Commercialisation – Turning Science into a Business
Speaker: Adam Podmore, UniServices Business Manager in Biotech/ Pharma
Adam provided a view of science commercialisation using the ‘UniServices’ approach as an example. While I had come across most of the content before in other commercialisation/ funding workshops, I found their process for analysing new inventions/ideas quiet insightful. This matched with the activity provided students with a great introduction into the world science research commercialisation.
Facts about UniServices
- conduct contract research on behalf of external parties while also commercialising the IP generated within the University
- Predicted to generate $140 million in 2012
- Have spun out 23 companies, approx 7 being in the biotech area. They are aiming to achieve 3-4 more a year.
- Employ a stage gate model (refer to figure below)
- Inventors take 33% of the benefits extracted from the IP. For students, the reliance is on their supervisor to see their IP interests are managed and accounted for.
- UniServices have created a seed fund based on superannuation funds from Australia in order to get companies across the ‘valley of death’.
- Funding is given for proof of concept studies $5-15K, Stage 2: 10-100K allowing prototype development/ in vivo data to get get ready for the industry. This is followed by seed funding and development of a full business plan resulting in the spinning out of a company of licensing of the technology.
Figure: The Stage Gate Model to Commercialisation for UniServices Ref: UniServices Intranet
Analysing ideas- To analyse whether to invest in research of a commercial nature, UniServices employs 5 areas of criteria to score a proposal.
- Business strategy – does it fit the business profile
- Technical success – resources required, manufacturing capacity and skills capability
- Does it have commercial success – its market, competitors, uniqueness
- Reward – investment required? What will be the return? How long will a return take?
- The X FACTOR
Funding avenues for biotech
- basic research grants
- spin out a company and raise investment or license – is the the company based on a platform technology? More likely to spin out rather than license if the IP is a platform technology with multiple applications.
- Seed funding – typically earlier than VCs ranging from 100k- 1mill
- VC – Series A 10mill (can be instead of seed), Series B 30mill (typically for phase 2, trying to achieve a 5x return)
- IPO – a hard road to take
- Trade Sale – favoured exit strategy
Example: Proacta – the makers of PR-104, a small molecule prodrug targeting hypoxic tumours.
‘04 – 8million Series A funding from GBS Ventures, Genetech/Roche, No.8 Ventures/ Endeavour Capital
‘07 – 35million in Series B funding from Claris and Delphi Ventures
ACTIVITY:
Assess whether we (controllers of a seed fund) would invest (1.5 million) in a new small molecule anti-cancer compound, SN28049 . A profile of this technology can be found at: http://www.uniservices.co.nz/pageloader.aspx?page=1487d8d0d82
Based on point scoring scale using the criteria under ‘analysing ideas’ our decision was – ‘Yes, grant funding but in the form of milestone payments’. The team has a strong proven ability to commercialise successful chemotherapeutics. The drug itself exhibits a strong profile in both toxicology and efficacy data with clear benefits over competing drugs.
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