Strategic Partnerships for Universities & Research Organisations

1. Strategic Partnershipsfor Universities & Research Organisations Dr John Turner Managing Director Flinders Technologies Pty Ltd johnvturner@attglobal.net

2. Strategic Partnerships for Universities and R&D Orgs.Significant at (1) national level & (2) enterprise level However, an OECD (1994) study found : “ Innovation performance depends not on how specific institutions perform (firms, R&D organizations, universities etc) but how they interact with each other……..” First, the ‘national’ view : We know Universities and R&D Organizations are sources of potentially valuable intellectual property and professional expertise

3. Many different models that promote IP Creation, Innovation & Commercialization : they all bring essential elements together • University linked organizations (e.g. AUTM in USA, KCA in Australia) • E.U. Innovation Relay Centers • Business Incubation Centers • Malaysia Tech. Development Corp. (targeted grant schemes) • Singapore Tech. Infrastructure & Innovation Investment • Philippines T.A.P.I. • Thailand National Science & Tech. Development Agency • China Innovation Center (Founded by CyberCity Holdings Ltd) + 15 Uni. based Science Parks • Economic Regions (e.g. Route 128; Silicon Valley) This list is not complete

4. IP WIPO undertook a study into supporting Innovation Promotion Centers to assist developing countries • IPC designed to : • bring together disconnected innovation components • stimulate & promote inventive and innovative activities • provide information, advice & assistance • manage seed capital investment fund • add value to IP-based assets and business

5. SUPPORT THROUGHPROFESSIONAL LINKAGES IPC Clients SMEs,inventors, ‘Projects’ Regional Innovation Promotion Centers Universities, R&D expertise Attorneys, Accountants, Business Consultants, International business, Management Training, Industry Assoc’s Innovation Promotion Center Project & Funds Manager Innovation Investment Funds (several industry-specific funds possible) FUNCTIONS Awareness Raising Various investors : Banks, Venture Capital, Pension Funds, Business Angels, Specialist Technology Corporations, etc Project Assessment Business plans Business Plan Implementation Office support for ‘Start-ups’ co-located with the IPCs Diag. 1

6. Report on research commercialisation performance of Australian universities & research organisations has been released Published Sept 2002 ISBN 0 95818 000 8 National Survey of Research Commercialisation, Year 2000 Australian Research Council CSIRO & NHMRC The study looked at performance comparisons (on a national basis) with Canada and the USA (for which data were available). In my view, there are weaknesses in the study, but it provides a starting point for strategic assessments and initiatives at the national level. Some results are on the following slides

7. Biological Science & Biotech. Physical, Chem. & Earth Sci. Maths, Information & Coms Sci Social, Behavioral & Economic Sci. Humanities & Creative Arts Engineering & Environmental Sci. Health & Clinical Sci. Other. Licences – distribution by originating area of research p35 National Survey of Research Commercialisation 2000 Topic 5 The Role of Universities & R&D Organizations In the Innovation Cycle 1% 19% (data removed – file too large to e-mail) 42% 17% 2% 2% 7% 10%

8. My conclusion : performance is ‘mixed’ – better success if we strategically combined key elements • Relevant and cooperative R&D base • Viable inventions and SME’s • Business incubation facilities • Experienced commercial & technical expertise • Financial base of ‘risk’ capital for investment • Supportive Government policies, programs & tax structures • Enthusiastic and committed community • Overall, less fragmentation & greater critical mass of scarce key resources : easier said than done !

9. Strategic Partnerships for Universities and R&D Orgs.Significant at (1) national level & (2) enterprise level First the ‘national’ view Second, the enterprise view – our experience : Prior to the establishment of the company Flinders Technologies, Flinders University had only made $200 in royalty payments in 20 years. Several attempts at commercializing IP had cost the University money and had not been successful. The Vice Chancellor at the time (Prof. Keith Hancock) was an economist. Broadly speaking, he reasoned it was better to have a share in something successful than 100% of nothing. Thus, he agreed to a joint venture partnership with a Venture Capital company.

10. Started as a joint venture company in 1987 Enterprise Investments Ltd Venture Capital Company Flinders University of South Australia shares July 1987 50% 50% January 1995 100% 0% FlindersTechnologies Pty Ltd Mission: To optimise the promotion and value of IP-based assets and the benefits from commercialization

11. Flinders University Shareholder Expectations Enterprise Investments Ltd • R&D funds • Inventor rewards • ‘Untied’ funds (Dividends) • Cost-savings • Linkages with ‘industry’ • Support for staff consulting • Capital gains • Dividends • ‘Star’ reputation Managing relationships can at times be difficult

12. Formal & informal relationships with shareholder Flinders Technologies Pty Ltd • Shareholder Agreement • Technology Transfer Agreement • Agreed basis for Inventor rewards • Policy for IP management in university • ‘Assistance’ to university Relations with the university are complex

13. Patent &Trade Mark Attorneys Business contacts: Manufacturers, Marketers, Finance Lawyers Accountants & Financial Advisers Professional peer groups eg. LES, KCA, AVCAL IPS (ANZ), WIPO Scientific & Technical consultants Alliances & Networks Throughout the World Professional networks help us to achieve our Technology Commercialization goals FlindersTechnologies Circles of Influence Research Groups Shareholder

14. Some of our strategies for optimising outcomes from IP commercialization • Rigorous appraisal of commercial viability • Add Value to the Project - Technical value adding (eg technical feasibility) - Commercial value adding ( eg patenting) • Reduce Apparent Risk for Investors - Substantiate technical viability (eg 3rd party verification) - Show commercial diligence (eg verification of IP, market) • ‘Seed capital’ funds are important - Enable value to be added & risk reduced - Help avoid premature deal • Harmonise Technical and Commercial Strategies - regular meetings with researchers : agreement on goals - secure IP - beware of compromising IP

15. Ions by Enzymatic Methods Clinical Diagnostic Flinders Technologies Pty LtdSome of our projects

16. Flinders Technologies Pty Ltd:Track-record • Average IRR 74% per annum for over 16 years • $21+ mil benefits to shareholder & researchers • Assets : several million $ (& off balance sheet ) • Successes (eg FTA ‘DNA processing’; Ions by enzymes; New sunscreen; YourAmigo Pty Ltd ) • Emerging successes (eg Flinders MediTech Pty Ltd & medical training devices; Re-Time Glasses & re-setting the biol. clock; Disease Profiling & new DNA process; Neugenesis Inc & recombinant DNA technology; MediMolecular Pty Ltd & new generation diagnostics)

17. Summary : Strategic PartnershipsSuccessful IP creation, innovation & commercialization Thanks forListening Again! • National level of innovation & economic performance is related to level of interaction between the key organisations • Stimulation of a national innovation system can be achieved through several different models, but a central feature is that strategic partnerships are formed as a result • At the enterprise level it’s difficult, if not impossible, to ‘go it alone’ • Better to form strategic partnerships (even if on an ‘as needs’ basis) and to share in the greater level of success and value created