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tranžigerinternational corporate and transaction advisor

life sciences and healthcare

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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

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

Geneva, Switzerland, March 10, 2009



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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



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Scotland’s Biotechnology Fame

Dolly the Sheep, and her lambs at Roslin



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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



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Fashions in IP development

• Universities as source of learning and publishing.

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

• Tech transfer and academic consultancies– Prof Stenlake’s Atracurium, £29m

• Science Parks– 1971 Heriot Watt Research Park – first science park in

Europe

• Spin outs– Aurora– Drug Development Scotland– Cyclacel

• Specialist IP asset developers and funders assets

– British Technology Group– IP 2 IP– Braveheart– Exomedica



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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



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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

Entrepreneurship

Proof of Concept

New company

Seed Fund

Spin out

Co-investment

Angel investors

Venture Fund

Scottish Government support

Fund Size Investment Range % Life Sciences

SMART for SMEs £7m p.a. (£32m over 5 years)

Up to £600k (35% of total

64%

SE Investing Scottish Seed Fund £2m ~ £100k Scottish Co-investment Fund – April 2003

£11m £100k - £1m 32% (£13m)

Scottish Venture Fund – Jan 2007

£10m £500k - £2m 28% (£5m)

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



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21st Century Development Frameworks

• Public Sector Initiatives– 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

• Angel Syndicates - Over 30– 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



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The Next Issue - The funding gap

International Commercial Skills

40

Business Building

Skills

Scientific and Technical Skills

5

Proofs:Technical Concept

Product Definition

Market Acceptability

Client Orders

Business Capability

Company Growth

Corporate Expansion

1 2 3 4 5 6 7

SMARTEnterprise fellowship

Proof of Concept

Seed Fund

Technology Investors

Angel Co-investment Fund

SE Venture Fund

Active Investment

Private Equity

Corporate

University Spin out Start-up Establishment Growth National International

VA

LUE

BE

NC

HM

AR

K



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Conclusion

Scientific IPInvention

DevelopmentMarket

ProduceCreate Business

Attract InvestmentGrow Business

InternationaliseCorporatise

Progress IP from Upstream to Downstream to capture most economic value

Biotechnology can be a very significant contributor to both local economic well being, and worldwide health improvements.

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



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Iain Shirlaw

Contact details:



[email protected]

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

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