TTO CIRCLE SATT - The new French model for TTO C. Esteve, President N. Carboni, President SATT IdF Innov SATT Conectus Alsace Contribution of V. Lamande, President, SATT Ouest Valorisation France’s paradigm shift: Building competitivness out of public research Last ten years approach • A new legal framework for research and innovation (1999/2002) o Foster the creation of start-ups & the participation of public researchers as shareholders o Creation of “public incubators” to foster the development of start-ups • A shift towards a “project-based” funding mechanism for public research (2005) o Creation of the “National Research Agency”, operating under a “competitive call for proposal” system 10 Last ten years approach • A revamped « R&D Tax credit » system to attract and develop private R&D investment (2005/2008) o Tax credits from 500M€ in 2003 to over 5B€ in 2012 o Most competitive rates in Europe: o 30% to 40% tax credit for private R&D o 60% to 80% for R&D subcontracted to public laboratories ! • Creation of competitiveness clusters: building competitiveness out of public research (2005) o Strengthen regional innovation systems through collaboration between Industry - Research - Training (triple helix) o Develop and fund collaborative research programs between public labs and companies: over 3B€ funding Last ten years appoach • « Investing for the Future » Program: a bold answer to crisis (2009/2011) o 22B€ to fund projects presented by public entities or public/private consortia, to “feed” tomorrow’s competitiveness” o Competitive calls for proposal – International Jury: funding excellence in a meritocratic system o An Investment, not a grant: ROI (financial & socio-economic) is required o A 10 year funding: visibility & sustainability • Few emblematic calls: o Campus of Excellence (800M€/1B€) to attract and retain talent/ University -Hospital Institute (IHU) / Technological Research Institute (IRT)(150M€/300M€): focused research operator in Public Private Partnership Super TTOs: consolidating collaborative research, investment in “Proof Of Concept”, and licensing (35M€ / 70M€) Tech Transfer context in France Tech Transfer French Specificities… and weaknesses • 80+ autonomous universities looking for critical size • CNRS, a large national research organisation associated to univs. having delegated its TT to it’s private TTO • Strong national thematic research organisations having a long tradition in TT (CEA, INSERM, INRIA, INRA…) • In the past 6 years: Emerging “local” entities: o At regional level (i.e. Bretagne, Aquitaine, Alsace) o At municipal level when big enough (Paris, Lyon, Toulouse) • Large gap remaining in Proof of Concept funding despite some experimentations in the past 6 years Key weaknesses: Fragmentation and lack of critical mass for Universities SATT: A new tool for TT in France © V.Lamande & N.Carboni SATT: What is it? • Why SATT? o Reduce fragmentation of TT system: A unique gateway for TT on a territory o Improve operational efficiency o Foster absorption of technologies by companies (SMEs) through Proof of Concept funding o Create competitivness, jobs and wealth of out public research • A fully owned subsidiary of public research operators in a given territory o Private corporation, 1M€ capital o Board with 12 membres 8 representing public research organisation 4 representing central government o External Investment Committee Which activities for which fundind ? • Mandatory activities o Exclusive IP management & licensing on their territory o Investment in IP & Proof of Concept o Services sold to research operators at market price • Non mandatory activities o R&D contract management (signing, invoicing) o Platform management o Incubation • From 36M€ to 78M€ per SATT Funding is 95% focussed on the « Investment » activity SATT in France 12 SATTs at a glance Existing SATTs 63 SATTs to come Ile de France 78 6 7 36 8 0 60 60 Dotations en Millions € Lutech 78 SATT Sud-Est 78 60 Ouest Valorisation 70 Toulouse Tech Transfer 70 7 IDF - Innov 68 78 Nord de France 63 0 4545 1200 Aquitaine 48 Languedoc Roussillon 45 Conectus Alsace 36 Grand Est 60 Grand Centre 60 Profit centers • Investing in IP & POC towards licensing o +90% of funding directed towards investment activities o Average investment: 250k€ / project o Break even: 8 to 10 years o A structured process supported by strong external expertise • Providing services to public research organization o Aiming at developing public private partnerships o Covers busines development, contract negociation, capability mapping o Invoiced at market price o Break even in 3 to 5 years © V.Lamande & N.Carboni Proof of concept Fundamentals • SATT are investing in Proof of Concept, and capture a portion of licensing revenues o Funding is provided to SATTs by « Caisse des Dépôts » (shareholder’s account - 10 years - no interest) o Investment in POC can range from few K€ to several hundred K€ o Preliminay studies (IP, market, competitive positioning, regulation…) can be funded o Usually clear milestones and Go / No Go • Revenues sharing mechanisms which allow long term break even on the investment activities o SATT capture from 80% to 100% of revenues up to break even o SATT capture 40% to 60% of revenues after break even Constructing & investing in POC projects: a structured process POC Investment from a private corp.: a cultural shift for TTOs business officers An illustration for Conectus Alsace PNDS RP-Cilia S100b CLD 172 k€ 185 k€ 250 k€ 141 k€ TransPep 304 k€ AIR-CPG MannoVirocide 194 k€ 344 k€ Nanograft 219 k€ POLARIS 116 k€ Dosimed 185 k€ Niveau de risque Niveau DiCD 178 k€ Riboviz Synaggreg162 k€ 2 752 K€ investment on 14 102 k€ NGS-QC 150 k€ POC projects Impact socio-économique Bubble size: DCF start-up POC Investment projects: an illustration for IdF Innov Projects Sector What? Lenght Investment Nef AIDS Health POC 18 mois ~200 k€ 1er CI Kit GVH Health POC + kit 18 mois ~200 k€ (dec 2012) Ostéogénèse Health POC + startup 12 mois ~200 k€ 3D modelization TIC Proto + startup 9-12 mois ~120 k€ Vaccine AIDS Health POC 24 mois ~220 k€ 2ème CI Télomérase/cancer Health POC + hits 18 mois ~160 k€ (fev 2013) Alzheimer Health POC 16 mois ~200 k€ Breast HER2 Health POC + hits 23 mois ~240 k€ Cellular Therapy Health POC 24 mois ~230 k€ 3ème CI Crohn Health POC 23 mois ~240 k€ (juin 2013) Crème antalgique Health POC 13 mois ~170 k€ Murine model Health Dev. modèle 15 mois ~80 k€ SATTs in France as of May 31st 2013 • 9 SATTs created (5 in early 2012, 4 in july 2012) and 3 being incorporated • 733M€ of funding to invest in IP and Proof of Concept • 293 professionals on the field (scouting, project management, business development, legal…) • 705 projects scouted and analyzed • 186 patents filled • 173 Proof of Concept projects launched • 39 licence deals closed – 15 start-ups created Key challenges and opportunities Few challenges… at the SATT level • Transforming a « technology push » approach into a market pull process • Changing the culture of « business officers » in constructing POC projects and applications • Building a sustainable and reliable expertise process to evaluate risks, without sterilizing the process • Balancing objectives of ROI and « economic development » – which might not be converging - in the construction of an investment portfolio Key challenges and opportunities • Finding the right articulation between local, regional (SATT), national and european level o Some « contractual research offices » are still remaining at the local level, in some Universities o Is the right model to consolidate ALL activities (contractual research and TT) within a sole structure at the regional level? • When should SATTs turn towards a national actor to drive IP management and transfer of a given technology? o An « IP pooling » rationale o A long term development cycle for the technology o A strategy driven at the national level for the technology • How to construct strategies and patent pools at the european level? Key challenges and opportunities • Building convergence and synergies between the various funding mechanisms at local, regional, national and european levels • Creation of SATTs, heavily funded by contral government, challenges the role of local and regional governments o Move towards integrating local and regional governments in SATT governance… o To avoid the creation of competitive funding mechanisms • POC funding at the european level can be either destructive or synergistic for existing entities o Creating a competition for good projects between existing entities and a european mechanism… o Capitalizing on existing entities to boost their investment capabilities Role & position of the European level? Ideas on these challenges? Thank you! .