What becomes of major breakthroughs at universities?

Let’s say that you have a team of researchers at University of Chicago and they find some chemical cocktail that makes cancerous cells revert to being normal cells. Yay! A cure for cancer! But what’s the usual route it takes to become something sold in pill form by some major pharmacutical company? I know there’s all sorts of testing and whatnot to be done but I’m more curious about patenting rights, who gets paid, etc than the medical/scientific end.

Do research universities sell off the rights to their discoveries? Do they enter the public domain so no one can patent the afore mentioned cockatail? Are they licensed?

University of Wisconsin uses the Wisconsin Alumni Research Foundation (WARF ) for technology transfer:

Here is the University of California’s Patent Policy. And here, actually, are links to the University of Chicago’s policies on same. Essentially, it looks like in both cases, the University owns the patent on whatever it is and licenses it appropriately; but the inventor gets a certain return on her inventiveness (though how much that amounts to is probably left vague.)

Here’s the split through WARF (as of 2001):