Trials and tribulations, an academic in a commercial world. Dr Tim R. Dafforn School of Biosciences Birmingham Adventures in Commercialisation 2000 Cambridge it all begins with an question. There must be a simpler method of genotyping people? A A team is assembled 2001 Solution found Biopysicist (Me) Physical Chemist Clinical Biochemist -LD 260nm/230nm 2.8 2.4 2 1.6 1.2 0.8 0.4 0 1 1.2 1.4 1.6 1.8 2 2.2 2.4 2.6 2.8 3 3.2 3.4 speed A new use for an old technique Commercialisation process begins Commercialisation process begins Patent filed Decision needs to be made as to commercialisation route: Spin-out License Patent filed Decision needs to be made as to commercialisation route Spin-out License NEED TO DO SOME RESEARCH Probably the worst early decision 1
Licensing vs. new company Which is best? Depends on Nature of IP Strength of IP Desired return on investment Appetite for risk Inventors External factors such as regulatory approval or the need to have accreditations to standards Licensing vs. new company Simple rules of thumb Licences are for: Incremental improvements Single opportunities New companies are for: Platform technologies Multiple opportunities Licensing More often the suitable route Easiest if own protected IP Does not transfer ownership Retain control Many possible deal structures Licensing What is a licence? Grants permission to the licensee to use the IP Can be used for copyright, patents, know-how, research reagents etc Exclusive, sole (semi exclusive), non-exclusive Can be restricted to field and/or territory Licensing Financial terms Free! One-off payment Upfront and milestone payments Annual fees / royalties Repayment of IP protection costs Much more work than a licence Higher risk but potentially much higher return People are key Entrepreneurial? Experienced? Committed? Get return via increased valuation leading to a sale/ipo rather than money every year 2
Need to consider: IP protection Market Customers Investment required Management Risk Required return IP protection: Is it valid? Where? Is it defendable? Granted? Can you detect infringement? What is the scope of protection? Broad or narrow? Portfolio? Freedom to operate? Market Size Niche? Where in value chain? Entry barriers Legislation Capital investment cycle Ability to sell Competitors What is their offering? Customers How many and will they buy? Investment required Large amount? For what? Time to market? Chance of success ie. risk? Return on investment for funder Multiples Exit strategy Exit timing Management Crucial! Academic founders are usually not suitable to drive the company forward on their own Best as technology consultants? Decided to cold call on a number of companies 3
The Original Dragons Den Industrial Partner. Big (no, I really mean BIG) > $ 1 billion turnover Support development for 12 months Project dropped However, the connections made have become important since (NETWORKING) Venture Capital 2003 Spin out 1. Dioptica Ltd. Board members: 2 Inventors, equipment manufacturer, CEO from Rolls Royce. CEO mounts takeover bid Equipment manufacturer leaves with 2 inventors 2004 Spin out 2 Dioptica Scientific Ltd. Board, one inventor, one manufacturer Concentrates on equipment manufacture. Commissions Market Research Market Research Concludes Equipment Manufacture is a dead-end! Consumables business the way to go Obtain contract with major manufacturer! SALES 2009 Dioptica Scientific still exists! Turnover of 50-60K p/a Sales worldwide 1 employee Founders have decided all profits should be re-invested in research 4
IDEA 2 LD in pathogen detection The technology Involves 2 novel developments A new application of LD A novel use for a bio-reagent So now we need to get our ducks in a line Address issues pertaining to commercialisation of idea Obtaining intellectual property Consult experts Obtain funding Obtaining funding. EPSRC follow-on fund 125K (including funding for Market Research) Medici training fellowship 25K including 3K training budget Training courses AWM APOC fund and KTDF 40K contract with assay developer Meetings with Venture Capitalists and AWM nusp Negative unique selling point. What is uniquely good about your technology is important What is bad about your technology is perhaps more important Lower sensitivity 5
Obtaining intellectual property Primary Patent at international stage Established multiplexing method yielded a second patent - to be filed Next step... Where now? License Spin-out Something in between? Result: Linear Diagnostics Ltd formed in April 2011 Your turn WHY SHOULD YOU BE INTESTED IN COMMMERICALISATION? IT CAN MAKE YOU MONEY!! It can be fun It is a real change to academic work You meet some interesting people It can help getting funding from government What makes a good Entrepreneur Studies have shown: First born Entrepreneurial family Incredibly persistent Intuitive OCD Weird relationship with father 6