Show Me the Money

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By Amber Lepage-Monette

As National Biotechnology Week drew to a close the final week of September, cities across the country held events that explored the life sciences industry and the issues it is facing.

In Mississauga, Ont., over 100 attendees converged at the Toronto Biotechnology Initiative’s (Toronto, ON) From Research to Revenue event to listen to a variety of speakers — from CEOs, to VCs, to entrepreneurs — discuss one issue that concerns them all: commercialization.

It’s an issue that not only affects the university scientist conducting basic research, but also industry, which is always looking for the next big thing. And in the end, if commercialization is successful, it’s the public that reaps the biggest rewards.

The Funding Game
As it stands, however, Canada excels in research and innovation, but lags in developing that research.

For Parteq Innovations (Kingston, ON) president and CEO John Molloy, it’s a multi-faceted issue that hinges highly on dollars and cents.

“There is a gap between when the research ends and when you have a piece of technology that reaches the comfort level for either an investor or a potential licensee,” Molloy explains. “And over the years, that gap has widened.”

René Douville, vice-president of Life Science Ventures at RBC Technology Ventures (Toronto, ON) acknowledges that investors are not eager to step up and fund early stage research.

“It’s very, very difficult to invest at that stage,” he says. “It’s very hard to justify the cost of investing very, very small amounts of money where the risk is very, very high and the amount of due diligence required to make those investments is probably as much, if not more, than if you invest at the later stage.”

Douville says that risk could be minimized if research was properly funded to the proof-of-concept phase.

“That’s the chasm for life sciences, to take (research) from idea to beyond proof of concept and really know that you’ve got something,” he says.

Douville was part of the 1999 Advisory Council on Science and Technology’s Expert Panel on Commercialization of University Research. The panel released a report that clearly indicated what it would take to assist commercialization.

“We think that government has a role to play there in providing the funding for tech transfer offices, or commercialization offices to be able to do that,” Douville says.
Government funding would not only support bringing research to a later stage for investors, but could also address a secondary problem facing university commercialization: lack of experience.


“You’ve got a lot of tech transfer offices that are trying to live off of very meager budgets in university systems that will not allow them to bring in the right kind of business people,” Molloy says.

Former president and CEO of the University of Toronto’s (Toronto, ON) Innovations Foundation, Adi Treasurywala, PhD couldn’t agree more.

“Those who are doing tech transfer are trying very, very hard against some Herculean odds,” Treasurywala says. “You’ll find one person in an office trying to handle the whole spectrum of activity . . . these are very dedicated people.”

Treasurywala says proper funding for tech transfer or commercialization offices would draw in the necessary people with the expertise required to get innovations to the market.
“If you can offer competitive salaries, people will come and they will bring their experience with them, and that will make the business flourish,” he says.

Though the federal government recently announced $17.1 million supporting commercialization efforts through its Intellectual Property Mobilization program, some are skeptical that these funds will help.

“It’s a small amount of money divided over how many universities across the country,” Molloy says. “Every bit is going to help, but I don’t think it’s going to solve the whole problem.”

Collaborative Spirit
Treasurywala sees Canada’s commercialization problem as three-pronged, which not only rests on the issue of funding, but also on organization.

Current commercialization policies differ from school to school, Treasurywala explains. To an outsider, he says, it is difficult to learn what any given university is doing, let alone understand Canada’s system as a whole.

Secondly, he adds, tech transfer and commercialization offices can fall prey to school politics.

“University tech transfer shops tend to be funded by the university, and they tend to be subject to a lot of the pressures of university politics,” Treasurywala says. “So you get ‘commercialize this because this guy’s going to become dean next year’ or . . . ‘patent it even though there’s no hope of commercializing it’ and so on.”

Treasurywala proposes that the government set up one centralized tech transfer program, similar to the Industry Research Assistance Program that would own all the intellectual property and commercialize it across the country.

“Don’t give that money to the universities,” he says. “Rather set up centralized NRC (National Research Council) shops. Do it centrally, because of the advantage that you can also coalesce technologies. You can bring pieces of the puzzle together from disparate parts of the country.”

Not only would a centralized system be more effective at managing the money, Treasurywala says, but it would also directly address his third point: researchers being too wide-spread, making them unaware of what their colleagues are doing or what the industry needs.
Treasurywala is the founder of ArrowCan Partners (Mississauga, ON), and is trying to address this problem with his new company.

ArrowCan is akin to a headhunter or executive search business, Treasurywala explains, except that instead of looking for people, it looks for licensing opportunities.


“I go to industry, big and small, and I say to them, I’ve done 30 years with pharma business, so I know a lot of people,” he says. “You tell me what you’re looking for, and I will go find it for you in Canadian universities and early biotech companies.”

Treasurywala then goes to universities or small biotechs, and without charge, works in their labs or offices to understand what research is being conducted. In doing so, he gets an understanding of what companies are looking for in licensing opportunities, while also seeing research that might fill those opportunities.

Molloy says knowing what industry needs and what researchers are doing in part embodies the “active management” that more commercialization offices need to embody.
“Discoveries by themselves are not going to find their way into the market for the most (part),” he says. “They need active management, and active management is just that — you’ve got to really be involved, you’ve got to be detailed and you’ve got to organize the commercialization.”

By keeping both research activities and industry demands in mind, beneficial innovations will be fostered to the market faster, Molloy says.

“You have to maintain that constant interaction with industry to understand where the real problems are. And you have to be able to identify when someone comes to you with a solution for a problem, instead of just a solution from a problem unknown,” he says.
“The more in touch you are with industry, the more contacts, the better relationships you have with industry, the more aware you will be for where a discovery may have a fit,” Molloy explains.

It’s an approach that he says Parteq is looking to take at Queen’s University, and one he says will help commercialization overall.

“The real benefactor of commercialization out of universities is the public at large, it’s the economy. And there is some responsibility for the government to take a role in making sure that happens,” Molloy says. “And I don’t think the government should sit back and watch the universities deal with tech transfer in a way . . . where they see that the resources that are being invested into that program are not sufficient.”