Innovation in an era of AI

Peter Kotsonis on five management techniques shaping health care commercialization

By Laurel Skurko

Innovation in health care is often discussed in terms of pipelines, efficiency, and return on investment. But at UCSF, innovation unfolds in a very different context. It happens in close proximity to patients and families confronting rare or life-threatening conditions, where success and failure are not abstract. The UCSF Innovation Ventures team manages innovation with a sense of urgency that stems from this understanding. In the conversation that follows, Peter Kotsonis, PhD, associate vice chancellor of UCSF Innovation Ventures, shares how his team is evolving its approach to commercialization, balancing the availability of new AI tools with market realities and a deep responsibility to patients. His perspective highlights how teams are rethinking management practices to get new technologies to the patients who need them more effectively.

“It comes from institutional support and our mission—advancing health worldwide,” Kotsonis said. “This is not just an afterthought. Our leaders believe in innovation, and they foster the culture and ecosystem that allow our investigators to make important discoveries.”

UCSF Innovation Ventures is the team responsible for translating the original research conducted at UCSF into real-world products. They operate in the field of technology transfer, one of more than 200 large research universities nationwide that systematically translate academic discoveries into real-world products and services. At UCSF, well-known successes of the technology transfer office include the development of the Hepatitis B vaccine, which the team helped nurture from concept to product to market. Each year, the team of 40 people at UCSF Innovation Ventures receives approximately 250 patent disclosures, of which roughly a third are candidates to be prioritized for advancement toward commercialization. While the healthcare implications of this work are significant and include both qualitative and quantitative outcomes, the financial impact alone is also meaningful, estimated at about $30 million a year in licensing fees and startup equity annually that returns to the university and is reinvested in additional research. While UCSF is the second-largest recipient of National Institutes of Health funding, receiving approximately $800 million per year, these internally generated funds traditionally play an important complementary role in supporting ongoing research.

Kotsonis has been with the organization since 2013 and has seen how its approach to innovation management has evolved over time to meet changing market dynamics. Throughout the conversation, he underscored the importance of leadership.

Kotsonis also described how recent shifts, including the arrival of senior leaders from industry, such as David Morris, PhD (2023) and Barry Selick, PhD (2018), as well as recommendations issued by the University’s Regents in 2021, have improved the strategy and the bottom line. These changes emphasized: (1) modernizing our systems like patent tracking; (2) the cultivation of a stronger culture of innovation through recognition; and (3) the adoption of industry best practices to move viable products to market, from “bench” to “bedside.”

Kotsonis shared a set of concrete management changes he, David Morris, PhD, vice chancellor of Business Development, Innovation and Partnerships, and the team are implementing in partnership with Aenor Sawyer, MD, the executive director of Innovation and Entrepreneurship, to optimize both institutional return on investment and speak to UCSF’s core mission. Together, these changes reflect a systematic effort to align culture, incentives, and resources in support of long-term innovation.

Five management techniques shaping innovation at UCSF:

1. Leadership support grounded in mission and long-term ROI
2. Earlier identification of promising technologies
3. AI-enabled evaluation and decision support
4. Infrastructure for transparency and institutional learning
5. Leadership-aligned capital to support risk-taking

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5 Management principles (Details)

1. Leadership vision. The team is intentionally curating its innovation portfolio as balanced against what the investors are willing to invest in. This also includes investing in innovations that may be smaller in scale but have an outsized impact by addressing unmet needs in underserved patient populations. Those opportunities should be supported, and we can together define the path to the patient.
2. Moving upstream. Rather than waiting for discoveries to mature organically, the team is adopting more proactive and creative methods to surface high-potential research earlier in the lifecycle, increasing the likelihood of successful translation and commercialization. These methods include attending UCSF’s town hall meetings, faculty departmental presentations, and reviewing grant submissions to scan for new technologies that may be able to solve an unmet market need.
3. New AI Tools. With roughly 3,000 principal investigators and 10,000 other clinical staff developing solutions across the institution, the team is deploying AI-supported approaches to help review, prioritize, and de-risk a large volume of initiatives. Additional AI tools also assist with elements of the complex negotiation process, where scientific, clinical, regulatory, and market criteria must be balanced to improve the chances that a product both serves patients and succeeds long term.
4. Real-time analysis and information-sharing. The team has developed a proprietary database that provides leaders with real-time visibility into the innovation pipeline, from early discovery through commercialization and revenue generation. In parallel, a new patent-tracking system is being implemented on a systemwide basis to enable similar transparency, coordination, and collaboration across the broader University of California ecosystem. These programs will allow leadership and other stakeholders the opportunity to provide insight on an immediate basis and thus be more responsive to the dynamic needs of the market.
5. Risk taking means requires funding. Kotsonis emphasized the importance of senior leadership that understands innovation requires sustained investment and tolerance for delayed, sometimes “lumpy” revenue streams and returns. This financial backing is often a prerequisite of adopting new strategies and investing in new approaches. UCSF’s chancellor plays a critical role by helping match institutional priorities with resources, both by making introductions to private donors and, in partnership with Barry Selick, PhD, by helping to create the Invent Fund, a $13 million fund designed to support early-stage research with long-term potential.

What stands out most is the way UCSF Innovation Ventures blends academic and industrial cultures, drawing on the strengths of both. The team balances mission-driven goals with ROI discipline, and creativity with process and information-sharing. This approach includes deliberately identifying emerging investigators—along with their perspectives on the underlying patient or “customer” problem—while also learning from established, in-market successes. It enables investment in solutions that may serve smaller patient populations or generate lower immediate returns, but deliver meaningful long-term societal benefit.

This work takes place on a campus where the consequences of innovation are visible every day—in the patients, families, clinicians, and researchers who share the same physical space. To meet this responsibility, the team is incorporating new AI-enabled tools alongside proven management practices and will continue to evolve its systems as technologies advance. In an environment where delays can mean lives lost, these tools and management principles help accelerate the path from bench to bedside—supporting the ultimate goal that guides every decision: getting life-saving therapies to patients who need them.