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Commercialization of Publicly Funded R&D : Mechanisms and Approaches within U.S. Agencies & S&T Organizatio

Commercialization of Publicly Funded R&D : Mechanisms and Approaches within U.S. Agencies & S&T Organizations Abroad Carlos E. Gutierrez Chief Strategy Officer Larta Institute June 2011. Our Mission.

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Commercialization of Publicly Funded R&D : Mechanisms and Approaches within U.S. Agencies & S&T Organizatio

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  1. Commercialization of Publicly Funded R&D: Mechanisms and Approaches within U.S. Agencies & S&T Organizations Abroad Carlos E. Gutierrez Chief Strategy Officer Larta Institute June 2011

  2. Our Mission To vastly improve the transition of scientific and technological breakthroughs from the lab to the marketplace, and to help government-funded entrepreneurs/innovators create self-sustainable enterprises

  3. US and Global Clients/Partners

  4. About Larta Background • Founded 1993 as a public –private partnership • Non-profit, private corporation • Innovation policy advice for both national and regional economies around the world to build strong ecosystems • Design and execution of programs (for US and Global Partners) to accelerate the market readiness of early stage enterprises: • Commercialization from emerging R&D-based enterprises • Commercialization Assistance Programs (CAPs) • University technology transfer • Technology Transfer Programs (TTPs) • Foster strategic relationships with capital providers and industry partners Core Services

  5. The US Experience - The SBIR & STTR Programs Funding to Support R&D Activities SBIR • Started in 1982 • All 11 agencies participate • 2.5 % of agency R&D budget • Currently $2 Billion • $14 Billion Awarded via 50,000 grants since Inception STTR • Started in 1992 • The largest 5 agencies participate • DOD, DOE, NIH, NASA & NSF • 0.3 % of agency R&D budget • Currently $100 Million • Small business must have partnership with non-profit research institution • university or research center • 531 Publicly traded companies • Qualcomm, Millenium, Amgen, JDS Uniphase etc. • 1,200 M&A deals to date • 552 current VC-funded companies

  6. A Three-Phase Program • Grants $100K – $300K • 6 – 12 months • Support exploration of technical merit or feasibility Phase I: Start up Phase • Grants from $500K - $3M • 12 to 24 Months • Refinement of technology Phase II: Expand idea, find commercial outlets • No more government grants • Private funding • Exit: sales, IPO, licensing, etc. Phase III: Commercialization

  7. The US Experience - The SBIR & STTR Programs Mechanism to support commercialization of publicly-funded R&D Challenge: • Agencies realized that they only provided support to one piece of the equation (R&D work), but had no instrument to facilitate the market readiness/awareness/connections for innovations headed by a PI (principal investigator) with a scientific/research background. Solution: • Agencies contract with external partner organizations to design and implement Commercialization Assistance Programs (CAPs) for their grantees.

  8. Objective of Larta CAPs Prepare tech-based enterprises to cross the Valley of Death Larta mentors emerging companies, and connects them to the right people, capital and resources.

  9. Commercialization Assistance Programs (CAPs)— A Virtual Model • Provide SBIR/STTR grantees with focused assistance to refine their business models, accelerate the commercialization of their IP, and foster connections with investors/partners • Larta designs and manages CAPs for 5 of the largest SBIR/STTR programs of the federal agencies: NIH, USDA, NSF, TATRC (US Army) and DOE

  10. Larta U.S. CAPs • National Institutes of Health • 80+ SBIR Phase II companies each year • Medical devices, pharmaceuticals, diagnostics, healthcare IT, biotech, etc. • 18 months of tracking after the program • National Science Foundation • 250+ SBIR/STTR Phase I companies each year • Industrial technology, cleantech, energy, advanced materials/nanotechnology, electronics/IT, chemical-based technologies, etc. • US Department of Agriculture • 40+ SBIR Phase II companies each year • Food and nutrition, precision agriculture, animal health, plant science, biofuels, etc. • US Army - TATRC • 25 SBIR Phase II companies each year • Healthcare IT, Mobile Health, robotics, simulation software, etc. • US Department of Energy • 125 SBIR Phase II grant applications reviewed each year, with recommendations provided for funding grants • Energy efficiency, renewable energy, wind, solar, green materials, sensors, generation, etc.

  11. Anatomy of a CAP: NIH-CAP Case Study • Funded by NIH, developed and managed by Larta Institute to assist SBIR Phase II NIH awardees with commercialization. Since 2004. • Designed to help small life science and healthcare companies to develop their commercial “profile” and transition their SBIR-funded technologies into the marketplace • Competitive process: 80 companies selected from among 250+ eligible ventures • The company’s “decision maker”/CEO is encouraged to participate in the CAP as the CAP-Leader • Sponsored (financed) by NIH. • 10 month program (virtual and face-to-face). • Combination of: • Intense 1:1 mentoring by Larta Principal Advisor • Feedback Sessions with external 3rd party experts (investors, industry, IP strategists, regulatory specialists, etc.) – Boston, DC, Los Angeles • Strategic Introductions through Larta Industry Advisory Boards (IAB)

  12. Larta Industry Advisory Boards (IAB)

  13. NIH-CAP Case StudyDeliverables • The development of a Market-Driven Presentation. The presentation will convey the company’s value proposition and will embody and address the critical components of a market entry strategy: technology, Intellectual property, markets and market need (problem), management, manufacturing/business model and adoption issues, and strategic alliances. • A 2-3-page Commercialization Strategy Report(CSR) document which includes a Barriers to Commercialization document, a Competitive Matrix, and aCommercialization Roadmap or schedule of budgetary and operating milestones. The Commercialization Strategy Report will summarize recommendations and next steps that will help the company meet the commercialization objectives that were outlined earlier.  

  14. NIH-CAP 2010Companies by Industry Sectors

  15. Metrics: NIH-CAP Case Study • Mentored over 600 NIH-funded companies • $397 million raised by companies attributable to Larta impact* • 10 acquisitions (8 companies, 2 technologies) NIH-CAP: 2004-Current • 302 deals made • 500+ initial proposals & term sheets created • 1,800 CDAs signed • 3,600 meetings with investors & partners arranged Additional Partnership & Deal-Related Activity * http://grants.nih.gov/grants/funding/cap/success_data_NIH_CAP.pdf

  16. Larta - Global Bridge Initiatives • Defined: CAPs designed for innovation agencies/S&T organizations around the world • Aligned with innovation policy objectives and integrated with key stakeholders (universities/research institutes, industry, economic development agencies) • Focused on internationalization of early stage R&D-based ventures and developing linkages to U.S. partners • Strong component of technology transfer for benefit of the regional partner • Supports sustainability • Builds local capacity for regions to manage their own commercialization efforts • Linkage to Larta Institute as a ongoing U.S.-based partner

  17. Carlos E. Gutierrez ChiefStrategyOfficer cgutierrez@larta.org 606 S. Olive Street, Suite 650 Los Angeles, CA 90014 ph: 213.538.1453 fx: 213.622.6230 www.larta.org

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