Minding the Demand: New Paradigms in Academic Technology ... · Interaction with global thought...

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Minding the Demand: Minding the Demand: New Paradigms in Academic Technology New Paradigms in Academic Technology Commercialization and LicensingCommercialization and Licensing

Borys ChaburskyBorys ChaburskyPresident of SHI ConsultingPresident of SHI Consulting

February 14February 14 thth , 2007, 2007


Who we are and what we do at SHIWho we are and what we do at SHI

How does commercialization translate innovation into economic growth?

What about life science and technology transfer?

Why is technology transfer not delivering?

What can you do?... Models for technology transfer

What are the opportunities for technology transfer in Japan?

Take home messages


Creation and interim management of life sciences companies, multi-stakeholder partnerships and international consortia.

Completion of 300 life science assignments for over 150 clients in North America, Europe and Asia-Pacific over the past 6 years.

Development of business cases and implementation plans that have helped raise close to $300 million in financing from private- and public-sector.

Interaction with global thought leaders and decision-makers across the life sciences space.

Creation and/or facilitation of more than 40 public-private partnerships in biomedical research, infrastructure development and global health.

Hig

hlig

hts

of O

ur A

chie

vem

ents

SHI Is a Management Consultancy Specializing in the Life ScienceSHI Is a Management Consultancy Specializing in the Life Science ss

Increasing presence in big pharma, having worked with 5 of the world’s top 10 pharmaceutical companies.

Global presence in life sciences economic development/capacity-building, including a successful engagement in Mexico, Brazil & Asia.

SHI is a globallySHI is a globally --recognized management strategy consultancy speciali zing in recognized management strategy consultancy speciali zing in innovationinnovation --driven life sciences. We offer our clients in indus try, governmedriven life sciences. We offer our clients in indus try, governme nt, academia nt, academia and the notand the not --forfor --profit sector actionable strategies focused on impl ementationprofit sector actionable strategies focused on impl ementation

Asia is a key growth area for SHI where there are ample opportunities to bridge and transfer technologies from North America and the EU.


SHI Also Comprises of a Broader Portfolio of Interc onnected CompSHI Also Comprises of a Broader Portfolio of Interc onnected Comp aniesanies

SHI Group combines multidisciplinary expertise and perspectives SHI Group combines multidisciplinary expertise and perspectives through an through an interlinked group of companiesinterlinked group of companies

Strategy through implementation

� Consulting services

� Transactional services

� Operational services

SHIConsulting

SHIConsulting

PortfolioCompany/

Client

PortfolioCompany/

Client

SHI LinkSHI Link

SHICapital

SHICapital

SHI Economic

Development

SHI Infrastructure


Who we are and what we do at SHI

How does commercialization translate innovation int o economic grHow does commercialization translate innovation int o economic gr owth?owth?



What do you do?... Models for technology transfer


Take home messages


Technological Innovation Impact Economic Growth and ProsperityTechnological Innovation Impact Economic Growth and Prosperity

Size of bubbles represent relative per capita GDP (2002); numbers within bubbles indicate growth (%) of per capita GDP from 1998 to 2002. Source: World Economic Forum, 2005, OECD, 2005 and United Nations, 2005.

Hum

an D

evel

opm

ent I

ndex

(H

DI,

2003

)

Growth Competitive Index (2005)

High/LowHigh/Low

Low/LowLow/Low

High/HighHigh/High

Low/HighLow/High

3.5 6.0

US

Sweden

Australia

Canada14

14Finland

16

17

21

Portugal20 Korea (Rep)

39France16

Japan

TurkeyMexico

14-1

0.75

1.00

It is no surprise that the most competitive/innovat ive economiesIt is no surprise that the most competitive/innovat ive economies in the in the world have the highest quality of life world have the highest quality of life

2


However, Investment in Innovation Does not Lead to Prosperity PaHowever, Investment in Innovation Does not Lead to Prosperity Pa ssivelyssively

Example: Canada has a higher proportion of tertiary education atExample: Canada has a higher proportion of tertiary education at tainment tainment than Irelandthan Ireland ……

05

1015202530354045

Hunga

ryAus

tria

Irelan

d

United

King

dom

Austra

liaSwed

enJa

pan

United

Sta

tes

Canad

aP

ropo

rtio

n

Tertiary Education Attainment forAge Group 25-64 (2004)Unemployment Rate of UniversityGraduates (2003)


Investment in Innovation Does not Lead to Prosperit y PassivelyInvestment in Innovation Does not Lead to Prosperit y Passively

0

10

20

30

40

50

60

Germ

any

Spain

Irelan

dCan

ada

Franc

e

Sha

re o

f Sal

es (

%)

0

1

2

3

4

5

6

7

WE

F In

dex

Innovative Products

WEF Ranking

……but this is not matched in their share of sales for innovative pbut this is not matched in their share of sales for innovative p roducts. roducts.

What is the missing link?

Commercialization!Commercialization!

It is evident that having a greater supply of innov ation potential is not sufficient…


A Question of Balancing Market Forces: Supply of Re search and DeA Question of Balancing Market Forces: Supply of Re search and De mand for products mand for products

Converting innovation into prosperity requires an a ctive Converting innovation into prosperity requires an a ctive alignmentalignment of:of:

Human Talent Human Talent ●● Research Research ●● CapitalCapital

Aligning the market forces is an active process that requires political will and dedicated resources

“Innovators… … make ideas … … a reality.”

TalentTalent ProsperityProsperity

Angel

EntrepreneurshipEntrepreneurship

ResearchResearch

Early-stageVenture

IPO

Late-stageVenture

Scientists

ManagersEntrepreneurs

Engineers

Investors

InnovatorsCompetitiveness

Productivity

ideasideas

opportunitiesopportunities

innovationsinnovations




What about life science and technology transfer?What about life science and technology transfer?




Take home messages

Life Science and Biotechnologies are one of the most strategic industries for driving future economic gr owth


Technology Transfer in Life Science: A Unique Indu stry!Technology Transfer in Life Science: A Unique Indu stry!

Life Science is one of the fastest growing sectors of Life Science is one of the fastest growing sectors of the economythe economy

Latest advances in molecular biology (including the sequencing of the human genome) and the convergence of information technology with life science are revolutionizing medicine

The biotech industry is an important economic driver

$6.4 B

4,171*

464

$0.82 B

Japan

$13.8 B

7,440

470

$1.7 B

Canada

$5.0 B

6,393

226

$1.0 B

Australia

$25.6 B$458 BMarket Capitalization

32,470146,100Number of Employees

1,8781,473Number of Companies

$7.5 B$59.5 BSales/ Revenue

EuropeUSA

*Japan: Public companies only Source: Burrill

In the US alone, US$35 Billion 1 was raised for biotech ventures in 2005.

1 Source: Burrill Quarterly Report



While top biotechnology firms thrive, the biggest While top biotechnology firms thrive, the biggest pharmaceutical players are enduring diminishing ret urnspharmaceutical players are enduring diminishing ret urns

IBM Life Science Solutions; as cited in Burrill & Company, Laguna Niguel 2005

5 Year Annualized Total Shareholder Returns (TSR)

% TSR to Mar 98 % TSR to Sept 02

5 Year Annualized Total Shareholder Returns (TSR)

% TSR to Mar 98 % TSR to Sept 02



The decreasing returns of top The decreasing returns of top pharmaspharmas , due to loss of patent , due to loss of patent protection for key products and a long regulatory a pproval protection for key products and a long regulatory a pproval process, creates an attractive environment for lice nsingprocess, creates an attractive environment for lice nsing

Average Phase 1 total deal terms increased from $25 million to over $120 million between 2000 and 2004


Licensing SuccessLicensing Success

Scripps Institute - Pfizer research pact

Under this agreement…

• Pfizer pays Scripps Research Institute $20 million a year for 5 years for research endeavours

• In exchange, Pfizer benefits from the first right t o license for new discoveries coming from Scripps Research Instit ute

• Scripps Institute stand to earn milestone payments and royalties on any approved products

Industry Academiafinancing

• Innovative technologies

•Product development

• Royalties, milestones

• Reinvestment in research



AndAnd ……

Average pre-clinical total deal terms increased from $30 million to over $80 million between 2000 and 2004



Even moreEven more ……

Average discovery total deal terms increased from $30 million to over $75 million between 2000 and 2004


Technology Transfer Offices Must Deal with Though M arket RealitiTechnology Transfer Offices Must Deal with Though M arket Realiti es es

DiscoveryProof-of-concept

ProductDevelopment

Market-readyProduct

MarketedInnovation

Rel

ativ

e Le

vel o

f Inv

estm

ent

Then, why do investors resent investing in early te chnology? Then, why do investors resent investing in early te chnology?

This is the battlefield of academic technology transfer

offices



For traditional biopharmaceuticals, it takes 10,000 leads to get 1 FDA approved product

Developing a new compound costs on average - $800M and takes 10 to 15 years

Life scienceLife science ’’s ventures are high risk endeavorss ventures are high risk endeavors ……

Drug discovery needs to use sophisticated risk mana gement techniques and undertake a portfolio management app roach





Why is technology transfer not delivering?Why is technology transfer not delivering?



Take home messages


Why is Technology Transfer not Delivering? Why is Technology Transfer not Delivering?

If the science is good it will sell by itself

There are Myths about Technology TransferThere are Myths about Technology Transfer

Discoveries need to be communicated and sold to potential investors/partners

Demystifying Technology

Transfer

MYTHS:

Innovation comes first and their application second

Technological Transfer is a transactional function

REALITY:

Successful innovations are driven by market demand

Technology Transfer is a strategic function


The need to focus investments on a successful few in the presence of a multitude of innovation possibilities

The need to relatively rank the commercialization value of different applications within an organization’s IP portfolio

The need to define the best commercialization path for a particular technology

Technology Transfer as a Strategic FunctionTechnology Transfer as a Strategic Function

Technology transfer offices need to take a pro-acti ve approach to commercialization ●

Moving from a solely PUSH approach to a PULL approa ch that is market-driven


Underlying Vision / Communication:

Clusters require communication and coordination around a consistent investment and market access strategy to support company creation, attraction, and retention.

Underlying Vision / Communication:

Clusters require communication and coordination around a consistent investment and market access strategy to support company creation, attraction, and retention.

Success requires a well balanced approach among all factorsSuccess requires a well balanced approach among all factors

PUSHPUSH--PULL Innovation Model PULL Innovation Model

Similar to a traditional value chain, the innovatio n developmentSimilar to a traditional value chain, the innovatio n development cycle has valuecycle has value --adding activities that lead to innovation based pro ducts and seradding activities that lead to innovation based pro ducts and ser vices.vices.

Market Conditions

PULLPULLPULL

Product and Business

Development

Manufacturing and Support Industries

Market Access

Market Conditions – PULL:Receptor capacity (i.e. established industry players) pull new technology through development, to production, to market, with the support of business development and public private partnerships along the way.

Market Conditions – PULL:Receptor capacity (i.e. established industry players) pull new technology through development, to production, to market, with the support of business development and public private partnerships along the way.

KnowledgeCreation

PUSHPUSHPUSHFundamentalResearch and

Discovery

Technology CreationSeed Funding

Company Formation

Financing andTechnology

Development

Knowledge Creation – PUSH:

Fundamental research and discovery, produce technology, supported with seed funding, and transferred to a commercial entity for additional financing and development.

Knowledge Creation – PUSH:

Fundamental research and discovery, produce technology, supported with seed funding, and transferred to a commercial entity for additional financing and development.






What do you do?... Models for technology transferWhat do you do?... Models for technology transfer


Take home messages


Effective Technology Commercialization Requires an Integrated ApEffective Technology Commercialization Requires an Integrated Ap proachproach

Licensing toIndustry Spin-off

Com

paniesInno

vatio

n

Management& Tech Transfer

Capital

Part

ners

hip

Opp

ortu

nitie

s

Licensing to Industry

Spin-off Companies

Partnership Opportunities

Management, Opportunity Evaluation &

Technology Transfer

Capital Sourcing

Innovation Strategy

How do you bridge the gap between internal capabilities and external opportunities?

Commercialization and licensing successes require a 360Commercialization and licensing successes require a 360°° approach, as well as approach, as well as diversity and flexibility diversity and flexibility


Technology Commercialization Is a MultiTechnology Commercialization Is a Multi --Sector CollaborationSector Collaboration

BRING•Scientific expertise and insight

•Innovative technologies and discoveries

BRING•Scientific expertise and insight

•Innovative technologies and discoveries

BRING•Business perspective on innovative ideas

•Strategic direction

BRING•Business perspective on innovative ideas

•Strategic direction

BRING•Investment in research, infrastructure, talent

•Policy development

BRING•Investment in research, infrastructure, talent

•Policy development

BRING•Perspective on consumer needs

•Human capital

BRING•Perspective on consumer needs

•Human capital

ACADEMIAACADEMIA

GOVERNMENTGOVERNMENT

INDUSTRYINDUSTRY

NON-PROFIT ORGANIZATIONS

NON-PROFIT ORGANIZATIONS

GAIN•Social and economic prosperity

GAIN•Social and economic prosperity

GAIN•Access to resources•Strategic directions•Financial rewards

GAIN•Access to resources•Strategic directions•Financial rewards

GAIN•Commercialization opportunities

•Insight and influence on future policy

GAIN•Commercialization opportunities

•Insight and influence on future policy

GAIN•Increased ability to meet the needs of stakeholders

GAIN•Increased ability to meet the needs of stakeholders

Optimized Commercialization

System

●

Leverage Talent

Research

Capital

Commercialization is a priority in which all sector s of the econCommercialization is a priority in which all sector s of the econ omy omy ––industry, government, academia and fourthindustry, government, academia and fourth --pillar organizations pillar organizations –– have have an important stakean important stake


TorontoToronto ’’s s BioDiscoveryBioDiscovery Regional Innovation Network actively encourages Regional Innovation Network actively encourages commercial involvement in academic research commercial involvement in academic research

BioBio --DiscoveryDiscovery

CentreCentre

Case Study: Technology Transfer Model Case Study: Technology Transfer Model



The development of an interdependent research and c ommercializatThe development of an interdependent research and c ommercializat ion ion strategic plan by SHI for a leading transport medic ine organizatstrategic plan by SHI for a leading transport medic ine organizat ion.ion.

CHALLENGE

• Identify R&D focus

• Capitalize on R&D for revenue creation

• Create an organizational infrastructure to sustain research and commercialization as a single innovation strategy

IMPACT

Solidify the organization’s position as leaders in transport medicine both in terms of the quality of patient care and as an innovator in the industry

RESEARCH & DEVELOPMENT

• Pursue research targets aligned with market needs

• Establish research partnerships

COMMERCIALIZATION/ TECH TRANSFER

IP

Revenue

• Prioritize near-term commercialization targets for quick wins

• Stepwise creation of tech transfer organizational infrastructureR&D

Advisory Board

•Externally focused

•Pulse on market



The evaluation by SHI of the commercialization pote ntialThe evaluation by SHI of the commercialization pote ntial of the cancerof the cancer --related IP portfolio at a major US academic institu tion related IP portfolio at a major US academic institu tion

High

Hig

h

Sci

ence

& T

echn

olog

y

Market Attractiveness

1

2

3

456

7

8

9

IPIP

Technology Assessment & Prioritization

Technologies were evaluated on their technical merit and commercial potential

Large IP portfolio•Enable go/ no-go decision making to streamline IP portfolio

•Enable optimum allocation of commercialization efforts

Accelerated and Targeted

Commercialization







What are the opportunities for technology transfer in Japan?What are the opportunities for technology transfer in Japan?

Take home messages


Opportunities for Technology Transfer in Japan Opportunities for Technology Transfer in Japan

Japan is the second largest biopharmaceutical market in the world (projected to reach $230B by 2010 )

Number of Alliances by Japanese pharmas

66

68

86

0 20 40 60 80 100

2003

2004

2005

+26%

The Emerging Japanese The Emerging Japanese biotechsbiotechs are the burgeoning recipients are the burgeoning recipients of commercialized academic innovationof commercialized academic innovation

The Japanese biopharmaindustry is undergoing awave of alliances

Japanese biopharmaceutical companies are partnering, combining, and developing further international presence


Opportunities for Technology Transfer in Japan Opportunities for Technology Transfer in Japan

Deregulation in the Japanese environment will increase entrepreneurship in Japanese academic institutions

30% of interviewed Japanese VCs cited healthcare as an area of interest for the future. They too will seek industry-grade dealings

The Japanese environment dynamics are likely to inc rease The Japanese environment dynamics are likely to inc rease demand for commercialized academic innovation by bo th local demand for commercialized academic innovation by bo th local and nonand non --Japanese companies Japanese companies








Take home messagesTake home messages


Take Home Messages Take Home Messages

ActionsActions and pro-active commercialization is needed to translate Innovation into ProsperityInnovation into Prosperity

111

222

333

444

555

666

777

Effective Commercialization/licensing is a matter of Balancing Balancing Market Forces: Supply and DemandMarket Forces: Supply and Demand

Technology Transfer Offices must move from a PUSH approach only to a PULL approach that is marketPULL approach that is market --drivendriven

Effective Technology Commercialization Requires an Integrated Integrated ApproachApproach

Technology Commercialization Is a MultiMulti --Sector CollaborationSector Collaboration

The emerging Japanese The emerging Japanese biotechsbiotechs are a burgeoning recipient for commercialized academic innovation

The Japanese environment dynamics are likely to increase demand for increase demand for academic innovations academic innovations by both local and non-Japanese companies


Take Home Message Take Home Message

Making innovation a creator of prosperity requires a ProMaking innovation a creator of prosperity requires a Pro --ACTIVE ACTIVE commercialization processcommercialization process

Pro

sper

ity

Growth Competitive Index

Commercializatio

n &

Licensing

Proactive approachesProactive approaches

Integrated systemsIntegrated systemsDemand PULL Demand PULL

Challenging the myths Challenging the myths

Seize the growing Seize the growing opportunities in opportunities in

Japan Japan


310310--162 Cumberland Street 162 Cumberland Street || Toronto, Ontario Toronto, Ontario || Canada Canada M5R 3N5M5R 3N5TT 416.236.1054 416.236.1054 FF 416.236.2801 416.236.2801 wwwwww .shiconsulting.com.shiconsulting.com


Licensing Success Licensing Success

• MIT Technology Licensing Office (2006 fiscal year)

� 121 U.S. patents issued, 97 licenses granted

� $42.3 M in royalty payments from licensing deals

� Success stories include licensing deals with major biotechnology/ pharmaceutical companies- Promega and Genzyme.

• Reastasis- A New Treatment for Dry Eye

� Technology developed by University of Georgia for veterinary use(1990)

� Licensed by KB Vision Inc. for further development

� FDA approval for human use received in 2003

� To date, generated more than $28 million in licensing royalties from veterinary and human application of this technology

Minding the Demand: New Paradigms in Academic Technology ... · Interaction with global thought...

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