The Triple HelixHow This Innovation Model has

Supported the Success of MDS Sciex

Bill DavidsonMay 10, 2006

MDS Sciex

• World’s largest manufacturer of mass spectrometers in the life sciences market

• >$550M in end-user revenues

• 550 employees in three sites, 230 staff in R&D

• $50M R&D budget

• Joint Venture with Applied Biosystems• MS/MS, Linear Trap, QqTOF, TOF/TOF

• Joint Venture with PerkinElmer• ICP/MS and prO-TOF

• Just launched first non-MS product – the CellKey cell analysis system

What is the Triple Helix?

Triple Helix Piano Trio

What is the Triple Helix?

The Triple Helix Rock Band

What is the Triple Helix?

University

Government

Industry

Funding &Strategic Needs

New Product Concepts

Diagram of How it Works

Industry Government

Academia

Employment, Taxes, Benefits to Citizens

Benefits to Industry

• Expand long term and risky research activities to experts in the field

• Obtain proprietary technology through licensing agreements

• Leverage funding through matching grant projects

• Collaborating research labs are source of new recruits

Benefits to Academia

• Excellent source of funding with industry and government sharing the load

• Funding allows for critical mass of personnel and in general more efficient research

• Training of highly qualified personnel in industrial related research good for job placements

• Helps remove stigma of “ivied walls”

• Research generally based on strategic needs and has long range benefit to the community

Benefits to Government

• New industries and new products can lead to higher employment

• Financial benefit from taxes and duties

• Helps support strategic R&D initiatives

• Many products have impact on Canadians in providing a better live style

Success Stories

Development of TAGA 6000

An Mobile Taga 6000 for Environmental Monitoring

Taga 6000 (1980)

Parties Involved• Academia

• University of Toronto Aerospace Institute, Barry French who had had expertise in ion optics in free jet expansion

• Government• National Research Council, Peter Dawson who had

world leading expertise in quadrupole design• Department of Industry (PILP program)

• Industry• Sciex Inc.

Outcome

• The TAGA 6000 was the first commercial triple quadrupole mass spectrometer

• Introduced in 1980, it was the foundation for Sciex’s commercial success

• Sciex now is world leader in production of triple quadrupole

• Major source of licensing revenue for the NRC and U of T

• Led to thousand of Canadian jobs

• Off-spring products now used in development of drugs, neonatal and other clinical screening

Development of ELAN 250

Parties Involved

• University of Toronto Institute for Aerospace Studies• Dr. Barry French who had expertise in interfacing

atmospheric pressure ion sources with MS• MDS Sciex

• Dr. Don Douglas who was the first to accomplish this interface.

• National Research Council• Dr. Jim McLaren who was a leader in elemental analysis

• Department of Industry

Outcome

• The Elan 250 was the first commercial ICP/MS used for trace element detection

• It proved to be the catalyst in the formation of a joint venture between Sciex and Perkin Elmer

• Market now include: clinical, environmental, semi-conductor, homeland security, medical research

More Outcomes

• NRC became the first user of technique and used it to develop calibration standards

• NRC received royalties as repayment of government grant

• Several hundred jobs created over the years

• Diversified Sciex’s product line and kept company alive in the mid-80s

Development of ELAN 6000 and API 300

Parties Involved

• University of Toronto Institute for Aerospace Studies

• Dr. Barry French• Several Sciex scientists seconded to UTIAS

• MDS Sciex

• Perkin Elmer

• Ontario Technology Fund

Outcomes

• API 300 became the platform triple quadrupole system for MDS Sciex and with high margins led to added profitability

• Elan 6000 also became the platform ICP/MS, and became the market leader in elemental analysis

• $17M government investment has lead to over $3B in revenues

More Outcomes

• This project became the “model” project for believers in the triple helix model of innovation

• It gave MDS Sciex the ability to compete globally and led to our success in the industry

• UTIAS students and post-docs went on to excellent positions in industry and academia

• OTF didn’t fair well and was stopped when Conservatives took power

Development of QStar and o-MALDI

Centaur

Parties Involved• University of Manitoba

• Dr. Ken Standing and Werner Ens, experts in time-of-flight (TOF) technology

• MDS Sciex

• Dr. Bruce Thomson and others, experts in quadrupole technology

• Applied Biosystems

• Institute for Marine Biosciences

• Dr. Bob Boyd and others, experts in the use of MS in bioanalytical work

• NSERC

Outcomes

• The QStar was the first TOF instrument developed by MDS Sciex

• It is now a key product in biomarker discover and protein identification

• o-MALDI proved to be a powerful tool in proteomics and now is used to tissue imaging, high throughput assays

• U of Manitoba and Sciex were awarded an NSERC Synergy Award for this project

More Outcomes

• Royalties and other licensing fees were a major source of revenue for U Manitoba (and still are)

• U Manitoba became key player in proteomics arena

• Key member of Sciex’s present research group came from U Manitoba and IMB

• This is also viewed as a model of how academia, industry and government projects can be beneficial to all

When Projects are Successful

Industry

Academia

Government

Not So Successful

DNA Sequencer

The Applied Biosystems Prism 3700

Parties Involved

• University of Alberta• Dr. Norm Dovichi, expert in capillary electrophoresis

• Genetic Disease Network

• Bacterial Disease Network

• MDS Sciex

• NSERC

Outcomes

• ILO office late in patenting certain aspects of the technology

• MDS Sciex unable to commercialize product

• Applied Biosystems licenses technology from Sciex and creates the first high throughput, capillary based DNA sequencer

• This technology led to the sequencing of the Human Genome

• Job creation in Canada less than 5 sales persons.

What went wrong

• University under-estimated value of the technology

• MDS Sciex did not have the resource base to commercialize a non-MS product

• Applied Biosystems had other key patents in place that restricted Sciex

• Dovichi became under-funded, and went to the US

MS Protein Sequencer

The Toby Project

Parties Involved

• Biomedical Research Centre (University of British Columbia)

• Dr. Ruedi Abersold, a leader in protein characterization

• MDS Sciex

• Industry Canada

Outcome

• Three prototypes were built but no commercial product was ever made

• Industry Canada did not receive any of its investment back

• Technology worked, but overtaken by other MS approaches (also developed by MDS Sciex)

What went wrong

• Acceptance of the technology was slow since all funding was directed towards DNA sequencing at the time

• Wellcome foundation pulls out of BRC and some funding disappears

• The complexity of the technology made it somewhat unattractive

• With BRC transferring to UBC, funding becomes a problem and Ruedi Aebersold leaves for U Washington

Lack of Government Funding Leads to “Separation”

Canadian Researcher

FundingAgency

Genome Canada

Competitions• Competition II

• MDS Sciex and Genome Prairie team up to “Develop Enabling Technologies for Proteomics Research”

• Competition – Human Health• University Hospital Network, MDS Sciex and Ontario

Genomics Institute successful in “Development of MS-based Cytometers for Stem Cell Research”

• Competition III• MDS Sciex, Genome Prairie and Mt. Sinai Hospital propose

to develop new tools for biomarker discovery and validation

Outcomes• Competition II

• Project used as an example to parliament as to the value of large-scale projects involving the triple helix

• Competition – Human Health• MDS Sciex backs out of major funding due to high

commercial risk. Sciex researchers form new company to continue project.

• Competition III• Although reviews were excellent, having commercial

company lead the project was likely the reason for the project being reject. Outcome of Sponsorship-gate.

In Conclusion

Benefits to Triple Helix

• New technologies and products arising from university research

• Training of HQP to support industrial R&D in Canada

• Licensing revenues for Universities

• Job creation for Canadians

• Products lead to higher living standards

• Allows Canadian academia and industry to compete globally

Pitfalls to Triple Helix

• A highly successful research project may lead to difficulties in technology transfer

• There are very few government funding opportunities, particularly if industry is not willing to match funds by greater than 50%

• Industry may not have the resources to commercialize the technology

• In highly competitive areas, IP issues can jeopardize commercialization plans