam shining on the samples. Life Technologies acquired the system from Acoustic Cytometry Systems, which originally licensed it from LANL. (COURTESY of LANL)
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This aerial view shows the central technical area of Los Alamos National Laboratory. (Courtesy of Lanl/Richard Robinson)

This aerial view shows the central technical area of Los Alamos National Laboratory. (Courtesy of Lanl/Richard Robinson)

Starting this summer, the University of New Mexico Medical Center will begin clinical trials to screen women for breast cancer with a new, potentially revolutionary technology developed at Los Alamos National Laboratory.

The ultrasound-based, three-dimensional tomography system could virtually eliminate the false negatives and operator errors inherent in current examinations, while avoiding potential safety issues and patient discomfort with X-ray-based mammogram screenings. So said Denis O’Conner, CEO of Mustomo Inc., a new startup developing the technology for market.

“With our system, we get a complete analysis of the breast from all sides, rather than the spotty, area-specific images from today’s handheld devices that generally miss about 15 percent of cancers,” O’Conner said.

The original LANL technology caught the eye of Tom Brennan, head of LANL’s LabStart initiative, which allows experienced entrepreneurs and investors to sift through hundreds, if not thousands, of lab inventions to identify ones with high commercialization potential. LabStart, which is jointly run by Arch Venture Partners and the Verge Fund in Albuquerque under contract with LANL, recruits businesspeople and investors to form startup companies and to provide funding to move technologies from lab to market.

In Mustomo’s case, Brennan recruited O’Conner — a veteran of the medical imaging market — who built an initial prototype machine for clinical trials and is now raising venture capital to move the company forward.

Mustomo is one of 19 startups that LabStart has helped launch with LANL technologies in the past two years. Under the program, investors and entrepreneurs have examined more than 600 LANL inventions to assess their market appeal.

“We have an active matrix of about 70 projects that we’re looking at and working on at any given time,” Brennan said. “Some get dropped, and some get turned into companies.”

LabStart has raised about $20 million for the 19 companies it started. And, of those, only four have failed.

Catching DOE’s eye

Such success has drawn praise and interest at the U.S. Department of Energy, which is struggling to build similar technology transfer success at all of its 17 national labs across the country. In fact, Brennan said he and other LabStart colleagues have discussed proposals with the DOE to expand the program to more government facilities.

“LabStart has popped up as a model that works,” Brennan said. “We have an active ‘white paper’ into (the DOE) for funding to roll it out to additional laboratories.”

Karina Edmonds, the DOE’s technology transfer coordinator until her appointment ended on April 11, said LabStart has indeed raised eyebrows.

“I’m very aware of the work (LabStart) is doing, and I do believe it’s a promising model,” Edmonds said.

Entrepreneurs and LANL executives say LabStart is successful because it broadly swings open the laboratory gates for investors and businesspeople to take a leading role in commercializing inventions.

That’s critical, because the traditionally closed culture at national security labs such as LANL, plus the lack of knowledge and experience by scientists and lab administrators about how to commercialize new discoveries, have often impeded technology transfer at many DOE facilities.

Overcoming isolation

LANL in particular has struggled with its isolation in Los Alamos, where it’s far from the kinds of entrepreneurial networks needed to build new technology businesses.

“It’s helping LANL overcome many disadvantages, including its remote location and its culture of secrecy,” said LANL Technology Transfer Division leader David Pesiri. “In the past, we’ve suffered from a lack of innovators and entrepreneurs with enough exposure to our technology.”

Moreover, entrepreneurs like Brennan have extensive networks of investors, business professionals and corporate executives that they can pull into licensing and developing technologies.

Brennan is a partner in Arch Venture Partners, a national private equity firm with $1.5 billion under management.

“The Arch Ventures network provides access to a huge number of Fortune 500 corporations and national-level venture capitalists,” Brennan said.

Other labs have also brought businesspeople inside their facilities to assess technologies through DOE “entrepreneur in residence” programs. But most of those initiatives have been under funded, and only involved a few businesspeople, rather than the team-based muscle and national networks that LabStart brings to LANL, Brennan said.

In addition, LANL has earned trust from entrepreneurs by embracing their advice, and by committing nearly $1.2 million of its own funds to LabStart, said Tom Stephenson, managing partner at the Verge Fund.

Two workers install a selective catalytic emissions reduction panel developed by CleanAir Systems Inc. in Santa Fe employing  technology from LANL. CleanAir was acquired by Caterpillar Inc. in 2010. (COURTESY of LANL)

Two workers install a selective catalytic emissions reduction panel developed by CleanAir Systems Inc. in Santa Fe employing technology from LANL. CleanAir was acquired by Caterpillar Inc. in 2010. (COURTESY of LANL)

“We’ve seen a very strong willingness on LANL’s part to take a different approach to technology transfer,” Stephenson said.

Growing pains

It hasn’t always been that way. LANL experienced many of the growing pains that other DOE labs now face in their technology transfer efforts.

John “Grizz” Deal, a serial entrepreneur who has worked for 20 years to commercialize LANL inventions and is currently marketing water-purification technology from the lab, said the licensing process at LANL was agonizing when tech transfer began in the 1990s.

“In the beginning, the whole thing was done with a single attorney, and once it took me two years to negotiate a license,” Deal said. “Fast forward to today, dozens of LANL people are now working there on technology transfer and they’ve got a real system in place to get you through the process fast.”

The lab has also launched other pro-commercialization programs over the years that have had a positive impact. LANL provides internal financing to lab scientists who want to commercialize their inventions for further research and development to improve market potential.

And, the lab provides $350,000 per year for a Venture Acceleration Fund that offers up to $100,000 grants to companies in northern New Mexico that are either commercializing lab technology or marketing inventions developed with LANL assistance. Since that fund launched in 2006, LANL has invested $2.46 million in 30 companies, said Technology Transfer Division Program Manager Belinda Snyder.

Even so, Deal said LANL could do more to help small companies commercialize technology.

“On the one hand, it’s easier to work with a small number of large corporations that already have significant resources, but statistically, 80 percent of new jobs come from small companies, and LANL is constantly struggling with that,” Deal said.

Nevertheless, LANL’s robust efforts to push technology commercialization forward is earning praise.

“What’s good about LANL is, despite the challenges, they’re still helping to get startups formed and technology out the door,” said John Freisinger, president and CEO of Technology Ventures Corp. in Albuquerque. “They haven’t been dealt an ideal hand of cards for this mission, but there’s a real push at LANL to do it.”

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