Licensing Deals: Lab Treasure or Personal Pleasure?

Ah, remember the glory days of the 20% NIH funding line?  Or the feeling of seeing a lab grow?  Or when people used to talk about those things called “jobs”?  Well, those memories are fading for us too.  Surviving tough times in the lab requires a bit of creativity and this is particularly true when it comes to figuring out how to pay the bills.

Many academic labs maintain collaborations with pharmaceutical (or other) companies in order to support a postdoc or grad student while getting paid to perform a specific project.  Although deals may be structured differently, typically the intellectual property developed by the academic lab stays with the university.  If the company is interested in the results, they will license the technology from the university and this is where things get exciting.

The licensing deal may be set up to include a percentage of future royalties from the eventual product developed by the company.  Since royalty payments don’t have to go to the lab, the money fits nicely in your pocket.  And who wouldn’t like to have even a small piece of the annual Lipitor revenue?

But for every Lipitor, there are hundreds of collaborations that don’t yield anything valuable.  Therefore, opting for less money up front with the promise of royalties later is not a sure thing.  We’re all struggling financially, both in and out of lab, so given the choice, how would you structure a deal: more cash for the lab with no chance of personal gain, or less money for the lab with a chance for a big personal upside?

For the Vegas fans – you’ve got 16 showing and while blackjack rules say don’t hit, there have been a lot of high cards dealt.  So in the words of the great Dirty Harry, “You gotta ask yourself one question, ‘Do I feel lucky’…well do ya’ punk?”

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