June 17, 2009 Ottawa, Ont.

1. New Models for Commercialization FPTT 2009 Annual Conference June 17, 2009 Ottawa, Ont.

2. AAFC in-house Science Research • Strategic alignment with government and sector priorities • Public good and high-risk discovery science • Applied/Production Science Growing Forward Collaborations AAFC activities and financial programs work together along the Innovation Continuum INNOVATION CONTINUUM DISCOVERY PHASE PRE-ADOPTION / PRE-COMMERCIALIZATION PHASE ADOPTION/ COMMERCIALIZATION PHASE Greater Government Funding Jointly Funded Greater Industry Funding Public-Private Collaborations Agri-Opportunities -Accelerating Commercialization of new market ready products, processes and services Agri-Foresight, Innovation Fora - Enhancing capacity to anticipate challenges and opportunities and to proactively take collaborative action Science to Support Commercialization of New Agri-Based Products -Mobilizing science capacity to address pre-commercialization challenges Agri-Science Clusters - Industry-led applied science CAFI - International Market Development Promoting Agri-based Investment Opportunities -Bringing entrepreneurs and investors together – Innovation Symposia Innovation Commercialization Centres -Enhancing the access and delivery of commercialization services that support business development activities of agri-based entrepreneurs Supporting Innovative Capacity of Farmers - Supporting innovators and early adopters of new technologies and practices ecoABC – Biofuels production ABIP -Interdisciplinary, multi-sectoral collaboration along the innovation chain for the development of non-traditional products from agricultural feedstocks Advancing Canadian Agriculture and Agri-food – Path finding, new opportunities, responding to emerging issues and knowledge transfer FCC Venture Capital -for growth to commercialization

3. AAFC research works across the food value-chain; we pursue an integrated system-based approach to R and D for supporting innovation

4. Current active licenses for commercialization • AAFC has 689 active licenses which together generated $7.6 million of royalties in 2008-09

5. AAFC Transfers Technology to 100 Canadian Companies (location of licensees) • Alberta 13 • British Columbia 3 • Manitoba 12 • Nova Scotia 3 • New Brunswick 2 • Ontario 26 • Prince Edward Island 5 • Quebec 23 • Saskatchewan 12

6. Distribution of variety licenses by crop • Cereal 245 • Fruit 80 • Forage 55 • Oilseed 36 • Ornamentals 10 • Other 15 • Pulse 79 • Vegetable 21

7. Technology Licenses • AAFC also develops technologies in areas of biotechnology, food products, animal health, grain quality assurance, food processes, biocontrol products, health food products, monoclonal antibodies, proteins. • Currently, there are 79 technology licenses; 32 of them generated about $ 1 million in royalties 2008-09.

8. How we’ve done tech transfer for commercialization • Formal competitive RFPs based on the most anticipated benefit to Canada arising from the investment proposal for the IP right • The MII Program which commenced in 1994 stimulated the use of CRDA’s incorporating either an option to a licence for FIP (results are pre-sold), or ownership vested with the other party • About 25% of our gross direct patent costs were recovered last year. • About 48% of our 441 patents are encumbered • The PICO precedent.

9. The AAFC-BCTFA-PICO partnership • AAFC has possibly the only sweet cherry breeding program in the World (it takes about 15 years to develop a new variety) • Our cherries are self fertile, producing large firm fruit that matures later than that of the main N.A. commodity cherry producer (Washington); they command premium prices around the World History • 1990 Canada introduces PBR. Act. • 1994 The N-F-P BCTFA creates F-P subsidiary Plant Improvement Corporation of the Okanagan (PICO) and a licence agreement is signed (renewed and expanded in 2005). • Over 90% of new BC plantings since then have been to AAFC varieties, which have also been commercialized in complementary southern hemisphere markets • Cherry exports have increased from $1 million to $20 million; cumulative royalties exceed $2 million. • PICO generates revenues from sale of fruit as well as from budwood.

10. The Growing Canadian Agri-Innovations Program components support the innovation continuum and build on existing programming INNOVATION CONTINUUM ADOPTION/ COMMERCIALIZATION PHASE DISCOVERY PHASE PRE-ADOPTION / PRE-COMMERCIALIZATION PHASE Greater Government Funding Jointly Funded Greater Industry Funding Public-Private Collaborations • AAFC in-house Science Research • Strategic alignment with government and sector priorities • Public good and high-risk discovery science • Applied/Production Science Agri-Opportunities -Accelerating Commercialization of new market ready products, processes and services Growing Forward Collaborations Agri-Foresight - Enhancing capacity to anticipate possible challenges and opportunities and to proactively take collaborative action Developing Innovative Agri-Products - Mobilizing science capacity to address pre-commercialization challenges ecoABC – Biofuels production Canadian Agri-Science Clusters - Industry-led applied science ABIP - Interdisciplinary, multi-sectoral collaboration along the innovation chain for the development of non-traditional products from agricultural feedstocks Promoting Agri-based Investment Opportunities - Bringing entrepreneurs and investors together – Innovation Symposia New Growing Canadian Agri-Innovations Program Initiatives Existing AAFC Programs

11. Canadian Agri-Science Clusters Industries nationally assembled into a NFP • Not-for-Profit (NFP) Agricultural Corporation • develop and submit the proposal • sign the Contribution Agreement with AAFC - Innovation • sign one Collaborative Research and Development Agreement with AAFC – Science • be the eligible recipient that will be reimbursed for eligible expenses • Board of Directors (BOD) • represents management • consists of agri-industry stakeholders Tech Transfer / Commercialization Finance Science Applications are industry led meaning that applications must come from industry clients 11

12. Developing Innovative Agri-Products Developing Innovative Agri-Products Initiative Industry Applicant (Farmers, agricultural organizations entrepreneurs and agri-business) Scientific Expertise and/or and/or AAFC Research Applied S&T Pre-commercialization Projects University Research Industry and other NGO Research Development of new agri-products, processes and practices Agri-Sector Profitability and competitiveness 12

13. Federal Canadian S&T funding comes in different colours Natural Resources Canada Environment Canada Canadian Food Inspection Agency Department of Fisheries & Oceans Public Health Agency of Canada Health Canada Departmental Appropriations (Vote 1) Agriculture and Agri-Food Canada Canadian Institutes of Health Research (CIHR) Other Departments & Agencies Clusters/DIAP Industry Canada Agri-Science Clusters/DIAP Vote 10 Atlantic Canada Opportunities Agency (ACOA) National Research Council Genome Canada Technology Partnerships Canada (TPC) Western Economic Diversification (WD) NSERC IRAP Canada Foundation for Innovation Extramural Grants & Contributions

14. Developing Innovative Agri-Products Developing Innovative Agri-Products Initiative $ Contribution Agreement Agricultural Industry Applicant (farm groups, agri-business) provides at least 25% of the direct project costs ($$) Vote 1 - NPO CRDA $$ CRDA $$ CRDA $,and/or$$ AAFC Research Non AAFC Federal Labs Industry, NFedGOs, Universities Applied science, technology development and pre-commercialization projects leading to the development of new agri-products, processes and practices. *CRDA – Collaborative Research and Development Agreement or service contract $ - Federal Government Contribution Funding $$ - Private Cash Funding (=>.33$) 14

15. The benefits of these new models • These programs will support technology transfer and commercialization • Focused business management of technology projects • Governance framework allows for better access to early stage financing, and R and D tax credits • Robust risk management rather than simple risk transfer.