New WPI licencing arrangement ......... with themselves ?

[thegodofpleasure]

The Whittemore Peterson Institute posted the following announcement on their news page on 11th June

"The Whittemore Peterson Institute (WPI) has licensed its XMRV technology to WP Biotechnologies (WPBio), a subsidiary of WPI. This exclusive licensing arrangement was established to facilitate the rapid and broad commercialization of WPI's technology to benefit patients. WPBio has and will continue to enter into sublicense agreements with capable partners to improve and increase the availability of XMRV testing worldwide."

Does anyone know why they want /need to do this ?

TGOP

 

[awol]

Does anyone know why they want /need to do this ?

Probably because the funding agencies are biased so they have trouble raising funds for their research any other way.

 

[HopingSince88]

I see no problem with this.

They will make more money from the work that they did and the technology that they developed. Also, it states that they will "enter into sublicense agreements with capable partners to improve and increase the availability of XMRV testing worldwide." - which to me means that they are open to licensing other labs, who will have to pay a fee for this. Again they will make more money from this. And all these funds are now available to WPI for more research and treatment options.

 

[thegodofpleasure]

I see no problem with this.

They will make more money from the work that they did and the technology that they developed. Also, it states that they will "enter into sublicense agreements with capable partners to improve and increase the availability of XMRV testing worldwide." - which to me means that they are open to licensing other labs, who will have to pay a fee for this. Again they will make more money from this. And all these funds are now available to WPI for more research and treatment options.

I didn't say that there was a problem. Nor am I questioning the need to commercialise (and proliferate) their testing technique /methodology.

I'm just curious to know why they need to licence it to an intermediary company which they own. How will it make more money ?

It's an obvious question to ask, but why cannot WPI just issue the sub-licences directly? (They licenced it directly to VIPdx)

There must be a business / funding / tax reason for doing this which isn't apparent from the press release.

Just asking, because if I don't, others (perhaps less +vely minded towards WPI) most surely will.

TGOP :innocent1:

 

[leaves]

i am more worried about the exclusive nature of the test. I dont think that is going to help the xmrv case if other (bigger) labs are excluded from this test.
Another problem is that this will change the stakes of WPI, they now have a monetary interest in XMRV. I am not saying that this will cloud their judgments or change their actions, but I do worry that it will affect their credibility.

 

[citybug]

This was the arrangement with VIP before. Since VIP is becoming part of the university and it was developed before it should not belong to the university. There has to be someone to contact to handle it. A Belgian lab was already getting set up as part of this.

So far I don't think tests they spent weeks on for $450 are making a lot of money. You are required to set up corporations for some business things.

 

[julius]

Greatly reduced wait time

Once they have licensed it out to many labs, the wait time for results (and to get the kit in the first place) will be much less. If there is a lab in your area, it will take days/weeks rather than months (from the time you order your kit).

 

[usedtobeperkytina]

Very common to do this. When you have a subsection of your organization that is doing something with different goals than the original organization, you set up different structure. I have seen a group of investors set up a company to broker machines, another company to provide the people to run the machine, and another company to sell the substance used in the machine.

There may be conflict of interests and even competition. By having separate structures, even if all the same people, you allow for separate investors, you keep the purity of each organization's goals. For example, if another lab wants to get license for recipe for testing, well that other lab will be in direct competition with WP Biotechnologies for the same test.

So, WPI is staying separate from WP Biotechnologies, sort of. I don't know exactly why the reasons are for it to be the same but different in this case, but I will say it is very, very common.

Tina

 

[thegodofpleasure]

By having separate structures, even if all the same people, you allow for separate investors, you keep the purity of each organization's goals.

Yes Tina, I tend to agree with you and I'd like to think that this is the reason.

However, because WPI are not very good at "Public Relations" (they don't manage their message very effectively) we are still left guessing. This leaves a void which I fear, could be filled with damaging speculation. This is potentially harmful to the pursuit of the real science of XMRV.

In their defence, the WPI are a research organisation with a small budget and don't have the resources to hire in specialist PR advice. However, in this media spun, live for today world, the facts don't matter. In the short term, it's people's perception that counts.

TGOP

 

[Cort]

I imagine that it's just one of those standard things that companies do that the rest of us just don't understand because we don't have any experience in that realm. I wouldn't how be surprised if many, if not most, research institutes have these things.

Ah, I see usedtobe has cleared that up - thanks.

 

[Impish]

However, because WPI are not very good at "Public Relations" (they don't manage their message very effectively) we are still left guessing. This leaves a void which I fear, could be filled with damaging speculation. This is potentially harmful to the pursuit of the real science of XMRV.

In their defence, the WPI are a research organisation with a small budget and don't have the resources to hire in specialist PR advice. However, in this media spun, live for today world, the facts don't matter. In the short term, it's people's perception that counts.

TGOP

The bad news is that I think this is true, WPI have done damage through their lack of PR skills. At some level I suspect research funding is political. Even if you appear to be slightly off center I suspect you are going to cause issues for yourself. I realize that they felt the need to "fight back" due to the publicity generated by the negative studies but the way that they have done it at times seems a bit ill-advised. If you are trying to gain credability you need to be careful with what you say and where you say it. No PR person would have allowed the comments that got into the Chicago Times article to be said. As a result of that I fear that you are not going to see political backing for an organization that may be perceived as making outlandish claims.

I am not "anti-WPI". I want them to succeed but I am concerned at their weaknesses in this area and on its affect on them to raise further funding. You can be critical of an organization while still liking what they are trying to do.

 

[Athene]

Organising the accounts like this is sstandard procedure in US GAAP.
The WPI is not a business as I understand it, it is a research foundation and, as such, entitled to receive charitable donations and tax breaks. The subsidiary is a commercial company which follows the legal regulations applied to businesses, and the commercial protocols applicable to them, and will pay commercial tax rates, and cannot have subsidies thrown into it willy nilly.
You cannot have a charity and a business with their finances all jumbled up together. Since WPI owns the business as a subsidiary, it can reap the dividends (profits that can be legally removed from the company in a tax advantageous way) to make maximum financial benefit.
Also, if they ever decide to hive off that part of the organisation there will be two clear separate accounting streams. Otherwise, separating things would be a nightmare.

Sorry to be a nerd about this. Organising company finances used to be my job. I get nostalgic sometimes!

 

[jspotila]

The Whittemore Peterson Institute posted the following announcement on their news page on 11th June

"The Whittemore Peterson Institute (WPI) has licensed its XMRV technology to WP Biotechnologies (WPBio), a subsidiary of WPI. This exclusive licensing arrangement was established to facilitate the rapid and broad commercialization of WPI's technology to benefit patients. WPBio has and will continue to enter into sublicense agreements with capable partners to improve and increase the availability of XMRV testing worldwide."

Does anyone know why they want /need to do this ?

TGOP

WPI is a non-profit 501(c)(3). The announcement you quoted sounds like WPBio is a for-profit business. There is an increasing trend in the non-profit world to spin off for-profit elements. It can create a source of revenue that goes back to the non-profit. For-profits and non-profits have very different legal structures and requirements, so a for-profit has more freedom in some regards. Please recognize that I am speculating based on the announcement, though. I don't know if WPBio is a for-profit or not - I'm guessing.

 

[Cookie Monster]

In agreement with the last two posts. There are legal requirements to satisfy in the form of corporate law & accounting standards which determine that you cannot include commercial practices within a not-for-profit entity.

Also...if Unevx is being set up as joint venture, that would allow VIPdx to be dissolved and therefore able to donate any profits retained back into WPI - possibly (depending on the amount) a useful & timely injection of funding around opening date.

 

[George]

Plus, 'He who is in the best position. . .

WINS'!

XMRV itself is not going away, ever. (grins) No matter what happens with CFS or MS or Autism or prostate cancer, XMRV is here to stay. There are now at least 4 known labs that have serology test, or make that 4 entity's not necessarily labs (Dr. Singh, WPI, Emory University and somebody else, (thinking, thinking, sigh not working)). Plus, Cooperative Diagnostics offers a test for sale (ooops not anymore, my bad) Clongen is offering an XMRV test and some place called ??SP Noregen?? is offering a test but it might not be for personal testing, It's kind of hard to tell from their website.

Anyway, however you slice it there are going to be a lot of researchers (for now) that are going to want reliable testing for XMRV so the group that is in the best position to offer it will reap the financial rewards in the long run.

It's a very smart move. Very Savvy business!

(big dog grins)

 

[John Leslie]

The US tax code precludes charitable organisations from directly profiting from the income stream associated with their intellectual property except as revenue from royalties from the for-profit.... why all the fuss?

 

[George]

But WPI isn't a charitable organization is it????? (scratch, scratch) They are non profit, right???

 

[John Leslie]

WPI is a 501 (c)(3)... it means it is a charitable organisation.

 

[usedtobeperkytina]

And, let's say lab A wants to get some testing done for their study. Maybe they got some patients. They want to see if people with XMRV do better, that is feel better, with some treatment. They want to monitor symptoms.

So, they get some people in, take their blood. Send it off to the new biolab that has been set up to see who is XMRV positive. Then they start treatment on those folks. They may not want WPI, who they are in competition with, to know they are doing this.

I don't know if this is possible, but my point is that there may be some conflict of interests. So you have a lab doing testing, and another lab doing research.

And as said, you may want to sell of one of them later. That was the case I described earlier with the company brokering machines, then separate company to provide technicians, etc. Their idea was to grow all businesses in groundbreaking new industry and then sell them in pieces, making millions.

Tina

 

[jspotila]

The US tax code precludes charitable organisations from directly profiting from the income stream associated with their intellectual property except as revenue from royalties from the for-profit.... why all the fuss?

Do you have a cite for this, John? My understanding is that 501(c)(3)s can generate revenue through product sales, charging for services, etc. I'm not aware of restrictions specific to intellectual property, but would like to read up on it.