European Investment Fund Brussels, June 7 th , 2004

1. Technology Transfer AcceleratorMeeting with universities in order to kick start inputs to the project European Investment Fund Brussels, June 7th, 2004

2. Agenda Presentation of EIF Technology Transfer in Europe Technology Transfer Accelerator project

3. Presentation of EIF European institution created in 1994 EU specialised financial instrument for SMEs acting through: Venture capital (fund of funds), guarantees (SME loan portfolios) and Advisory (Complex Financial Structures) • SHAREHOLDERS • Subscribed capital of EUR 2 billion : • - 59.6% European Investment Bank • - 30%: European Commission • 10.4%: 31 financial institutions • Rating: AAA/Aaa/AAA (S&P/Moody’s/Fitch) OBJECTIVES «Pursue Community objectives » such as growth, employment, research and development, innovation, and regional development… « Generate an appropriate return» Operating uniquely through financial intermediaries (about 190 funds, 130 guarantee transactions) on a commercial basis Across 25 EU Member States + 3 (Candidate) + 3 EFTA countries

4. EIF portfolio Situation at 31.12.2003 • Total portfolio in EUR • Number of intermediaries • VENTURE • CAPITAL • 2.50 billion • (135 million in 2003) • 190 intermediaries which have invested in 1 800 SMEs • GUARANTEES • 6.45 billion • (2251 million in 2003) • 130 intermediaries which have supported 200 000 SMEs

5. EIF mandates and resources: € 8.8 billion at end-2003 Situation at 31.12.2003 EUR 2.0bn EUR 2.2bn EUR 4.5bn EUR 250m Facilité ERP ERP FACILITY Venture Capital (EUR 2.48bn) SME Guarantees (EUR 6.35bn) Additional until 2008+

6. EIF a leading player in the European SME finance market • Leading EU VC early-stage/high-tech player. EIF accounts for around 15% of early-stage market • Key EU provider of SME guarantees (loans, credit enhancement). Reached over 250 000 SMEs • Key micro-credit guarantor (EUR 180m) • Luxembourg, 70 staff

7. Agenda Presentation of EIF Technology Transfer in Europe Technology Transfer Accelerator project

8. Technology Transfer critical link between a bright invention and a business Licensing Proof-of-Concept / Prototype R&D / patent Growth company Spin-off Start-up • Tech. Transfer office • Tech. Transfer office • Incubator • Business Angels • Founders • Friends / family / fools • Venture Capital • IPO • Trade sale Series A Series B Series C Seed capital

9. Europe falling behind in research • EU-US R&D Gap:€ 130 bn every year & growing • Public funding gap € 25 bn • Businessfunding gap € 105 bn • US has early-mover advantage in many technologies • US built favourable environment over the years • US reaches scale faster, crowding out smaller players • US has advantage of large homogeneous market • E.g. federal / state funding 90 / 10 in US; EU / national funding 10 / 90 in Europe • US is an attraction pole • “Brain drain” • E.g. decision by Novartis to move research operations to Boston • E.g. GlaxoSmithKline relocated research HQ to Philadelphia

10. Multiple issues in Tech Transfer in Europe • VC community typically does not address seed stage • Too small / too risky / too complex • Current European technology transfer mechanisms are insufficiently developed • Lessons to be learnt from multitude of initiatives • (iii) EU clusters do not talk to one another • They often relate better to US clusters (Owen/Pammolli study) • (iv) Non-European operators best at poaching European ideas

11. EU clusters do not talk to one another Biotechnology clusters: relationships between main clusters

12. Agenda Presentation of EIF R&D in Europe Technology Transfer Accelerator project

13. TTA based on simple ideas • While European research is world class, it is not commercialised to its full potential • In particular lagging behind US • This does not necessarily mean that solution lies in mimicking US • A model that works in Europe must be developed  • Premises: the TTA would: • Operate commercially and independently on European basis • Target advanced and emerging technology sectors • Find, develop and optimise European ideas from research and academic institutions, for sale primarily to the venture capital and corporate community

14. Possible concept for a TTA in Life Sciences Investors Private funding (financial / strategic / VC investors) Public funding (PPP, EIF) University A • € 50 – 100 million funding • European outlook • Skill mix: tech / IP / mgt / VC • “Long enough” duration (15 – 20 years?) Tech transfer operator B IPR / royalty agreements TTA Life Sciences Research foundation C Cancer projects Vaccine projects Tissue reg. projects Research Center D Tech Transfer Acceleration … … … … … Sale to VC / Corporate

15. TTA Project Planning 2004 2005 Jun Sep Oct Nov Jan Jul/Aug Dec Feb Mar Apr 1 2 3 4 5 6 7 8 9 Months  Benchmarking  Mapping of IPR systems  Identification ofparticipating centers  Legal and tax structure  Managing team  Financing  EIB involvement Key milestones Analysis ofexisting situation Legal & taxstructure of TTA Outline ofstructuredvehicle

16. Conclusion • Not a definitive answer or a recipe but one attempt to optimize investment in R&D/innovation • We have much to learn: iterative process • Objective: build a pilot to prove concept • Ideas and discussion welcome, thank you for listening!

17. EU clusters do not talk to one another (2) MINN University of Minnesota (MN) MIT Massachusetts Institute of Tech. (MA) MP Max Planck Institut (Germany) MRC Medical Research Council (UK) MSIN Mount Sinai Hospital (Canada) NCU University of North Carolina (NC) NIH National Institutes of Health (MD) NYU New York University (NY) OREG University of Oregon (OR) PENN University of Pennsylvania (PA) PITT University of Pittsburgh (PA) PUR Purdue University (IN) SCR Scripps Research Institute (CA) SFLU University of South Florida (FL) SK Sloan Kettering (NY) STAN Stanford University (CA) TEMPLE Temple University (PA) TEX University of Texas System (TX) TJEFF Thomas Jefferson University (PA) TUL Tulane University (LA) UAB University of Alabama (AL) UC University of California System (CA) UTAH University of Utah (UT) UWA University of Washington (WA) WA Washington University (MO) WAU Wisconsin Alumni Research Found. (WI) WI Wistar Institute (PA) YU Yale University (CT) • ARCH Arch Dev. Corp., Univ. of Chicago (IL) • BETH Beth Israel Hospital (MA) • BETM Beth Israel Medical Center (MA) • BW Brigham and Women’s Hospital (MA) • CEDS Cedars-Sinai Medical Center (CA) • CH Children’s Hospital Medical Center (MA) • CNRS Centre Nat. de la Recherche Sc. (France) • COL Columbia University (NY) • COMM Commonwealth Sc. And Ind. Res. Org. (Australia) • CORN Cornell Research Foundation (NY) • CSH Cold Spring Harbour Lab. (NY) • DF Dana-Farber Cancer Institute (MA) • DK German Cancer Institute (Germany) • DUKE Duke University (NC) • EMORY Emory University (GA) • FH Fred Hutchinson Cancer Res. Center (WA) • FLU University of Florida (FL) • GSU Georgia State University (GA) • HARV Harvard University (MA) • IC Imperial Cancer Research Fund (UK) • IL University of Illinois (IL) • INSERM Institut National de la Santé et de la Rech. Médicale (France) • IOWA University of Iowa (IA) • IP Institut Pasteur (France) • JH Johns Hopkins University (MD) • LUDC Ludwig Inst. For Cancer Res. (Switzerland) • MEL University of Melbourne (Australia) • MGH Massachusetts General Hospital (MA) • MICH University of Michigan (MI)