K.U.Leuven Research & Development:

A model for exploitation of academic research

K.U.Leuven Research & Development

Edwin ZIMMERMANN

edwin.zimmermann@lrd.kuleuven.be

www.kuleuven.be/lrd

K.U.Leuven: facts & figures

K.U.Leuven

• founded in 1425

• 30.455 students with 12,4% international students

• 16.189 employees

– 1.396 professors & 3. 891 researchers

– 2.730 administrative and technical staff

– 8.172 employees at the University Hospital (UZ Gasthuisberg)

• Research expenditures (2003 figures):

– 201 million EUR (+13,6% compared to 2002)

– of which 40,6 million EUR (20,2%) contract research through K.U.Leuven R&D

• Complete university: 14 faculties

• Humanities, Exact Sciences, and Biomedical Sciences

K.U.Leuven R&D

Research Divisions:600 researchers (2003)

Industry

Contract Research

IPR & LicensingSpin-offs & Regional Development K.U.Leuven R&D

K.U.Leuven

K.U.Leuven Research & Development

• founded in 1972

• central multidisciplinary staff of 27 people

• operated as a business unit

• “to promote and support knowledge & technology transfer to the university”

Activities

• Contract Research

– negotiation & legal support with respect to research contracts between university and industry

• Management of Intellectual Property Rights

– an active patent and licensing policy is pursued

• Creation of Spin-off Companies

– professional advice and support is provided to academic entrepreneurs

• Promotion of High-Tech Entrepreneurship

– both within university and in region

Spin-off creation

• Support?

– awareness creation & knowledge transfer

– development of business plan

– finding investors: Gemma Frisius Fund K.U.Leuven

– finding infrastructure

• university labs, Innovation & Incubation Centre, science parks

– negotiation & legal support

• drafting bylaws, shareholder agreements and co-operation agreements

– supporting growth and internationalisation process

• participation in Board of Directors

• portfolio management is crucial

– support innovation & high-tech entrepreneurship through networking and technology clusters

Gemma Frisius Fund K.U.Leuven

• provides seed capital in the early phases of research-based K.U.Leuven spin-off companies

• established in 1997 as a joint venture between K.U.Leuven, the KBC group and the Fortis group

– GFF I founded in October 1997:

• 12,5 million EUR

• investment limit of 500 KEUR / project

• 10,5 million EUR invested in 15 spin-off companies (1997-2004)

– GFF II founded in July 2002:

• 12,5 million EUR

• investment limit of 1 MEUR / project

• 2 million EUR invested in 5 spin-off companies (2002-2004)

• partners:

– K.U.Leuven (20% of capital)

– Two banks: KBC Securities (40%) and Fortis Private Equity (40%)

Gemma Frisius Fund K.U.Leuven

• combining research & technology transfer expertise of the university with financial and investment expertise of financial partners

• not restricted to a specific technology. GFF considers every investment opportunity involving know-how coming from the K.U.Leuven

• invested amount per year (GFF I & II combined):

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

4.000.000

1998 1999 2000 2001 2002 2003 2004

Spin-off Creation Process

K.U.Leuven R&D

GFF Advisory Board

GFF Board of Directors

intake preparing business plan technological due diligence market positioning financial plan

financial due diligence investment advice iterative feed-back process

final investment decision

Spin-off Creation Process

• LRD Research Divisions

– research divisions embedded in university via matrix structure

• “virtual organisations” in which (groups of) researchers (from different faculties or departments) can group their applied research, commercial-industrial and exploitation activities.

Faculties, departments, research groups:international quality in research,

teaching performance

LRD divisions/projectsContract autonomy &flexibility incentives

Spin-off Creation Process

• LRD Research Divisions

– important role in the incubation process of a spin-off company …

• BEFORE START-UP

– first “market test” within “secure” environment of university, usually through contract research

– smooth transition from research division to spin-off company

– technology transfer in exchange for shares

– (usually) investment from (part of) division reserves in spin-off company

• AFTER START-UP

– partner for contract research

– input from university researchers => co-operation agreement

– possible use of university lab infrastructure

– … but clear distinction in focus and activities between research division and spin-off company after start-up.

• Incentive mechanism:

– Return through shares & warrants generate surplus value on shares

– Two types of shares:

• shares for capital investment

• shares for intellectual property (know-how, etc.)

– Valuation IP depends on various factors

• IP & contracts brought in

• patent portfolio

• time-to-market

• team

Spin-off Creation Process

Results

60 companies founded over the period 1979-2004:

– 25 companies over the period 1979-1997

– 35 companies over the period 1998-2004

Total No. of Spin-off Companies FOUNDED

0

10

20

30

40

50

60

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Results

51 active spin-off companies (end 2004):

– exploiting university research results

– total turnover of +/- 300 million EUR

– >1500 employees.

Total No. of ACTIVE Spin-off Companies

0

10

20

30

40

50

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Results

12,5 MEUR invested in 20 GFF portfolio companies (end 2004):

– 18 active portfolio companies

– 1 successful exit (trade sale)

– 1 divestment

012345678

1997 1998 1999 2000 2001 2002 2003 2004

GFF support in K.U.Leuven spin-offs

Started without GFF

Started with GFF

Capital increase with GFF

GFF Exits

Spin-off companies• Engineering

– LMS: computer aided dynamic analysis (acoustics, vibration, durability)– Metris: reverse engineering & 3D quality control– MEAC: microwave energy applications for industry– Materialise: rapid prototyping services (stereolithography, etc.)– Medicim: medical imaging solutions to support diagnosis and surgery– etc.

• Micro-Electronics & ICT– ICOS: vision and inspection solutions for the semiconductor and

electronics assembly markets– AnSem: design of analog integrated circuits– Ubizen: provider of managed security solutions– Eyetronics: 3D-image acquisition & processing– Data4S: data management, customer behavior profiling and pattern

detection– OMP: state-of-the-art antenna products & designs– Kimotion: EDA-tools for analog chip design– Hypervision, Epyc, Telraam: multimedia applications, e-learning

Spin-off companies

• Biomedical– Thromb-X: biopharmaceuticals for cardiovascular diseases &

technologies of embryonic stem cell cultures and transgenesis– 4AZA Bioscience: biopharmaceuticals for immune pathologies such

as transplantation rejection, rheumatoid arthritis and septic shock on the basis of new immune-inhibitors

– TiGenix: tissue engineering & cell-based therapies (repair of articular cartilage, bone & muscle)

– reMYND: services & tools to support drug discovery in Alzheimer’s disease and neuro-degeneration

– RNA-TEC: chemical synthesis & purification– AlgoNomics: structural bio-informatics– PharmaDM: global enabler of drug discovery analytic solutions, based

on mining integrated chemical, biological and clinical data

• Partners:

– LRD, research centres, city of Leuven, GOM, Flanders, etc.

• Infrastructure:

– Innovation & Incubation Centre

• 2400 m², 15-20 companies

• office & production space

– Science Park Haasrode

• 130 ha, 150 companies, +/- 6000 jobs

– Arenberg Science Park

• 110.000 m² office & lab space

• available from mid-2005 onwards

• state-of-the-art bio-incubator (end 2006)

– UbiCenter (old Philips-site)

– Campus Remy (old Remy-site)

Regional Development

Networking

• Horizontal Network: Leuven.Inc

• network organisation stimulating contacts between university, IMEC, high-tech start-ups, innovation actors, support activities such as consulting agencies and venture capitalists, and established companies in the Leuven area.

• Vertical Networks: technology clusters

– DSP Valley

• focusing on the design of hardware and software technology for digital signal processing systems.

– L-SEC (Leuven Security Excellence Consortium)

• international, non-profit network organisation dedicated to promote the use and advance of e-security.

Leuven – Knowledge Pearl

CONCLUSION

LRD as a Networked Incubator

LRD

GFF

Leuven.Inc

Science Parks

K.U.LEUVEN

REGION

FINAN CIAL

WORLD

INDUSTRY

• Success factors for the exploitation of academic research results in Leuven:

– Basis = a critical mass of high quality research

– Integrated approach on research valorisation: multidisciplinary team & “high value” services

– Clear incentives and policies to encourage research groups and departments to actively seek knowledge transfer opportunities

– Creation of appropriate entrepreneurial climate in a university context

– Legal context with respect to exploitation of academic research in Flanders region

– Developing the necessary instruments and networks for the further professionalisation of technology transfer support

Success Factors