Exploitation of research results :
From research to business
Nathanaël Ackerman
ENVIMPACT Project Training
19 March 2013, WARSAW (Poland)
19/03/2013 Warsaw
© Brussels Enterprise Agency
Outline

From Research to Business :
–
–
Knowledge / Technology Transfer at a glance
Business Planning, Licensing and spin-off creation basics

Intellectual Property, focus on patenting

Business Model of a Spin-off – a case study.





2
l
Context and Market trends
Evaluation of the market size
Licensing to Ipsogen
DNA-Vision integrates the value chain
Creation of Epsynomics
An Introduction to Knowledge
Transfer
Knowledge Transfer at a glance
RESEARCH
INTELLECTUAL
PROPERTY
4
Top universities are top value creators
but their strategies differ
Universities protect
Intellectual property (IP)
essentially through
patents
Lawler A, University research. Steering Harvard toward collaborative science, Science, Jul 2008
5
But this is not all for the money !




Patent literature is huge and rich
Patents are taken into account in the international rankings
of Universities
Patents is a good key to open industrial’s door
Patents are also more and more taken into account in the
individual evaluation of academic profiles
And … probably the most important
6

How shall a new technology be useful ?
Licensing
Right of the owner
A patent owner has the right to decide who may - or may not use the patented invention for the period in which the
invention is protected. The patent owner may give
permission to, or license, other parties to use the invention
on mutually agreed terms. The owner may also sell the right
to the invention to someone else, who will then become the
new owner of the patent.
Once a patent expires, the protection ends, and an invention
enters the public domain, that is, the owner no longer holds
exclusive rights to the invention, which becomes available to
commercial exploitation by others.
8
Behind the words?...
Fundamentals of a license agreement.
Exclusive vs non-exclusive
Royalty rates?
Right to sublicense?
Scope?
Geography?
Determining financial terms of the license.
-
Royalty rates
-
Upfront
-
Milestones: when the patent is granted; when approval by FDA,
EMEA; when entering a large market (USA, EU, JPN); when entering
a new phase of development
-
Royalties minima
-
Sublicense rates
-
Option fee
From B. Van Pottelsberghe, A. Mathieu, GEST D
423 Innovation And Technology, Solvay Brussels
School of Economics and Management, ULB, 2009
9
9
Behind the words?...
Meeting the company and entering
negotiation process. Takes a long time!
the
From B. Van Pottelsberghe, A. Mathieu, GEST D 423
Innovation And Technology, Solvay Brussels School
of Economics and Management, ULB, 2009
10
10
Spin-off creation
Big steps towards creating a spin-off
Research and
Development
Business
Planning
Funding
Creating a
spin-off
Strategy
Scientific Board
Administration BOARD
Implements
Basic structure :
where are you ?
the strategy
Direction
Management team
Advisory Board
Some vocabulary :
President = Chief of the Board
CEO = Chief Executive Officer
CTO = Chief Technology Officer
CSO = Chief Scientific Officer
CMO = Chief Marketing Officer
12
Creating the spin-off is not the end …
Seed
Start-Up
Early
development
Expansion
Maturity
Renewal
…
…
13
The Business Plan
Management Team
Opportunity
Market & Industry
Milestones
Stages
Strategy
Vision
Risk analysis
Plan B
Production &
Supply Chain
Sales &
Marketing
Research &
Development
Organization &
Administration
Financial Plan
Financing
scheme
Sensibility
analysis
Business Plan
•
•
•
•
•
•
•
•
•
•
the team
the opportunity
the environment : market analysis
the product
the strategy and business model
Production
Marketing and sales
R&D
Management structure
Financial Plan
Not a linear process !!
15
What can be done today ?
(during a R&D project)
Market analysis
•
•
•
•
•
•
Need of the market
Who is the client ?
Size of the market
What is the structure of the market ?
What are the trends ?
Big players : partnership and competition
16
Example : Market Analysis for Respiratory and Anaesthetics
“The Respiratory and Anaesthetics market is a highly mature, consolidated sector with
the top 3 global players representing 80% of the overall $1.3 billion market size.
GE Healthcare, Dräger Medical and Philips dominate the individual markets
covered in this report with similar market shares as observed on a global scale. See
Figure 11. Barriers to entry are medium in this sector. The market is highly
consolidated as shown above. This allows large players to meet a demand which is
increasingly in search of highly integrated systems. This implies the company is
able to obtain a wide variety of different components, while maintaining a
significant development activity in-house to design new products. Also, the ability
to offer an appropriate set of after-sales services (e.g. training, maintenance) is
key to a company’s success. Being competitive in this sector requires relatively
high capital requirements and the critical mass to allow for a favourable bargaining
position as a purchaser of multiple components.” (Source : UK Sector
Competitiveness Analysis of Six Healthcare Equipment Segments, report prepared
by Arthur D. Little Limited for the Department of Trade and Industry, May 2005)
17
Example : Who are the big players ?
18
Define the product(s) and service(s)
•
•
•
•
•
Criteria
Differentiation
Life Cycle
Possible diversification
SWOT Analysis
• Strength
• Weakness
• opportunities
• Threats
19
Business model :
How to make money of it ?
Examples
• Google : How does Google earn money ?
• Big retail industry : Do you believe Wall Mart or Carrefour
earn money on the margin they get from your payment ?
• Open source software ?
20
An excellent Introduction to Business Modelling :
Business Model Generation
• Crowdsourcing (open source forge)
• Crowdfunding
• Product converted into « integrated solution »
(a.o. mobility)
• commodities (a.o. « cloud »)
Typical curve
(Financial Plan)
Evolution de la trésorerie
800.000
600.000
400.000
200.000
0
T1- T2- T3- T4- T1- T2- T3- T4- T1- T2- T3- T4- T1- T2- T3- T4- T1- T2- T3- T4-
Série1 521 434355 312 253 230264 300 332367 398 432462 494 523 554581 611 637666
Vocabulary :
initial investment, cash burning, dead valley,
time-to-market, break even, return on investment
22
Main sucess factors: Cash constraint
Objective : crossing the Cash-Flow « valley of death »
Nathanaël Ackerman - ULB - From
Research To Business - Strategies for
Cancer Genomic Data Analysis - Mexico,
5th of June 2009
Source: « Spin-out creation and financing » - Marc Lambrechts, Capricorn Venture Partners
– Jan. 2009
23
The Perfect Business Plan?
• A dream team: capable, experienced, committed, adaptable and trustworthy
• A unique offering with a proof of concept
• An in-depth market research section (i.e. incl. demand, industry and competition)
• Focus on one niche market and a strong Sales & Marketing plan
• Focus on the core business
• Ambition and realism
• Clear milestones
• Ready for execution
• Strong governance
• Risks analysis and Plan B included
• Financial plan based on a limited set of benchmarked assumptions
• Keep it simple
Investors will add:
• Fast and scalable business model
• Clear exit strategy
Research
IP
Protection
Proof-ofconcept
Business
Plan
Licensing
Fund
Raising
Company
Incorporation
Intellectual property
All is about IP ! How to protect it ?
• Secrecy
– confidentiality agreement with external potential partners
• Patent Filing
– How to solve the dilemma publication versus patenting
• Copyrights
– Especially for softwares and databases
• Trade marks
• Authorship
– De facto right : distinction with patrimonial rights attached to the opus.
27
IP - Patent
A patent is an exclusive right granted for an invention, which is a product or a
process that provides, in general, a new way of doing something, or offers
a new technical solution to a problem. In order to be patentable, the
invention must fulfill certain conditions
A patent provides protection for the invention to the owner of the patent.
The protection is granted for a limited period, generally 20 years.
A patent is a legal title which protects a technical invention for a limited
period. The patent enables its owner to exclude others from exploiting the
invention in the territory for which it has been granted.
Patents are always published, so that everyone can benefit from the
information they contain.
Patent protection means that the invention cannot be commercially made,
used, distributed or sold without the patent owner's consent. These
patent rights are usually enforced in a court, which, in most systems,
holds the authority to stop patent infringement. Conversely, a court can
also declare a patent invalid upon a successful challenge by a third party.
28
IP patent - criteria
An invention must, in general, fulfill the following conditions to
be protected by a patent. It must be of practical use; it must
show an element of novelty, that is, some new characteristic
which is not known in the body of existing knowledge in its
technical field. This body of existing knowledge is called "
prior art". The invention must show an inventive step which
could not be deduced by a person with average knowledge of
the technical field. Finally, its subject matter must be accepted
as "patentable" under law. In many countries, scientific
theories, mathematical methods, plant or animal varieties,
discoveries of natural substances, commercial methods, or
methods for medical treatment (as opposed to medical
products) are generally not patentable.
29
Exercice : Requirements for a patent to be granted
E-learning tutorial of the European Patent office
@ http://
www.european-patent-office.org/wbt/pi-tour/tour.php
Choose Topic 1 : What is a patent ?
Choose subject 2 : Requirements for a patent to be granted
30
Simplified Procedure to get a Patent
Fin de la phase PCT
Entrée en phase nationale
Dépôt
Prioritaire
Délivrance
nationale
Publication de la
demande de
brevet
… CA
(www.espacenet.com)
… JP
0
12
Date de priorité
18
30
Requête en examen
préliminaire
… EP
… US
… CH
Examen de fond
Avant le dépôt :
Démarches de valorisation
• Étude d’antériorité
• Déclaration d’invention
• Déclaration d’inventeurs
• Evaluation Potentiel économique …
? ~ 60
A US Patent delivrance
32
Patent information on the web
World Intellectual Property Organization (WIPO)
http://www.wipo.int/
Patentscope : http://www.wipo.int/patentscope/
European Patent Office (EPO)
http://www.epo.org
Espacenet : http://ep.espacenet.com/
United States Patent and Trademark Office (USPTO)
http://www.uspto.gov/
Instituto Mexicano de la Propriedad Industrial (IMPI)
http://www.impi.gob.mx/
And many others (INPADOC, REGISTER PLUS, …)
33
Exercice : Find the following patent on the web
use Patentscope : http://www.wipo.int/patentscope/
Title « Gene-Based Algorithmic Cancer Prognosis »
Inventors : Christos Sotiriou, Delorenzi Mauro, Martine Piccart
International Patent Classification : G06F 19/00 *
Priority Date : 13/05/2005
Application n°(US) 60/680,543
? What is it about ?
? Applicant :
? International Filing Date :
? Publication Date :
Application n° PCT/BE2006/000051
? Find where the patent has been applied for at the National Phase Entry
Phase.
*International Patent Classification : http://www.wipo.int/classifications/ipc/
34
35
Back to science : Histological Grade in Breast Cancer
Low Mortality
Grade 2
60%
?
High Mortality
36
Genomic Grade: A New Classification
Sotiriou C and Piccart MJ. Nat Rev Cancer. 2007 Jul;7(7):545-53.
Grade 1
Grade 2
Grade 3
Low Risk high Risk
Low Risk (50%)
High Risk (50%)
37
Relapse free survival of the patients
C. Sotiriou et al., Gene Expression Profiling in Breast Cancer: Understanding the Molecular Basis of Histologic
Grade To Improve Prognosis, Journal of the National Cancer Institute, Vol. 98, No. 4, February 15, 2006
38
C. Sotiriou et al., Molecular characterization of clinical grade in breast cancer
challenges the existence of « grade2 » tumors, Journal of Clinical Oncology, 2005
ASCO Annual Meeting Proceedings, Vol 23, N°16S, Part I of II (June 1 Supplement),
2005; 506
? Is this paper problematic for the patentability ?
39
Additional exercices
? Who is the owner of the Tamiflu (Oseltavimir) neuraminidase inhibitors
used in the treatment of virus infection; for how long ?
?  Who apply for a patent entitled « Method of transferring data being
stored in a database »; international application n° PCT/BE2008/000015
40
Some business basics
Licencing and company
incorporation
Evaluate the economic potential of a new technology
begins with a market analysis; analyzing patent activity
may be useful
?
How many patents have been applied for in a specific field ?
?
Who applied for these patents ?
?
Where to they ask for protection ?
42
IPC : C12Q 1/68
http://www.wipo.int/classifications/ipc/
Processes in which there is a direct or indirect qualitative or quantitative measurement or test of
a material which contains enzymes or micro-organisms or processes in which a material
containing enzymes or micro-organisms is used to perform a qualitative or quantitative
measurement or test, e.g. testing for antimicrobial activity or cholesterol, geomicrobiological
testing.
In vivo or in vitro or in silico measuring or testing processes involving nucleic acid e.g. nucleic
acid hybridisation including PCR (Polymerase Chain Reaction).
Compositions or test papers containing micro-organisms or enzymes which can be used to
detect or identify a chemical compound or composition, e.g. paper strips for the testing of blood
sugar.
Compositions or test papers distinguished by the use of indicators which can be used to detect
or identify the presence of micro-organisms or enzymes.
Processes of making such test compositions.
Processes involving enzymes or micro-organisms in which a process parameter is measured
and that or another process parameter is varied in response to such measurement, i.e.
condition responsive control.
43
International Applications by publication year
for IPC C12Q 1/68
Nathanaël Ackerman - ULB - From Research To Business - Strategies for Cancer Genomic Data Analysis - Mexico, 5th of June 2009
44
International Applications by Applicant
for IPC C12Q 1/68
45
BUSINESS MODEL OF A SPIN-OFF
Various kind of spin-off projects ?
Process & Main Actors
Research
Research
Dept
IP
TTO
Proof-ofconcept
TTO,
Incubators
Business
Plan
TTO,
Incubatords,
Entrepreneu
-rship
Center
Licence
TTO
Fund
raising
Investment
Fund
Spin-off
creation
Investment
Fund,
sharholders
Proof-of-concept
Proof-ofconcept
• There often exists a gap entre beteween an « academic » proof-of-
concept and a first « industrial prototype » et une version
« industrielle » => lower the industrial risk.
• Collaboration with an existing company
• Financing …
Proof-of-concept definitions
Proof-ofConcept
• "An approach used for demonstrating immediate business benefit, proving
feasibility and critical aspects of a solution, and to demonstrate value to the
business. The proof-of-concept has a well-defined scope and set of objectives."
• "A proof of concept is a short and/or incomplete realization of a certain method or
idea(s) to demonstrate its feasibility. The proof of concept is usually considered a
milestone on the way of a fully functioning prototype."
• "The proof-of-concept is defined as evidence that demonstrates that a business
model or idea is technically feasible and economically viable."
• "The proof of concept allows the development of intellectual property to take place
in a way which extends protection of that property; which extends applicability of
that property: which improves confidence in its anticipated commercialisation;
which underpins the validity of its claims and which demonstrates value. It is still
some way from"market" and "job creation" but fills that vital gap between early
"blue sky"research and market exploitation."
What is the Innovation Gap, and what causes it?
In a perfect world, strong technological concepts would always evolve into commercial reality. But that ideal is
relatively rare. Several obstacles make it difficult for valuable emerging research to transition out of the
laboratory and into the marketplace:
• Fear of risk. Even if a new technology addresses a market need, a level of risk remains around
implementation, which can prevent VCs and companies from participating. Today, especially, investors
demand relatively low-risk opportunities, and require proof-of-concept -- and sometimes even customers -before they are willing to sign on.
• Reduced funding. Economists generally agree that technological innovation has accounted for more than
half of America's economic growth since World War II. But US federal spending on basic and applied
research has fallen significantly (by 12% as a share of GDP between 1993 and 1997). Additionally, many
companies are responding to the growing pressure for short-term returns to stockholders, rather than
investing in long-term research.
• Financial limitations on small businesses. According to the Small Business Administration, America's 25
million small businesses account for 55% of America's innovations. But by their very definition, these
companies have limited resources for identifying and promoting untested technology.
• Disconnect between academia and marketplace. Universities owns thousands of pieces of intellectual
property, and thousands of companies can trace their roots to Universities-spawned innovation. However,
most faculty are necessarily focused on their disciplinary research, rather than commercialization, limiting
the likelihood that their innovations will make it to the marketplace.
Deshanpande Center for Technological Innovation @ MIT
Example : Hardware IP based case
Ground breaking technology for secret key generation based on the laws of quantum physics.
Laboratory experiment fully demonstrated
The technology is used to solve emerging problems in cloud computing.
In contrast to software, hardware development requires much more resources.
Potential customers are sceptic without a testable industrial version appliance …
… Potential capital “risk” investors require LOIs before injecting money.
Solution: Ask for proof-of-concept funding
Funding the entire prototype is too costly
Instead, we manage to finance the “core” of the appliance while the team
prospects potential customers with an downgraded OEM version based on
competitor’s technology.
Case Study : Epsynomics
A spin-off company delivering predictive kits for Breast
Cancer
Context and market trends
Breast Cancer Worldwide and in the EU
EU-25 351.680 new cases
132.433 deaths
1.000.000 new
cases
diagnosed
worldwide
in the year
2000
Adapted from P. Boyle, EBCC4, March 2004
55
The rates of treatment efficacy are
especially low in oncology
• Diagnostic testing can save
costly treatment and side effects
in patients that will not respond
• Efficacy can be increased
within subgroups receiving
tailored therapy
 Personalized medicine
M.G. Aspinall & R. G. Hamermesh, Realizing the promize of personalized Medecine, Harvard Business Review,
October 2007
Nathanaël Ackerman - ULB - From Research To Business - Strategies for Cancer Genomic Data Analysis - Mexico, 5th of June 2009
56
Personalized medicine is the solution to big
pharma's productivity crisis
No matter how much is spent on
R&D, ever fewer investigated drugs
are efficacious in enough patients to
reach the market.
•
personalized medicine: only treat
patients who will benefit
•
Use genomic technologies to predict
response to therapy in individual
patients
•
Trend: big pharma is changing its
research model by outsourcing R&D
to light-weight, creative partners
Owens ,"Big pharma slims down to bolster productivity." Nat Rev Drug Discov. 2007 Mar; 6(3):173-4
57
Treatment Decision-Making
Who can be
spared
therapy?
(prognosis)
Which
therapy
will work
best?
(prediction)
Adapted from C. Sotiriou, 2008
58
There were already many actors in the marketplace …
(partial view of the table)
Companies
Technologies
Agendia (2004)
Amsterdam, NL,
EU
Target
Output
Dvpt
Gene expression Breast ER+
prognosis
FDA
Genomic Health
(2000)
Redwood City,CA,
US
Gene
Expression
prognosis
FDA
Roche Diagnostic
Gene expression Leukemia
Diagnostic
Genetic
Lung, Breast, Prognosis
FDA
In dvpt
Oncomethylome
(2003)
Liège, BE, EU
Epigenetic
Colorectal
Lung
Diagnostic
Phase 3
Epigenomics
Berlin, DE,EU
Epigenetic
Cancer
Prognosis
191 patents
Breast ER+
+ other
59
And already comparable products on the market :
Mammaprint – Oncotype DX
100 patients
60
20
ER +
30
Low
Proliferation
ER -
20
HER 2 Neu +
30
High
Proliferation
Mammaprint
=
GGI
=
Oncotype DX
60
Market Size
breast cancer prevalence
• 1 out of 9 women will develop breast cancer worldwide
• 1 out of 3 among these will die from it
• 1 up to 1.2 million new cases each year worldwide
– Europe : 370 000
– US : 210 000
– Belgium : 6000 (Bordet : 700)
• Treatment costs in Breast Cancer, evaluated at 45 000 M€
• First estimation of the market size :
– 70% of the patients use the kit
– At the current market prices, this means
1 400 M€
61
Breast cancer potential savings :
the anthracyclins case
100 patients
60
20
ER +
30
Low
Proliferation
Chemotherapy – response rate
Anthracyclins
0%
Taxans
Hormonotherapy-response rate
Letrozole
60% (?)
Targeted Therapy-response rate
Herceptine
ER -
20
HER 2 Neu +
30
High
Proliferation
10 à 15 %
30 %
20 à 30 %
60% (?)
30%
62
75 % of the patient treated by anthracyclins
do not respond
100 patients
60
20
ER +
30
Low
Proliferation
ER -
20
HER 2 Neu +
30
High
Proliferation
Undergo chemo
specific treatment
75% DO NOT RESPOND
63
The potential savings of not using anthracyclins for patients
that do not respond to the therapy is huge
100 patients
60
20
ER +
30
Low
Proliferation
20
ER -
HER 2 Neu +
30
High
Proliferation
Undergo chemo
specific treatment
75% DO NOT RESPOND
Potential savings =
2.500 M€
64
TIP of the ICEBERG !!!
• The cost of patient treatment are estimated as the third part
of the overall costs
• Anthracyclin treatment is one of the less expensive
• BUT ABOVE ALL :
– Anthracylcin can be CARDIOTOXIC !
– Anthracyclin treatment can induce leukemia !
65
The nowadays market price is related to the
previously calculated savings
2500 M€ * 1/(0,75*0,7)*0,3 = 1428 M€
=
market size calculated (cf slide 51)
? What do you conclude of such a calculation ?
66
License
Already comparable products on the market :
Mammaprint – Oncotype DX
Our Licensee has developped a new product : MapQuant DX
100 patients
60
20
ER +
30
Low
Proliferation
Mammaprint
=
MapQuant DX
=
Oncotype DX
ER -
20
HER 2 Neu +
30
High
Proliferation
ULB licensed in december 2007
the technology to an outsider in
the domain of breast cancer (but
experienced in leukemia) :
Ipsogen
Nathanaël Ackerman - ULB - From Research To Business - Strategies for Cancer Genomic Data Analysis - Mexico, 5th of June 2009
68
The business model integrates a ULB
spin-off that has specific ISO accreditation
R&D
Marketing
& Sales
Biopsy
Sample
Analysis
Treatment
Recommandation
Prognosis
/Prediction
Production of
analysis
tools
Client : hospitals, oncologists
69
Back to science, once again …
Sotiriou C., Pusztai L., Gene-Expression Signatures in Breast Cancer, N Engl J Med 2009 ; 360:790-800, Feb 19
70
Meanwhile the research is going
on …
New patents were applied for and several
financements for research were raised
100 patients
60
20
ER +
30
Low
Proliferation
ER -
30
High
Proliferation
PULB 134
PULB 135
20
HER 2 Neu +
PULB 152
PULB 157
PULB 144
72
The Spin-off
Epsynomics’ value chain
R&D
Marketing
& Sales
Biopsy
Sample
Analysis
Treatment
Recommandation
Production of
analysis
tools
Epsynomics
Client : hospitals, oncologists
Prognosis
Prediction
75
This is not the end of the story …
Questions & Answers
Many thanks for your attention!
Nathanael Ackerman
[email protected]
77
19/03/2013 Warsaw
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