Roundtable: from innovation to commercialisation - Part I: research and business

Panellists
(Front row)
Dr Bernie Tuch – Director – NSW Stem Cell Network
Dr Trevor Davies – Partner – Allens Arthur Robinson
Professor John Shine – Executive Director – Garvan Institute
Michael Quinn – Managing Partner – Innovation Capital
Dr Anna Lavelle – CEO – AusBiotech
(Back row)
Dr Wallace Bridge – Director, Entrepreneurs in Science Unit – University of New South Wales
Tony Gellert – Manager – PricewaterhouseCoopers
Tim Dean – Editor – Australian Life Scientist
Associate Professor Jim Patrick – Chief Scientist – Cochlear
Professor Mark Baker – Chair of Proteomics – Macquarie University

Tim Dean, ALS: What should we be aiming for in terms of commercialisation? What are the end goals? And how is Australia performing in terms of commercialisation today?

Tony Gellert, PricewaterhouseCoopers: It depends how we measure success. Is it making sure that technology is moved out of the university and has some value attributed to it? Or is it taking it through to a product in the market? Success could just be ‘let’s just get it out the door.’ Is it ever realistic that we, in Australia, can be taking products through ourselves with the resources we have here?

In recent years, there have been a number of deals between local biotechs and big pharma overseas which, putting aside the argument over whether sufficient value has been realised, does demonstrate the high regard that Australian-based R&D does have globally and our ability to extract value from these research activities.

Michael Quinn, Innovation Capital: This is a great nation at pouring lots of money into research. I think there’s an imbalance in the amount of money going to researchers against the amount of money going to commercialising it. When it comes to the good work that comes out of universities, you can generally find financing – not to say it’s easy – but sufficient money is there. Although follow-on money to fund business after the initial round is more challenging because VCs don’t have much money at the moment.

John Shine, Garvan Institute: I think we’re kidding ourselves if we think an institution is going to take a discovery all the way through to the marketplace; that’s not the expertise we have. So what you have to do is add as much value as you can, and pick the right partner to do that. What you need is the discovery, then you need a champion to push it through and drive it, someone with a commercial interest in it.

You need commercial investment – a venture capitalist or biotech company – not just for the few million bucks they put in but for the fiscal regime and business acumen to make it work. You then also need government funding. Certainly in Australia, because the VCs don’t put a large amount in and are very risk averse, so you need that leverage from government funding. It’s all about staying power.

Tim Dean: What is the relationship between researchers and business? Is there effective communication between researchers and business?

Wallace Bridge, University of New South Wales: University researchers are not measured by their commercial output; they’re measured by the peer-reviewed publications they put out and the number of government grants they secure. If an academic looks at their findings and thinks there’s an opportunity, they’ll go to the technology transfer or commercialisation arm.

That sets in track a whole lot of processes that may lead to a provisional patent, then to a PCT [an international patent], and maybe no further than that. The most likely way of commercialising university developed IP is to license it rather that to start-up a new business. Commercialisation can be extremely distracting for an academic. It can put limitations on whether they can publish or not, and that’s working against how they’re being measured in their role.

Mark Baker, Macquarie University: Once the research is funded, if we look at how many provisional patents end up as granted patents, it goes from two per cent to 33 per cent, depending on the university.

Wallace Bridge: The business development managers are measured on the number of notifications they get. The emphasis isn’t on the deals getting done. A big issue is that if an academic has gone down the commercialisation pathway and nothing’s happened by the time the patent is entering the national phase, then the commercialisation arm will drop it.

If they haven’t got a partner to support it, they can’t take on the financial risk. If the patent application is dropped, then as far as the university is concerned the academic has achieved effectively nothing in terms of their job description; no publications and no revenue.

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Tim Dean: Are universities and research institutes aware of the best way to identify and protect their intellectual property?

Trevor Davies, Allens Arthur Robinson: I don’t think universities know where they have good IP. There’s a disjoint between what IP they have versus how that IP can be used in a commercial situation. All universities seem to have their own tech transfer model, and most of those models have seen very little success. I view the patenting process as insurance.

The low success rate of transition from provisional patents to the granted patents may not necessarily be bad if all the opportunities have been explored to commercialise that IP. One big mistake universities make is they spin out companies based on one filing and one invention. That’s not how business works. You’ve also got to protect improvements. They’ll be working on this innovation for maybe four years with no filings, no protection for improvements.

Tim Dean: Is there a conflict of interest between publishing and patenting, particularly in what a researcher can disclose about their research?

Trevor Davies: There is ignorance in that area. You hold off publication, but you do not prevent publication. You can balance the two. I’ve seen a number of academics who see patenting as a means to obtain money to carry on their research.

A research institute has to say they’re going to commit to patenting, either directly or indirectly providing funding for a project, so they don’t have to rely on government funding, and push that innovation forward, but few are brave enough to do that.

Wallace Bridge: One problem with patenting rather than publishing is that it takes a lot of time to patent. When they report to the commercialisation arm, they might have enough for the provisional patent, but the full specification takes a lot more effort.

I don’t know of any commercialisation arm that provides them with funding for this additional work, so the academic has to divert their current funding and manpower to providing those examples. By using those resources, they’re not working on other non commercial projects, which would be more likely to generate career promoting peer-review publications.

Michael Quinn: I think research at universities should be research for research’s sake. Commercialisation should not be on researchers’ minds. They do need to have some level of understanding, so if some bit of research does pop out that does have a commercial opportunity, then it’s handled in the right way. But I agree with Wallace that many commercialisation offices around the country don’t have a clue.

Wallace Bridge: I’d like them all joined into one so you get a critical mass.

This feature appeared in the May/June 2010 issue of Australian Life Scientist. To subscribe to the magazine, go here.