This is the second of three parts of a story about how campus researchers are forging more alliances with industry to fund their work. The story, originally published in UC Davis Magazine, began last week with the rise of industry support. By Sylvia Wright University researchers are increasingly forging alliances with industry to fund their work. It's a practice that some find troubling, but one with such strong benefits for scientists and the state's economy that it's surely the way of the future. Some of the new corporate alliances borrow from conventional models; others are novel. They include: o Consortia: Vegetable crops professor and former department chair Kent Bradford organized his own consortium of about a dozen companies -- sort of a small-scale commodity board -- that each agreed to donate $3,500 every year for three years to support his seed research. Named the Western Regional Seed Physiology Research Group, it provides about $40,000 annually, enough to support one postdoctoral researcher in Bradford's lab. In return, those firms receive educational workshops and reports on Bradford's researc findings and updates on other projects in the laboratory. o Research centers: Bradford also leads a much larger effort to establish a Seed Biotechnology Center at UC Davis to coordinate research in improving seeds for agricultural crops. The center would facilitate the commercialization of plant genetic material and technology developed at UC Davis, promote research collaborations between campus faculty and industrial partners and offer educational programs for the public. Bradford has raised more than half of the $1.5 million needed for a building to house the center via donations from seed companies and foundations. He is also working with the California Seed Association and the California Department of Food and Agriculture to develop an ongoing funding mechanism for the center based on the value of seeds sold in California. He notes that those sales total approximately $300 million each year, part of an estimated $1 billion total annual value of the seed industry in the state. Similarly, plant biology professor John Harada received $190,000 in funding last year -- enough to support a technician, a postdoctoral researcher and a graduate student -- from a new UC-based program called the Seed Institute. Ceres Inc., an agricultural biotechnology company, gave the university $4.75 million to support the institute, $1 million to establish a Plant Genomics Technology Center at UCLA, and access to its genetic databases and resources. In return, Ceres gets the right of first refusal to license inventions arising from the research that it supports. UCLA's provost for letters and science proclaimed the alliance "a novel model for a partnership" between industry and universities. The five biologists receivingfirst-year funding from the institute all have longtime research collaborations with UCLA professor Robert Goldberg, who co-founded Ceres in 1997. o Exclusive industry support: This approach is still very rare at UC Davis because it is so difficult to sustain. Chemistry associate professor Michael Nantz happened into it in 1993 as an assistant professor, when a faculty colleague mentioned that Promega Corp., a maker of biological reagents and reagent systems, needed research help from a synthetic chemist. Nantz and Promega reached a $95,000 grant agreement in six weeks -- lightning speed for a university transaction. The project, now finished, paid for the necessary equipment (which Nantz continues to use), salaries for two doctoral students and supplies for about seven quarters of undergraduate-student research. Promega also paid for two years' salary for a Nantz postdoctoral researcher. The results of their work advanced the field of gene therapy and resulted in two commercial products, which now yield royalty payments to the university, Nantz and his former students. Nantz continued to work with only industry funding until 1996, when the Cystic Fibrosis Foundation awarded him a $200,000 grant to support the research begun by the Promega funding. The foundation continues to support him, and he also has funds now from the National Institutes of Health and competitive UC research-grants programs. Looking back, Nantz says that industry-only support "is not an easy path. No way." o Business start-ups: A handful of UC Davis faculty have started their own companies. The best-known example is Calgene, an agricultural biotech firm now owned by Monsanto. Calgene was co-founded in 1980 by agronomy and range science professor (now emeritus) Raymond Valentine. Shortly after starting the company, Valentine became the focus of a widely publicized, Novartis-like controversy over the proper relationship between the university and entrepreneurial faculty members. Committees were created. Public hearings were held. The presidents of UC, the California Institute of Technology, Harvard University, Massachusetts Institute of Technology and Stanford University met at Pajaro Dunes for a summit on the issues. In the end, Valentine was forced to cut some financial ties with the company, the UC code on conßict of interest was revised and the state began requiring UC professors to disclose financial ties with private firms. The Valentine affair may have had a chilling effect on some would-be faculty entrepreneurs. Biology professor Raymond Rodriguez is not one of them. He founded Applied Phytologics Inc. (API) in 1993 because his university lab, through state and federal grants, had produced about 12 patentable inventions but there was no company that wanted to exploit the technology. He organized a company, hired a CEO -- UC Davis alumnus Frank Hagie, B.S. '80 -- and then stepped back while API management negotiated the patenting and licensing process with the university. If API makes any profits from products that arise out of the Rodriguez patents, those profits will be shared with the university and Rodriguez through royalty payments. Now Rodriguez continues research programs in two labs -- on the campus and off. UC Davis faculty and administrators widely agree that Rodriguez and his firm are making appropriate use of public resources while avoiding conßicts of interest. Furthermore, Rodriguez's advice is increasingly sought by faculty members thinking of founding their own businesses. And while API isn't making any money yet, it has already come full circle: It has begun funding research in several campus labs -- $912,000 worth last year -- and hiring Davis graduates. Nine of 22 employees are alumni. "I'm very pleased about this," Rodriguez said. "This is a way for the company and the campus to interact in a very positive way." Michael Nantz has branched out into entrepreneurship, too -- with the UC Technology Transfer Center as matchmaker. That office, which reviews faculty discoveries for commercial potential and then negotiates licensing rights and royalties with private companies, saw complementary aspects between Nantz's research and that of some faculty members at UC San Francisco. Then it introduced the professors to venture capitalists. The result: a biotech start-up named Genteric, founded in 1997 by Nantz and three other UC faculty members, that now employs 14 people (one of them a former Nantz graduate student) who are working on a gene-therapy product they hope to have in clinical trials in the next two years. o Industry partner programs: Everybody's starting up these lucrative programs to support research and education. At the Graduate School of Management, 85 firms made donations last year ranging from $2,500 to $10,000 to the Business Partnership Program, for a total of $250,000. Donors receive special opportunities to network with other regional business executives, be the subjects of student projects, hear prominent speakers, meet potential employees and find out about UC Davis research projects of interest to their companies. At the Institute of Transportation Studies, 10 automakers, utilities and energy companies are corporate affiliates. Most give $15,000 annually; Nissan and Toyota give $40,000 each. In return, the affiliates receive many opportunities to visit with institute faculty and hear early information about research findings. o Administrative alliance-building: The cases of Applied Phytologics and Genteric illustrate how industry-university partnerships serve two key UC missions: first, serving as an economic engine for the state by expanding the industrial base and, second, supplying skilled workers for the state's businesses. In recent years, the university has launched a number of initiatives to increase the number and scale of such alliances. President Richard Atkinson, who has described industry partnerships as "an essential aspect of both our intellectual endeavor and our research funding base," pushed for the 1996 increase in the state tax credit for business investment in university research from 12 percent to 24 percent. The same year, he created the Industry-University Cooperative Research Program of matching grants for research in economic sectors where California is or soon will be a worldwide leader, such as semiconductor manufacturing and biotechnology. In 1999, the program was expected to grant $55 million to UC faculty researchers. Atkinson has written, "UC plays a critical role in research as it affects the economic vitality of California. UC will not become a 'job shop' for industry and will not compromise the quality, independence or breadth of its research enterprise. What we will do is explore new forms of collaboration with industry to bring UC's tremendous intellectual resources to bear on stimulating productivity and economic growth." And at UC Davis, two new programs are under way: Connect, designed to help local new businesses succeed by pointing them to research partnerships, employees and business advisers, and a Technology Transfer Center based right in Davis, instead of at UC headquarters in Oakland.