The Evolution of the OTC
A comprehensive approach to technology commercialization
The Texas A&M University System
Workshop Outcome Goals
Develop mission oriented criteria for each
institution technology commercialization
program
Define spin-off/new company creation
models that work in the Portuguese context
Develop an internal venture opportunity
plan for a university technology from your
institution
Workshop Methodology
Form teams around universities that have a
technology that may be the basis of a spinoff company.
• If you haven’t brought a technology, join with
another team
Develop strategic thinking and materials for
your university
Work Groups
University groups
• If you did not bring a technology, join with a
university that did
Technology briefing
• What
• Why
• Connection
• Next steps
The Nine Points – A Common
Understanding
Universities should reserve the right to
practice licensed inventions and to
allow other non-profit and governmental
organizations to do so
Exclusive licenses should be structured
in a manner that encourages technology
development and use
The Nine Points
Strive to minimize the licensing of
“future improvements”
Universities should anticipate and help
to manage technology transfer related
conflicts of interest
Ensure broad access to research tools
The Nine Points
Enforcement action should be carefully
considered
Be mindful of export regulations
Be mindful of the implications of
working with patent aggregators
The Nine Points
Consider including provisions that
address unmet needs, such as those of
neglected patient populations or
geographic areas, giving particular
attention to improved therapeutics,
diagnostics and agricultural
technologies for the developing world
A Common Understanding
The nine points help to guide university
licensing
They are common themes across
universities
They provide the guardrails for licensing
They help to guide the activities of the
technology transfer office
Is a successful commercialization office all
about the licensing function working well?
Why We Do What We Do
Translate discoveries into products
• Connects to the service mission of the university
• Payback to the taxpayers that support the
university in better products
• May generate a cash return
• Generate economic development
Protect our commercial partner’s
investments with intellectual property
• Enable the commercial partners to invest in the
product
• Sometimes is required to commercialize
Primary Concept
“The main motivation for a university to transfer
technology is an extension of its basic mission – to
teach, to generate and share new knowledge, and
to be of service to society. And sometimes
technology transfer generates significant income
for the company partner and the university. By
maintaining the core values of the university while
working with the private and public sectors to
enable development of products, those of us in the
technology transfer profession help change the
world.”
Agree? Anything to add?
Other Impact Points
What is in the mission statement of every
university
• Research
• Education
• Public service/public good
Can (should) technology commercialization
impact all 3 parts of the mission statement?
Is this how you think about your mission?
What Is Your Mission?
How does your technology
commercialization mission support the
university mission?
How do you currently measure impact?
How should you measure impact if you
want to impact the university mission?
Define Your Mission and
Measurements
How do you want the university to define
your mission?
How do you want to be measured?
Texas A&M System Overview
OTC Facts
Evolving Demands
The Three Paths to Commercialization
• Direct Licensing
• R&D Alliances
• Start-Up Formation
Partnership
The Office of Technology
Commercialization
Since its founding, the OTC has:
• Processed more than 2,400 inventions created
by A&M System faculty and staff
• Filed more than 2,700 patent applications
• Completed more than 1,700 License
Agreements and Material Transfer Agreements
• Generated revenues exceeding $60 million
related to intellectual property rights
The Office of Technology
Commercialization
Revenues have gone to support:
• More than $20 million in sponsored research
• Retention of important faculty
• Support for more than 800 faculty and staff
inventors
• Sharing arrangements with co-developers like
USDA and other universities
The Office of Technology
Commercialization
The OTC:
• Became the youngest technology transfer office
•
•
•
•
in the top 25 in North America in revenues
Is in the top ten in the number of license
agreements producing income
Does two-thirds of its license agreements with
small businesses
Files a patent every other day
Completes a license agreement once a week
Impact of License Revenues at Texas
A&M System
$10 million in one year.
• Successful?
Where does that money go?
• $1 million for patent expenses
• $2.25 million to run OTC
• $3.375 million directly to inventors
• $3.375 million spread across System Members
with a combined budget of $3 billion
Is that impactful to Texas A&M System?
In 2005 OTC Defined
Commercialization Broadly
Licensing alone has minimal impact on the
mission of the university
• Education
• Research
• Public Service/Public good
University commercialization must be
broader than licensing
• Industry-university partnerships are key to
commercialization success
Office of Technology
Commercialization
OTC is a matchmaker between System
members and commercial partners
• Single point of contact for partners
• OTC works across silos
OTC defines commercialization broadly
• Licensing
• New venture creation
• Increased research flow
• Assist with new research infrastructure
Evolving Demands
OTC’s strength has been direct licensing
This is one of three basic activities that any
technology commercialization office must
be proficient in
As Texas A&M becomes more
sophisticated, the OTC is challenged to
improve in other areas
The future of the OTC lies in improving our
abilities in the other two sectors of activity
Scope of OTC Services
Direct Licensing
Research and Development Alliances
• Industry
• State/Federal
Start-Up Formation
Improving Direct Licensing
Triage and Assessment
• Preliminary Reports
• Interview Reports
Communication of Commercialization Plan
• Intellectual Property Strategy
• Marketing Strategy
Disciplined selection of opportunities
Follow-through
Transparency
Low Reward
High Reward
Technology Evaluation Matrix
Low Licensing Risk
High Licensing Risk
High ValueAdded
Cost Drivers
(Prioritize)
Low ValueAdded
(Maintain low risk,
increase reward if
possible)
(Make a few smart picks
where risk can be
reduced; close the rest.)
Non ValueAdded
(Waive/Release to
Inventors)
Low Licensing Risk
High Licensing Risk
High Reward
Meet
Technical
Milestones
Cost
Drivers
Low Reward
Market Research Reports Help to
Manage Risk
Trade Value
for Risk
Reduction
Waive/Release
Industrial R&D Alliances
Finding corporate partners to bring
technology development forward
In the past, reliance on faculty to initiate
these
Currently, members of licensing staff
dedicate time to pursuit of industry
alliances
UNIVERSITIES
HEALTH SCIENCES
AGENCIES
Scope of System Capabilities
11 Universities and the Health Science Center
•
Campuses in Texas and the Persian Gulf state of Qatar
7 state agencies
27,000 faculty and staff
• Performed $637 million in externally funded research
Physical and Program presence in all of the state’s 254
counties
In 2008 the A&M System
• educated 106,000 students in degree programs
22,888 degrees awarded
* * More than 1 in 5 students enrolled in a public university in Texas is
attending an A&M System institution
o
• Agencies trained hundreds of thousands more students through
practical extension programs
Single Point of Contact
The need is clear, but how?
The System was the only organization
which spanned the Members
• OTC’s business focus made it a natural fit for
the job
o
o
o
Referred clients to appropriate Members/laboratories
Worked across silos
Recognized synergies between industrial clients and
multiple Members
Initially organized under Business
Development in OTC
OTC and Business Development
(Philosophy of working with the Marketplace)
Understanding commercial needs and
demands can uncover collaboration
opportunities and potential funding
• Offer need-driven research opportunities to the
researchers
Collaboration opportunities are an outcome of
researchers gaining an understanding of
commercialization
Long-term commercial partnerships lead to
research funding opportunities
Start Small - Build Upon Success
Bio-energy efforts were greatly assisted by
OTC
Worked closely with AgriLife Research and
AgriLife researchers
• Led to millions of dollars in sponsored research
• Enabled AgriLife to pay for dedicated Corporate
Relations staff
• Has led to many more deals in AgriLife with
large industrial partners
Model is Evolving
Moving towards a distributed Corporate
Relations model
• Multiple offices/people in each of the major
Member organizations
Created a new Associate Vice-Chancellor
for Economic Development
• Coordinates efforts and helps to create bridges
between organizations
Corporate Relations Benchmarks
University of Wisconsin, Madison
Office of Corporate Relations, Wisconsin Alumni Research
Foundation, Research Park, WiSys
Purdue University
Office of Engagement, Office of Technology
Commercialization, Research Park, PURE Database
University of Michigan
Academic and Corporate Relations Center
Operational Model
State and Federal R&D Alliances
Finding state and federal sponsors to bring
technology development forward
These alliances may include industry
partners as well
In the past, reliance on faculty to initiate
these
Currently, senior staff dedicate time to
pursuit of these alliances
State and Federal R&D Alliances
Guy Diedrich
• Vice Chancellor for Federal Relations and
Commercialization
Mark M. Ellison
• Associate Vice Chancellor for Economic
Development
Dennis Beal
• Director, Industry Alliances
Get Involved Early
Build a team of Trusted Technology
Advisors for our two customer bases:
• University researchers
• industry/investment partners
Long-term commercial partnerships can
lead to research opportunities
Collaboration opportunities are an outcome
of researchers gaining an understanding of
commercialization
Start-Up Formation
Creating companies
• to allow us to move disruptive technologies
forward
• to allow us to get a greater return on new
technologies
In the past, reliance on entrepreneurial
faculty to initiate these
Currently, have a dedicated team that
focuses on formation of start-ups
OTC and Start-up Creation
(Establishing New Business Entities)
Identify opportunities with start-up
potential for equity investment
Assist with market research, business
planning and partnering
(Commercialization Services)
Partnering with early stage capital funds,
investors, and strategic partners
• Focus on the relationship and be demand
driven
Provide incubation possibilities at Texas
A&M or with partners
• Be born big with international presence from
the beginning
The Pursuit
of Regional Knowledge-based
Competitiveness
VISION
Build global companies from start-up by leveraging a
network of networks built by technology commercialisation
partners around the world
• Technology networks
• VC / High Net Worth Individual networks
• Industry networks
• Management networks
An Example of The Pursuit
of Regional Knowledge-based
Competitiveness
Memorandum of Understanding (MOU) between Wallonia
Export and Investment on one side and Texas A&M System
on the other.
 Wallonia is a partner of Texas A&M in the European
Union for the commercialisation of their technologies.
 AWEX is the contact point in Belgium for the realisation
of the MOU at all Universities, Incubators, and
Competitiveness Clusters .
 The MOU is based on reciprocity.
Creating a Joint Enterprise
Co-Identify
Co-Protect
Co-Invest
Co-Locate
Co-Market
The Model
Start with two locations
Wallonia
Co-Identify
Co-Protect
Co-Invest
Co-Locate
Co-Market
Texas
The Model
Spread the wealth
EU
Co-Identify
Co-Protect
Co-Invest
Co-Locate
Co-Market
US
China Middle EastLatin Am
Results of Defining Commercialization
Broadly
 $170 million in new revenue since 2006
◦ State – industry – university research institutes
◦ State - industry – university partnerships to attract
star researchers
◦ Industry – university multi-year research programs
 Direct impact on the mission
◦ Education, research, public good
Keys to Success
 Top administrator support for
commercialization
 Key staff are from industry and speak the
language of business
 Commercialization becomes part of the
project design
 Industry partners know their ultimate goal is
important to the university as well
 Thinking beyond licensing to other possible
business support
◦ Development funding
◦ New venture creation
Get Involved Early
Build a team of Trusted Technology
Advisors for our two customer bases:
• University researchers
• industry/investment partners
Long-term commercial partnerships can
lead to research opportunities
Collaboration opportunities are an outcome
of researchers gaining an understanding of
commercialization
Start-Up Formation
Creating companies
• to allow us to move disruptive technologies
forward
• to allow us to get a greater return on new
technologies
In the past, reliance on entrepreneurial
faculty to initiate these
Currently, have a dedicated team that
focuses on formation of start-ups
TAMUS Approach
Inventor led spin-out vs. university led spinout
• Small equity stake vs large equity stake
• No investment vs cash investment
• No university business involvement vs university
board seats
• Part time professor CEO vs full time CEO
• Small university upside vs large university
upside
What Are Spin-Out Opportunities?
Goldilocks technologies
• Not developed enough to attract licensees
• Developed enough to attract angels
Next steps usually involve further research
at the university
Value add step is relatively inexpensive
Large market – fundable, exit strategy
Example Spin-Out
MacuClear
• MacuCLEAR completed a Series A private
placement totaling $1.5M to complete preclinical
studies and attain the IND for activation of
human clinical trials. In March 2009,
MacuCLEAR also received follow-on investment
of $1.7M from the Texas Emerging Technology
Fund to complete Phase Ib human trials.
Example Spin-Out
Salient
• Salient launched a CASAD Phase Ib human
clinical trial at MD Anderson Cancer Center in
Feb 2009, and trial results are expected in Q1
2010. Salient has raised $1.5M in convertible
debt to support Phase Ib clinical trials and to
fund ongoing testing at Texas A&M University
identifying additional follow-on applications for
CASAD. Salient has also been identified as a
finalist to receive a $2.1M award from the Texas
Emerging Technology Fund to support Phase
II/III trials and follow-on applications.
Spinouts
Spinout companies are a tool, not the only
tool.
Example scenarios
• Belsim
• Global BioDiagnostic
• Lisam
“Our goal is not only to discover
knowledge, but to apply it,”
Chairman Bill Jones
Board of Regents
What Tools Can Be Applied In Your
Model?
Portfolio management?
Involvement in developing industrial
relationships/research programs?
Involvement in strategic research
initiatives?
Economic development mission?
University led startups?
International startup partnerships?