On the fifth floor of a nondescript building on the University of Minnesota's East Bank campus, students can watch live surgeries on a high-definition TV screen.

Just down the hallway, a technician from the school's supercomputing program demonstrates advanced software that creates three-dimensional models of human organs based on MRI scans. Another room offers students equipment to build prototypes of medical devices that could one day launch the next Medtronic.

U officials say the new $400,000 Medical Devices Center, located on the top floor of Shepherd Labs on SE. Union Street, will be a hub for faculty, students, and companies to translate high-concept research into high-paying jobs and a thriving medical industry.

"As a grad student, this is an [ideal] facility to come and work," said Ryan Buesseler, a Ph.D. student in mechanical engineering. "All of the tools to create medical devices, right here."

The devices center is only the latest effort by the university to close the gap between business and academia -- a challenge that has long prevented the school from fully realizing the financial rewards from its own intellectual property. From 1984 to 2004, the U managed to spin off only three companies that eventually went public, and the 20-year effort generated just $9 million for the school.

Last year, state officials, the Mayo Clinic and the university inaugurated a $25 million, three-story genomics research facility at a Mayo building in Rochester. The collaboration, called the Minnesota Partnership for Biotechnology and Medical Genomics, hopes to speed the research and commercialization of projects such as anti-cancer drug development and treatments for heart disease, Last month, the Legislature approved a university request to issue $292 million in revenue bonds to build four bioscience research buildings.

In some ways, the Medical Devices Center addresses what some see as one of the most glaring problems at the university. Despite a world-class medical school that pioneered open heart surgery and developed the battery-powered pacemaker, little of the U's medical technology in recent years has successfully made its way into the market.

"A lot of inventions take place at the U but don't go anywhere," said Gerry Timm, an associate director for external relations at the school's Institute for Engineering and Medicine. "Nobody knows about it."

Part of the problem is that the U's enormous size makes collaboration difficult, said Art Erdman, a mechanical engineering professor and director of the Medical Devices Center.

"I see so much talent, but how do you bring all of these people together?" Erdman said.

The Medical Devices Center will put students and faculty from various programs such as the medical school and electrical engineering under one roof, he said. For instance, engineering students at the center can watch live surgeries performed at the medical school on a high-definition monitor. By observing the operation in 3D, the students can design better instruments by knowing how such tools interact with the human body.

The center is also launching a one-year fellowship program that will pair postgraduate engineering students with industry veterans and doctors to develop and test medical devices. Erdman says the center will partner closely with the school's Office of Technology Commercialization to see whether the inventions can be licensed or spun off.

"I think [that office] will play a critical role," Erdman said. "They need to be fed."

The U's patents on Ziagen, an anti-AIDS drug that generates 95 percent of the school's annual licensing income, will expire overseas next year and in the United States in 2013. That leaves the U scrambling to replace the more than $50 million in annual royalty payments that Ziagen now generates.

Of the three spinoffs the U wants to launch each year, it is hoped that two will come from the Medical Devices Center, said Doug Johnson, a former investment banker who heads the school's Venture Center.

"It's an excellent approach to focus U resources where the state of Minnesota has a very well-developed industry cluster," Johnson said. "The center is set up in such a way there is a lot interaction with the outside world."

Thomas Lee • 612-673-7744