Commercializing research from the Children's Hospital of Philadelphia is nothing new. One of its biggest hits is a rotavirus vaccine now sold by Merck.

But the world of spin-out companies feeding dollars back into the CHOP research machine is new, and that's why the hospital is partnering with the Bala Cynwyd-based Osage University Partners.

"For us, any royalties or dollars that will come back to CHOP go right back into research to find different cures, and new cures, and treatments that can improve the health of children," said Ellen Purpus, the director of CHOP's technology transfer office.

CHOP and Osage will split future returns from investments in hospital spin-outs. Purpus says Osage will get a larger share, since these are early stage companies with plenty of risk built in.

For CHOP, she says, the partnership represents a new potential revenue stream. "For the investigators," Purpus said, "it's an opportunity to see their discoveries actually being developed into products that hopefully will improve lives and improve the health of children and other folks."

Bill Harrington, a managing director at Osage University Partners, says CHOP is the fund's first partner institution focused primarily on pediatric medicine. Osage works with 60-plus research centers, including Drexel and Penn.

"One of the things that drew us to CHOP is that the type of research and the work done there is relatively unique among medical centers and institutions that we have talked to and have partnered with in the U.S.," Harrington said.

CHOP and Osage representatives both say they're excited by the prospect of pumping more discoveries into the clinical marketplace.