Greater cooperation between universities, industry could accelerate biomed growth.

As recently as three years ago, Los Angeles-area universities had little to do with the local biomed industry.

There were, of course, graduates or faculty members of UCLA or Caltech who walked away with their research findings to work for a local biomed firm or to launch their own companies. But, by and large, these occasional defections were the extent of the relationship between academic institutions and the private sector.

But a transformation is taking place that could make biomed a more lucrative component of L.A.'s economy.

"University-industry relations are critical to maintaining the viability of the biomed community," said Ahmed Enany, executive director of the Southern California Biomed Council, an industry trade group.

"Regions that do well are those regions where you have closer ties between universities and the private sector - since most of the innovations come out of the university community," he said.

The close ties are also good for universities. First, they can gain from having a larger private-sector community to which they can license their technology. Universities own the rights to inventions of their faculty members - although, under federal funding requirements, they must provide a cut to the researcher. That cut generally ranges from about 30 to 40 percent of the licensing proceeds.

Moreover, growth of the biomed industry brings more technicians, scientists and others into the community, creating a more active environment for both the universities and the private sector. And researchers can remain at the university while simultaneously working for either an established biomed company or their own biomed startup.

UCLA is one of the local universities that has recently begun to recognize these potential benefits.

"We still haven't done as much as we could to nurture the biomed industry. But we are moving that way and moving that way very rapidly," said Alan Carsrud, who heads a UCLA program dedicated to aiding faculty members to use their innovations to launch biomed companies.

Carsrud's Ventures Program, based at UCLA's Anderson Graduate School of Management, teams up top MBA students with faculty researchers, especially those in medical-related fields. Business students aid the researchers in developing business plans, researching markets and securing venture capital.

This program, which helped create four new companies in 1996, allows faculty members to start up a new company and remain at the university as professors and medical researchers, said Carsrud.

In the past, faculty members' options were basically limited to either accepting a cut from the university licensing their inventions to outside companies, or leaving their university position to start a company of their own.

Another UCLA effort to nurture biomed growth is the school's business research partnerships group, which works on obtaining patents and licensing the patent rights for the inventions of university faculty.

Chris Moulding, the office's licensing associate, said that in the last 12 to 18 months his office has begun to focus its efforts on the biomed industry in Los Angeles.

"Generally, when we licensed inventions to companies, they were not normally based in the L.A. area, but were located in places like San Francisco or San Diego. Licensing with local companies or being involved in the formation of new companies in the area has become more pronounced."

Moulding believes there are two reasons for this.

First, UCLA has a new policy that allows it to take an equity ownership position in a company - instead of only cash - as part of the consideration for a license. This encourages faculty members to create new companies in the area rather than merely licensing their inventions to existing ones, said Moulding.

Both Caltech and USC also have begun fostering relationships between local companies and researchers.

When a company becomes interested in research being performed by a USC faculty member, the school provides free work space to the company's employees who are working closely with the faculty member. In exchange, the company gives a grant to the faculty member, said Maria Pellegrini, dean of research in the College of Letters, Arts and Sciences.

USC is also one of only two major universities in California (the other being the University of California at San Diego) that has a biomedical engineering undergraduate and graduate program, said David D'Argenio, chairman of USC's Biomedical Engineering Department.

These efforts by local universities may be an impressive start, but they need to be expanded, said Alfred E. Mann, a UCLA graduate and founder of three biomed companies in Sylmar.

"Universities are trying to build bridges to the industry and are giving professors more latitude in entering the market," said Mann. "But one of the problems is that it takes so much capital to create business, and the academic world doesn't really understand the economics of running a business."

Mann funded a foundation in 1985 with $20 million of his own money "to provide a forum for the development of devices with a longer-term development cycle than commercial companies could undertake." Mann said he is currently involved in negotiations to move the Alfred E. Mann Foundation to UCLA to act as a major research arm of the university.

Some say that the real culprit obstructing the industry's growth is the City of L.A.

Edward Pope, founder and president of Matech Biomedical Technologies, expressed the sentiments of many: "The real slow down is not so much with the universities, but with the City of L.A. Biomed is too long-term for politicians who would rather focus on commercial real estate and entertainment."