Biotechnology Policy in South Africa Second International Workshop of the BRICS Project Rio de...

Biotechnology Policy in South Africa

Second International Workshop of the BRICS Project

Rio de Janeiro, Brazil

25-27 April 2007

Rosemary Wolson

Intellectual Property Manager: R&D Outcomes

Ph: +27-12-841-4301

Cell: +27-83-784-3648

E-mail: [email protected]

2nd BRICS WorkshopRio de Janeiro, Brazil25-27 April 2007 © CSIR 2006 www.csir.co.za

Outline

• Prospects for health biotech• Some (dated) biotech activity data• National Biotechnology Strategy• BRICs• Other sources of support & investment• Framework for IP from Publicly Funded IP• Conclusion

• Focus on the creation of biotech companies from universities and public research institutions


Prospects for health biotech in SA:the good news

• Innovative capacity• Sophisticated tertiary health facilities

• Albeit not universally accessible

• Wealth of plant genetic resources• Coupled in some cases with indigenous knowledge about medicinal

use

• Established application of traditional biotechnology in industry• Wine, beer, dairy, yeast

• Expertise in conducting clinical trials• Strong government support for biotechnology as a key

technology platform


But…

• Fragmentation• Little impact beyond the laboratory• Weak linkages• Limited skills base• Low investment

• From both the public and private sectors

• Few biotech entrepreneurs• Small local market size• Low patenting levels

• Complexity of the life sciences patent landscape• Expense of patenting internationally


Data on biotechnology activity: general

• Quantitave data out of date• National Biotechnology Survey 2003

• Over 1,000 biotech projects• 622 research groups• Academic/research institution/industry

• <1/2 = intended to produce a product or process to be applied in industry• Remainder

• Fundamental research• Potential to generate biotech applications but not main

objective• Biotech services


Data on biotechnology activity: companies

• 106 companies active in modern biotechnology• 47 considered “core biotechnology” companies

• Business substantially focused on biotechnology• 59 “non-core”

• Utilising biotechnology in some aspect of the business

• 39% in human health sector (40 companies)• Mainly private companies• Fewer than 50 employees on average• Majority located in the 3 main urban centres• Estimated that only ~10% of companies were conducting cutting-edge

R&D• More typically, new applications of lower-tech biotechnology were being employed

• Bioventures – first dedicated biotech venture capital firm• Initially R80m to invest


National Biotechnology Strategy (2001)

• Department of Science & Technology• Biotechnology Regional Innovation Centres

• “BRICs”

• 3 BRICs• Gauteng, KwaZulu-Natal, Western Cape

• + Plantbio – national remit• National Bioinformatics Network• Public Awareness of Biotechnology Programme• National Biotechnology Advisory Committee

• Established 2006 as a sub-committee of the National Advisory Council on Innovation (NACI) to provide high level advice to Minister

• R450m over first 3 years


BRICs

• Main agencies for implementation of Biotech Strategy• DST did not prescribe business model• Each BRIC therefore independently developed its own strategy

and approach according to its own focus areas• Human health, animal health, environmental, bioprocessing, industrial

• Attempts made to ‘pick winners’• Stringent assessment/due diligence - especially regarding IP

• Contractual terms include a royalty payment to the funding BRIC in the event of successful commercialisation• To facilitate ‘self-sustainability’• Unrealistic? Beneficial?

• Preference for technologies closer to market• Less risk• Few opportunities for universities to benefit (platforms)• How to maintain pipeline?


BRICs

• In 2006, move away from focus areas and towards more uniform KPIs and operating models, and better linkages between the BRICs

• Range of financing instruments• Grants, hard loans, soft loans, seed funding, venture capital• Preference for VC-type funding

• New companies have been established• Not sure how many?• Some are merely IP-holding companies, without employees or

facilities, contracting out what remains early stage research to the research institution which developed the IP


Other sources of support & investment

• Innovation Fund (DST)• Range of funding instruments supporting R&D at different stages of the value

chain• Patent Reimbursement Fund• Patent Incentive Scheme• Technical assistance• Policy development

• SEDA (Small Enterprises Development Agency) (DTI) incubators• eGoliBio (access to laboratories & pilot plants)• Acorn (business and commercialisation incubator services in the life sciences

and medical device sectors)

• Private sector investment in biotech still very low• Risk averse financial markets• Technology not well understood• SAIP Fund?


Framework for IP fromPublicly Financed Research

• Policy document released 2005 for public comment• Originally referred to as SA “Bayh-Dole Act”

• Bayh-Dole Act (1980) = US legislation enacted to remedy situation where government owned IP developed from federally funded research but was failing to commercialise it effectively

• No longer - & appropriately so

• Borrows from Bayh-Dole:• Public institution to own IP arising out of publicly funded research• Right to own in exchange for obligation to protect & commercialise• All IP must be disclosed to designated agency• Institution to own IP developed by its employees, subject to sharing in any

income generated as a result• “Walk-in”/“march-in” rights (public interest/product not available)• Encourages non-exclusive licensing, preferably to local and national companies,

and SMEs (+ Broad-Based Black Economic Empowerment companies in SA)


Deviations from Bayh-Dole

• B-D creates clarity for all parties – avoids protracted negotiations on IP ownership• But: no guidance in Framework on how to decide if 2 public organisations

involved• Funding agency can own• In some cases, even companies can own, if listed criteria about extent

and longevity of support are satisfied

• US government has never invoked its march-in rights• Ascribed by some as responsible for success of the measure• SA government has strongly indicated that it will exercise such rights

• Already building it in to its contracts although no legislation in force yet (Innovation Fund, DST)

• High proportion of industry funding for university research in SA• Over 50% for some institutions


Concerns• Because of government subsidies received by universities, part of

which goes to research support, for any research to be exempted, university will have to show that full costs of project have been covered from other sources

• Focus mainly on encouraging patenting• Other constraints in the value chain will have to be addressed• Lack of patenting/commercialisation culture in universities

• Lack of/incorrect incentives• Low number of invention disclosures

• Few local companies to come in as licensees

• Limited expertise for staffing tech transfer offices• Positive impact of B-D not universally agreed in US

• New Michael Crighton novel!!

• Hopefully pending legislation will be enabling and not too prescriptive, avoiding unintended consequences


In conclusion

• New policy initiatives go some way to addressing constraints in the system• Including HR development

• Too little information available on what is happening• Attempts to gather data are ad hoc, often using questionable

methodology• Too early to assess impact?• Time to start?

• System must have sufficient flexibility built in to allow adjustments in response to what’s not working

• Sufficient support for early stage research to ensure a pipeline of new opportunities must not be neglected

Biotechnology Policy in South Africa Second International Workshop of the BRICS Project Rio de...

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