Stirring the Pot for Entrepreneurship in European Tech Transfer

March 2, 2017 Guest Contributor

Guest post by Luke Timmerman, founder and editor of the Timmerman Report, and a regular contributor to Forbes and STAT News.

The science in many parts of Europe is first-rate. No one disputes that. But yet the biggest emerging biotech business stories in the world pop up regularly in the U.S. That’s been true for a long time, and it’s been true lately with messenger RNA therapies, CRISPR-Cas9 genome editing, and deep DNA sequencing for early cancer detection, to name a few big ideas.

Technology transfer—measured by a society’s ability to invest in basic academic research and then shift it to the business world that can turn it into a viable product—has always been a tricky business. Get too aggressive, and people will complain that scientific institutions are money-grubbers, either exploiting public resources for private gain, or getting in the way of the knowledge sharing that’s central to the scientific mission. If an institution isn’t aggressive enough, it runs the risk of looking like a bunch of ivory-tower eggheads wasting tax dollars, caring little about economic growth or societal problem-solving.

The U.S., seeking a way out of the 1970s malaise, sought to play to the strength of its universities, letting them figure out how to strike their own balance between science and commerce. Congress created incentives for American universities to get patents on their inventions through the Bayh-Dole Act of 1980. University science has been off to the races with venture capital-backed startups ever since.  

Even so many years later, the U.S. continues to set the pace with activity at the nexus of academia and industry. There was a 15 percent increase in licenses and options executed, a 14.7 percent increase in patent applications, and an 11.3 percent increase in startups formed in the most recent fiscal 2015 survey of 200 U.S. research institutions conducted by the Association of University Technology Managers (AUTM). Comparable data isn’t available from European institutions, but other reports suggest Europe isn’t narrowing the gap. Private biotech companies in the U.S. raised USD 9.6 billion, compared with USD 2.5 billion raised by counterparts in Europe, according to Ernst & Young in its 2015 Beyond Borders report.

Many entrepreneurs grumble about tech transfer officers, in both the U.S. and Europe, for a number of reasons. Sometimes it’s because the academic institutions employ people who are inexperienced, ask for the moon in negotiations, or are overly cautious out of fear of getting snookered by the foxes in industry. Some of the most successful tech transfer offices in the U.S., like MIT and Stanford, are known for asking for little money upfront for their licenses, knowing that it’s best to start a lot of little companies in the hopes that every once in a while, one will strike it big and pay milestones to the institution later. The legal contracts may be full of legalese and potential potholes, but this isn’t exactly rocket science. One legendary tech transfer official at Caltech, Larry Gilbert, was renowned for simply getting to know what his institution’s faculty were working on, and encouraging them to disclose more inventions that might be useful. Gilbert’s active, but unassuming, approach turned Caltech into a leader of the licensing field in the 1990s.

Some of these practices may still sound alien at a number of European institutions, from what I gather. One entrepreneur wrote: “Many European TTOs still tend to ask for much higher percentages in the beginning (front-loaded) which often is a deal breaker.”

Still, there are examples of places in Europe showing some promise, with efforts to raise their game at technology transfer.

Here are a few operations worth watching:

  • Sweden-based Karolinska Development, which invests in science at the Karolinska Institute and at research centers across Scandinavia, has put together an investment portfolio of 10 companies. It joined one big recent investment of EUR 46 million in Aprea Therapeutics, a deal that was co-led by Versant Ventures and 5AM Ventures. The company has set up operations in Boston and Stockholm.
  • Switzerland-based Unitectra, which negotiates licenses on behalf of universities in Basel, Bern, and Zurich, says it now generates more than 130 million Swiss francs a year (about USD 130 million) for its three member institutions in license fees. It recently established an 18-month fellowship program worth about USD 150,000 for aspiring entrepreneurs seeking to further test their ideas. Given the challenges with support for young scientists in the U.S. (see my previous article for EBD Group) any serious effort to support bright young investigators could be advantageous.
  • Paris-based Sofinnova Partners has supported a group called Biovelocita, which seeks to run proof of concept studies to build on intriguing research from three research institutions in Italy. Biovelocita is run by Silvano Spinelli and Gabriella Camboni; a pair of a serial entrepreneurs who sold their most recent company, EOS, to Boulder, Colo.-based Clovis Oncology for USD 470 million. (See my previous article for EBD Group on the importance of serial entrepreneurs).

“They pick technologies from various Italian institutions, and they do the translational work that those, including those with tech transfer units, don’t know how to do,” said Antoine Papiernik, managing partner with Sofinnova Partners. “The fact that this was created by repeat entrepreneurs that are likely the most successful in Italy (and it is the 3rd time we’ve backed them) is pretty important.”

I’m looking forward to learning more about tech transfer practices today in Europe at the BIO-Europe Spring® conference Mar. 20–22 in Barcelona, Spain. I’ll be leading a discussion Mar. 21 on “Stirring the Entrepreneurial Pot in Europe” with a great group of speakers with different perspectives: Antoine Papiernik of Sofinnova Partners in Paris; Alex Mayweg of Versant Ventures in Geneva, Switzerland; Issi Rozen of The Broad Institute in Cambridge, Mass; and Divya Chadha Manek of the NIHR Clinical Research Network in the U.K.

Timmerman Report subscribers, if you are planning your trip to BIO-Europe Spring in Barcelona, please do look me up (luke@timmermanreport.com). Let me know what you’re seeing and hearing in European biotech.  

 

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