Practical Structures and Lessons from Collaborations The BTG
Practical Structures and Lessons from Collaborations: The BTG Experience Dispute Resolution in International Science and Technology Collaboration - WIPO Ian Harvey Retired CEO, BTG plc Chairman, Intellectual Property Institute & UK Government Intellectual Property Advisory Committee 25 April, 2005
Agenda • BTG • Licensing – examples/lessons • Ventures – examples/lessons
BTG’s business: Creating value through investing in IP and technology, and in early stage ventures Realising value through technology licensing, patent assertion and the sale of equity
BTG – key statistics 100+ staff 29 ventures $100 m revenue Philadelphia London 280 technologies Tokyo 200 licences 3800 patents
TECHNOLOGY COMMERCIALISATION DEVELOP DEVT/MFG & SELL LICENSE VENTURE IDEA PATENT ENRICHMENT
TECHNOLOGY COMMERCIALISATION - BTG DEVELOP DEVT/MFG & SELL LICENSE VENTURE IDEA PATENT ENRICHMENT
BTG: Business Process 35% US, 30% EU, 35% UK 50% Corporate, 50% University 80% Revenues US 5 licenses: 1 startup
License vs Equity Income – 3 year average (US and UK Universities) Source: AUTM; HEFCE
BTG: Core Skills for Creating Value
What are we transferring? • Background knowledge? • Research expertise? Research collaboration • Knowhow? • Copyright? • Patents? Formal technology transfer
A patent is a powerful but uncertain right • An invention may be patentable, but you may not have “freedom to use” your invention – A patent gives you the right to stop other people using your invention commercially – A patent does not give you the right to use your invention (a patent is a “negative” right) – NEVER warrant a patent! • A patent is a national right – “world patents” are very expensive – choose carefully • A patent may be invalidated at any time - NEVER warrant a patent! • If a patent is successful, you will have to sue
BTG’s Product History 2001 1966 Pyrethrin insecticide 1964 Cephalosporin antibiotics 1960 Continuously Variable Transmission (CVT) 1988 Torotrak formed 1984 MRI licensed to General Electric US FDA approval of Campath. TM 2000 s 1980 s 1960 s 1948 EU approval for Mab. Campath. TM 1990 s 1970 s 1957 Interferon discovered 1958 Hovercraft story 1971 Cholesterol Assay tests 1972 Interferon US patent granted Glass Ionomer cement for dentists 1974 Oxford 3 -part knee Magnetic Resonance Imaging (MRI) 1996 Disposable Contact Lenses: Bausch & Lomb 1997 FDA: Factor IX treatment for Haemophilia B Two-part hip cup 1999 Provensis Ltd: Varisolve. TM
Magnetic Resonance Imaging (MRI) • Funded development of technology from 1974 -1980 from Nottingham (Peter Mansfield) and Aberdeen Universities • BTG combined the IP from three different universities creating a true technology portfolio • Clinical equipment became available in 1983 and was in clinical use in 1985 • Between 1986 and 1989 99% of the world’s MRI manufacturers were licensed including GE, Marconi, Siemens, Toshiba, Hitachi and Shimadzu, Bruker, Fonar and Esaote. 2003 Nobel Prize for Medicine: Sir Peter Mansfield
MRI – inventor/university extracting value • Invention can come from the most unexpected people and places • Patent well, early and widely • You cannot pick winners – kill the losers early – it’s a portfolio business • Monitor the market place • Sue those who do not pay • Pick your enemy wisely (the easier ones first) • Audit your licencees
BTG’s Product History 2001 1966 Pyrethrin insecticide 1964 Cephalosporin antibiotics 1960 Continuously Variable Transmission (CVT) 1988 Torotrak formed 1984 MRI licensed to General Electric US FDA approval of Campath. TM 2000 s 1980 s 1960 s 1948 EU approval for Mab. Campath. TM 1990 s 1970 s 1957 Interferon discovered 1958 Hovercraft story 1971 Cholesterol Assay tests 1972 Interferon US patent granted Glass Ionomer cement for dentists 1974 Oxford 3 -part knee Magnetic Resonance Imaging (MRI) 1996 Disposable Contact Lenses: Bausch & Lomb 1997 FDA: Factor IX treatment for Haemophilia B Two-part hip cup 1999 Provensis Ltd: Varisolve. TM
Factor IX Treatment of haemophilia B • Treatment for 13, 000 haemophiliacs worldwide - additional use to prevent bleeding episodes • Strategy: Bundled technologies from University of Washington and Oxford • Result: – Licensed Genetics Institute (AHP) and five others – BTG Bene. FIX revenues £ 11. 4 million p. a. – Protein market maturing – Licencees developing gene therapy applications
Factor IX – enabling product development • Remove uncertainty - it prevents investment • Be creative in dealing with conflict (US patent interference) – Accept a smaller piece of a bigger cake • don’t be greedy • aim for win-win – Build portfolios • Don’t listen to those who shout loudest • Draw in all the skills – this is a complex team business
BTG’s Product History 2001 1966 Pyrethrin insecticide 1964 Cephalosporin antibiotics 1960 Continuously Variable Transmission (CVT) 1988 Torotrak formed 1984 MRI licensed to General Electric US FDA approval of Campath. TM 2000 s 1980 s 1960 s 1948 EU approval for Mab. Campath. TM 1990 s 1970 s 1957 Interferon discovered 1958 Hovercraft story 1971 Cholesterol Assay tests 1972 Interferon US patent granted Glass Ionomer cement for dentists 1974 Oxford 3 -part knee Magnetic Resonance Imaging (MRI) 1996 Disposable Contact Lenses: Bausch & Lomb 1997 FDA: Factor IX treatment for Haemophilia B Two-part hip cup 1999 Provensis Ltd: Varisolve. TM
Two-Part Hip Cup Pelvic socket for optimal bone securement together with the best range of motion • History: BTG filed patents on UK invention (April ’ 82) Interference declared at USPTO (January ’ 92) J&J acquired JMP (June ’ 95) Blocked opportunity • Strategy: Agreement on arbitration and licensing with J&J (March 1996), BTG to license remainder of industry Complex litigation situation • Opportunity: Hip replacement prosthesis - $720 million pa Bundling opportunity • Result: BTG licensed 9 companies in a worldwide licensing campaign including Osteonics, Howmedica, Stryker, Smith&Nephew and Biomet
Hip Cup – resolving commercial problems • Find an inventor who kept immaculate notebooks • Don’t panic when sued for $600 million • Aim for win-win – arbitration was effective • Mediation can be abused • If win-win does not work, bring in the heavy artillery • Have enough money to pay for the shells and the people to aim the guns • Have patience – it takes time
BTG’s Product History 2001 1966 Pyrethrin insecticide 1964 Cephalosporin antibiotics 1960 Continuously Variable Transmission (CVT) 1988 Torotrak formed 1984 MRI licensed to General Electric US FDA approval of Campath. TM 2000 s 1980 s 1960 s 1948 EU approval for Mab. Campath. TM 1990 s 1970 s 1957 Interferon discovered 1958 Hovercraft story 1971 Cholesterol Assay tests 1972 Interferon US patent granted Glass Ionomer cement for dentists 1974 Oxford 3 -part knee Magnetic Resonance Imaging (MRI) 1996 Disposable Contact Lenses: Bausch & Lomb 1997 FDA: Factor IX treatment for Haemophilia B Two-part hip cup 1999 Provensis Ltd: Varisolve. TM
Campath® • humanised monoclonal antibody directed against the CD 52 antigen Carbohydrate • depletes immune cells implicated in variety of immune-related disorders • reverses or halts progression of CLL by depleting the malignant B cells associated with the disease Human Ig. G 1 construct Murine CDR’s
Corporate changes – Campath licensing Genzyme Ilex Millennium Genzyme Millennium Ilex Leukosite Millennium – Ilex JV Glaxo. Wellcome Leukosite – Ilex JV Wellcome Leukosite Wellcome Schering Berlex
Campath – product enabling • Write good, strong legal agreements • Enforce your agreements • Be creative laterally and in size • Write good patent-term extension clauses in agreements • Be patient • Audit licencees
VENTURE INVESTING
BTG Ventures Thorlock Vision. Tec
Lessons – startups • Think through licence v startup – a startup is (almost) a one-way street • Recruit a world class board • Recruit the best CEO you can find • If the CEO is not delivering, find a new one • Beware licensing and investing • Beware minority investor protections • Beware role conflicts as director and shareholder • The investment will probably fail
IP Lessons • Get the IP right early - create strong IP portfolios • Bring together technical, commercial, patent, legal people • Think IP strategically: manufacture/sell or partner or license or startup or a combination • Think IP globally: – The US is the most important market, but…. – “the US is a shark pool” • When there is a dispute try ADR • Have the money to pay the lawyers • Don’t be greedy ( be lucky)
Practical Structures and Lessons from Collaborations: The BTG Experience Dispute Resolution in International Science and Technology Collaboration - WIPO Ian Harvey Retired CEO, BTG plc Chairman, Intellectual Property Institute & UK Government Intellectual Property Advisory Committee 25 April, 2005
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