K.U.Leuven Research & Development: A model for exploitation of academic research

1. K.U.Leuven Research & Development:A model for exploitation of academic research K.U.Leuven Research & Development Edwin ZIMMERMANN edwin.zimmermann@lrd.kuleuven.be www.kuleuven.be/lrd

2. K.U.Leuven: facts & figures K.U.Leuven • founded in 1425 • 30.455 students with 12,4% international students • 16.189 employees • 1.396 professors & 3. 891 researchers • 2.730 administrative and technical staff • 8.172 employees at the University Hospital (UZ Gasthuisberg) • Research expenditures (2003 figures): • 201 million EUR (+13,6% compared to 2002) • of which 40,6 million EUR (20,2%) contract research through K.U.Leuven R&D • Complete university: 14 faculties • Humanities, Exact Sciences, and Biomedical Sciences

3. K.U.Leuven R&D Research Divisions: 600 researchers (2003) K.U.Leuven Contract Research K.U.Leuven R&D Spin-offs & Regional Development IPR & Licensing Industry • K.U.Leuven Research & Development • founded in 1972 • central multidisciplinary staff of 27 people • operated as a business unit • “to promote and support knowledge & technology transfer to the university”

4. Activities • Contract Research • negotiation & legal support with respect to research contracts between university and industry • Management of Intellectual Property Rights • an active patent and licensing policy is pursued • Creation of Spin-off Companies • professional advice and support is provided to academic entrepreneurs • Promotion of High-Tech Entrepreneurship • both within university and in region

5. Spin-off creation • Support? • awareness creation & knowledge transfer • development of business plan • finding investors: Gemma Frisius Fund K.U.Leuven • finding infrastructure • university labs, Innovation & Incubation Centre, science parks • negotiation & legal support • drafting bylaws, shareholder agreements and co-operation agreements • supporting growth and internationalisation process • participation in Board of Directors • portfolio management is crucial • support innovation & high-tech entrepreneurship through networking and technology clusters

6. Gemma Frisius Fund K.U.Leuven • provides seed capital in the early phases of research-based K.U.Leuven spin-off companies • established in 1997 as a joint venture between K.U.Leuven, the KBC group and the Fortis group • GFF I founded in October 1997: • 12,5 million EUR • investment limit of 500 KEUR / project • 10,5 million EUR invested in 15 spin-off companies (1997-2004) • GFF II founded in July 2002: • 12,5 million EUR • investment limit of 1 MEUR / project • 2 million EUR invested in 5 spin-off companies (2002-2004) • partners: • K.U.Leuven (20% of capital) • Two banks: KBC Securities (40%) and Fortis Private Equity (40%)

7. Gemma Frisius Fund K.U.Leuven • combining research & technology transfer expertise of the university with financial and investment expertise of financial partners • not restricted to a specific technology. GFF considers every investment opportunity involving know-how coming from the K.U.Leuven • invested amount per year (GFF I & II combined):

8. Spin-off Creation Process K.U.Leuven R&D • intake • preparing business plan • technological due diligence • market positioning • financial plan GFF Advisory Board • financial due diligence • investment advice • iterative feed-back process GFF Board of Directors • final investment decision

9. Spin-off Creation Process Faculties, departments, research groups: international quality in research, teaching performance LRD divisions/projects Contract autonomy & flexibility incentives • LRD Research Divisions • research divisions embedded in university via matrix structure • “virtual organisations” in which (groups of) researchers (from different faculties or departments) can group their applied research, commercial-industrial and exploitation activities.

10. Spin-off Creation Process • LRD Research Divisions • important role in the incubation process of a spin-off company … • BEFORE START-UP • first “market test” within “secure” environment of university, usually through contract research • smooth transition from research division to spin-off company • technology transfer in exchange for shares • (usually) investment from (part of) division reserves in spin-off company • AFTER START-UP • partner for contract research • input from university researchers => co-operation agreement • possible use of university lab infrastructure • … but clear distinction in focus and activities between research division and spin-off company after start-up.

11. Spin-off Creation Process • Incentive mechanism: • Return through shares & warrants generate surplus value on shares • Two types of shares: • shares for capital investment • shares for intellectual property (know-how, etc.) • Valuation IP depends on various factors • IP & contracts brought in • patent portfolio • time-to-market • team

12. Results 60 companies founded over the period 1979-2004: • 25 companies over the period 1979-1997 • 35 companies over the period 1998-2004

13. Results 51 active spin-off companies (end 2004): • exploiting university research results • total turnover of +/- 300 million EUR • >1500 employees.

14. Results 12,5 MEUR invested in 20 GFF portfolio companies (end 2004): • 18 active portfolio companies • 1 successful exit (trade sale) • 1 divestment

15. Spin-off companies • Engineering • LMS: computer aided dynamic analysis (acoustics, vibration, durability) • Metris: reverse engineering & 3D quality control • MEAC: microwave energy applications for industry • Materialise: rapid prototyping services (stereolithography, etc.) • Medicim: medical imaging solutions to support diagnosis and surgery • etc. • Micro-Electronics & ICT • ICOS: vision and inspection solutions for the semiconductor and electronics assembly markets • AnSem: design of analog integrated circuits • Ubizen: provider of managed security solutions • Eyetronics: 3D-image acquisition & processing • Data4S: data management, customer behavior profiling and pattern detection • OMP: state-of-the-art antenna products & designs • Kimotion: EDA-tools for analog chip design • Hypervision, Epyc, Telraam: multimedia applications, e-learning

16. Spin-off companies • Biomedical • Thromb-X: biopharmaceuticals for cardiovascular diseases & technologies of embryonic stem cell cultures and transgenesis • 4AZA Bioscience: biopharmaceuticals for immune pathologies such as transplantation rejection, rheumatoid arthritis and septic shock on the basis of new immune-inhibitors • TiGenix: tissue engineering & cell-based therapies (repair of articular cartilage, bone & muscle) • reMYND: services & tools to support drug discovery in Alzheimer’s disease and neuro-degeneration • RNA-TEC: chemical synthesis & purification • AlgoNomics: structural bio-informatics • PharmaDM: global enabler of drug discovery analytic solutions, based on mining integrated chemical, biological and clinical data

17. Regional Development • Partners: • LRD, research centres, city of Leuven, GOM, Flanders, etc. • Infrastructure: • Innovation & Incubation Centre • 2400 m², 15-20 companies • office & production space • Science Park Haasrode • 130 ha, 150 companies, +/- 6000 jobs • Arenberg Science Park • 110.000 m² office & lab space • available from mid-2005 onwards • state-of-the-art bio-incubator (end 2006) • UbiCenter (old Philips-site) • Campus Remy (old Remy-site)

18. Networking • Horizontal Network: Leuven.Inc • network organisation stimulating contacts between university, IMEC, high-tech start-ups, innovation actors, support activities such as consulting agencies and venture capitalists, and established companies in the Leuven area. • Vertical Networks: technology clusters • DSP Valley • focusing on the design of hardware and software technology for digital signal processing systems. • L-SEC (Leuven Security Excellence Consortium) • international, non-profit network organisation dedicated to promote the use and advance of e-security.

19. Leuven – Knowledge Pearl

20. K.U.LEUVEN LRD Science Parks FINAN CIAL GFF WORLD REGION Leuven.Inc INDUSTRY CONCLUSION LRD as a Networked Incubator

21. Success factors for the exploitation of academic research results in Leuven: Basis = a critical mass of high quality research Integrated approach on research valorisation: multidisciplinary team & “high value” services Clear incentives and policies to encourage research groups and departments to actively seek knowledge transfer opportunities Creation of appropriate entrepreneurial climate in a university context Legal context with respect to exploitation of academic research in Flanders region Developing the necessary instruments and networks for the further professionalisation of technology transfer support Success Factors