How Penn’s chief innovation officer helps turn faculty research into a multibillion-dollar windfall

John Swartley was recently promoted to chief innovation officer at the University of Pennsylvania, a newly created position in which he is tasked with identifying faculty research with commercial potential.

He is no stranger to that challenge, as the new job is a broader version of his old one.

Since 2014, Swartley has been managing director of the Penn Center for Innovation, where he helped faculty file patents, license their technology to corporate partners, form startup companies, and enter into sponsored research agreements. He helped Penn become a national leader in such efforts, earning the university more than $1 billion in licensing revenue during the most recent fiscal year, along with $1 billion in new investment for Penn-affiliated startups. The center has helped launch more than 100 startups based on faculty research in just the past five years.

In his new job, Swartley also will be looking for faculty research that is suited to other kinds of external partnerships, where the measure of success may not be raw totals of dollars and cents, he said. That type of innovation could come from anywhere in the university, not just the medical, engineering dental, and veterinary schools that now are the source of most commercial interest.

In an interview with The Inquirer, Swartley talked about his broader role, the changing investment climate for life science research, and how he and his colleagues look for potential winners among faculty innovators, such as the Nobel Prize-winning research on messenger RNA by Katalin Karikó and Drew Weissman, which formed the basis for the Pfizer and Moderna vaccines against COVID-19.

This conversation has been edited for length and clarity.

I’m not sure that anyone knew how important the invention was.

Eventually we ended up licensing the technology to an organization that was really focused on working with us to further improve the intellectual property. A colleague of mine, Jim Bowen, was the lead on that effort.

This was pre-COVID. At that point, we knew it was likely that the technology was potentially useful for therapeutics in such areas as infectious disease and cancer.

But nobody could predict the pandemic. The pandemic became like rocket fuel [for mRNA].

The most likely way that an opportunity becomes visible to us is usually through the initiative of the faculty or the innovator. They may come to us with a fully baked commercial alliance or relationship.

But sometimes we hear about researchers from others at Penn. One example is Penn scientist Cesar de la Fuente [who has used artificial intelligence for discovering potential new antibiotics, among other projects]. Jon Epstein, the chief scientific officer of Penn Medicine and now the dean of the medical school, came to us and said, “You’ve got to check this guy out.”

Once you’ve got the network going, you start to hear about those opportunities. There is so much interesting work going on here, it can be a bit overwhelming. For example, I might hear about a seminar on using A.I. for drug discovery and I’ll say to myself, “I’ve got to try and go see that.”

We want to be good shepherds and custodians of the technology. We protect a lot of intellectual property whether we know it’s ultimately going to be successful or not. It’s about finding partners who are willing to take on the risk.

At one point, we did a study of all the patents we file, and how many of them are licensed. It was close to 50%. It means your business development team is doing a darn good job.

The innovators in the faculty are the drivers of this. The machine is working well if it’s converting that many. It’s an impressive conversion rate.

Somebody else asked me that yesterday. Yes, I think it’s not all doom and gloom anymore. I don’t have any specific metrics for you. One thing I’m hearing is a lot of venture capital funds are able to raise money. They’re not doing a huge amount of new investing yet, but it’s not a capital availability problem.

I think so. There seems to be some thawing. My guess — and this is just pure speculation on my part having seen cycles like this previously — is that when the thaw happens, it’ll happen in a sector or two as opposed to a broader-based thaw. It’ll happen in a couple of hot areas. And when that starts to gain some momentum, I suspect that will then probably start transitioning into a broader rally.

One of the first things I’m doing is spending a lot of time talking to different stakeholders. One of the things I want to understand is, are there different definitions of innovation depending on what your core competency is, and what your key interests are? Not all of those definitions end with a big sponsored research agreement. As I learn more, I’m going to be expanding the definition of what innovation is at Penn, from areas that have either been underserved or underappreciated.

I have the luxury of being able to take a bird’s-eye view. For example, the definition of innovation at the Annenberg School [for Communication] almost certainly will be different from what the engineering school is doing.

Anytime I see a barrier to being able to develop a good idea, that interests me. Is it there because the right people haven’t talked to each other yet? Is it there because old policies need to be revisited? When you interview me again in a year’s time, I think I’m going to have four or five examples where we’re going to unleash a wave of creative activity.