Geneva Final

Information Meeting on Intellectual Property Financing Organised by the World Intellectual Property Organisation (WIPO)

A Case study of Biotechnology: How to use Biotechnology for Economic Development Theme 3: IP Financing in the Field of Patents

By Iain C Shirlaw Geneva, Switzerland, March 10, 2009

Introduction to Scotland – – – – – – – – – –

Population 5.1m North West edge of Europe Respect for Education 14 Universities Produces 1% of world’s published research Graduation rate of 39.2%, from first degrees * (#1 in OECD) 620 Life Science companies 31,000 Life Science jobs In 2007, 20 new Life Science companies formed £3 billion contribution to the economy

Scotland’s Biotechnology Fame

Dolly the Sheep, and her lambs at Roslin

Time line

• • • • • • • • •

1413 St. Andrew’s University 1495 Aberdeen Medical school 1776 Adam Smith, “Wealth of Nations” 1975 Scottish Development Agency 1979 Venture Capital - Biogen 1981 Spin outs Monotech and Bioscot 1998 Pharmaceutical Proteins IPO 2004 Cyclacel first European Biotech $100m funding 2007 Haptogen acquired by Wyeth

Fashions in IP development •

Universities as source of learning and publishing. –

•

Tech transfer and academic consultancies –

•

1971 Heriot Watt Research Park – first science park in Europe

Spin outs – – –

•

Prof Stenlake’s Atracurium, £29m

Science Parks –

•

1980 MRI scanner first demonstrated Aberdeen, but GE / Fonar fought patent for use of MRI in cancer detection

Aurora Drug Development Scotland Cyclacel

Specialist IP asset developers and funders assets – – – –

British Technology Group IP 2 IP Braveheart Exomedica

1980’s Life Science investing Corporate Legacy: Glaxo, Roche, Organon – Coats Paton, Monotech

• Public Sector – Scottish Development Agency: • Inveresk, Cruachem, Bioscot

• Venture Capital: – 3is, Apax, Transatlantic

• Angel investors: – Biocure, Bill Bruce

Financing Sources

• Scottish Enterprise – LSBAS, Spin outs

• IPOs – PPL, Scotia, Scotgen, Biocure, Shield

• VC Funds – Scottish Equity Partners – Albany Ventures

• Angel Syndicates – Archangel – Braveheart

Government Investment Strategies Scheme

Bridging Research

SMART Development Enterprise fellowships

SMART for SMEs

Fund Size

Investment Range

% Life Sciences

£7m p.a.

Up to £600k (35% of total

64%

(£32m over 5 years)

£2m £11m

~ £100k £100k - £1m

32% (£13m)

£10m

£500k - £2m

28% (£5m)

SE Investing

Entrepreneurship Proof of Concept New company Seed Fund Spin out Co-investment Angel investors Venture Fund

Scottish Government support

Scottish Seed Fund Scottish Coinvestment Fund – April 2003 Scottish Venture Fund – Jan 2007

Scottish Enterprise invests approximately £25m p.a. - around 30% of that is in Life Sciences. All funds invested are matched by private sector funding on at least 1:1

21st Century Development Frameworks •

Public Sector Initiatives – – – – – – – – – – –

•

Angel Syndicates - Over 30 – – – – – –

•

SMART Enterprise fellowship Proof of Concept Start-up Co-Investment Fund Venture fund Gateway Advisory Services Life Science Business Advisory group Life Science Alliance Bio Industry Association Scotland Nexxus Bioscience Network Archangel Braveheart Highland Tricap Alybyn Discovery

Clusters – – – – – – – – – – – – – – – – – –

Edinburgh Science Triangle Pentlands Science Park Edinburgh Technopole Roslin Bio Centre Bio Campus Heriot Watt Research Park West of Scotland Science Park Nova Technology Park City Science Glasgow Lanarkshire Medi-park, Strathclyde Business Park Scottish Enterprise Technology Park, East Kilbride Dundee MediPark Dundee Technology Park Scottish Crop Research Science Park Dundee Technopole Aberdeen Science & Technology Park Foresterhill Edinburgh Bio Quarter - $1 billion to create one of world’s finest Biomedical centres

The Next Issue - The funding gap International Commercial Skills

40

VALUE BENCHMARK

Business Building Skills

Scientific and Technical Skills

5

Technical Proofs: Concept 1

SMART

Product Definition

Market Acceptability

Client Orders

Business Capability

Company Growth

Corporate Expansion

2

3

4

5

6

7

Enterprise Proof of fellowship Concept

University Spin out

Seed Technology Fund Investors Start-up

CoSE Venture Angel investment Fund Fund

Active Investment

Private Equity

Establishment

Growth

National

Corporate International

Conclusion Progress IP from Upstream to Downstream to capture most economic value Scientific IP Invention Development Market Produce Create Business Attract Investment Grow Business Internationalise Corporatise

One of a nation’s key assets is the ability of its people to invent, develop and commercialise. Scientists who are awarded government grants also have a responsibility to recognise the Value of IP to the economy and health and welfare of its people Biotechnology can be a very significant contributor to both local economic well being, and worldwide health improvements.

Iain Shirlaw •

Contact details:

Active Investment Partners Management Services Consulting Investment •

[email protected]

With Special Thanks and Acknowledgement in the preparation of this presentation to Alan Muir, Bill Harris, Pat Mc Hugh and Michael Cannon