Technology Commercialization & Industry Partnering The Neilson Society November 7, 2017 Michael Villalobos, Ph.D. Manager, Biotech Licensing Thomas Utley, Ph.D. Licensing Officer

Overview Do I have something of value? How do I protect/retain that value? What is my path to market?

Underlying Concept RISK VALUE

Commercialization Process

Risks Types of Risks IP Technology Regulatory Reimbursement Market

Risks Majority of university inventions are near PoC stage Many not tested outside of creator base Records may not be FDA compliant Final product may not have freedom to operate Technology failure possible Unknown in-house competitive technologies After all this there are business risks

Value Technology Risks Stage of Development Concept Proof of concept Prototype developed Therapeutic molecule identified Validation ex-vivo in-vivo Customer acceptance / Clinical data Value

Advancing Development Collaborate with colleagues Hire contract development firm Ask colleagues or TTO for references Look at university and private contractors Collaborate with a corporation Publish to attract attention

Market Dynamics Total market v. Addressable market Who will actually use the product? Size (e.g. affected patient pop.) Does the size justify the invention? Penetration What is realistic? Are you really going to steal market share?

Market Dynamics Competitive Environment Products & companies Strategic partners Technologies in development Companies Universities

Additional Risks Regulatory Impact Pricing Medical Device / Diagnostics: Class I-III / RUO, CLIA, CDRH Pharmaceuticals / Biologics: CDER, CBER Nutraceuticals: OTC/DTC Agricultural: EPA Pricing Payor reimbursement Established CPT code? Direct-to-consumer

Risk Profiles Characterization of Risk Product Technology Existing Customer Demand Startup Very Low Risk Pre-existing Incremental improvement Yes No Low Risk Pre-existing, New features Moderate Risk New High Risk Very High Risk Extremely High Risk

Contractual Fences CDA/NDAs MTAs Co-Development Agreements Protect trade secrets and know-how Should be defined in scope Retains patent rights MTAs Controls use of a material & its distribution Co-Development Agreements Usually contains an MTA and CDA Defines contribution of the parties Determines benefit sharing

Paths to Market Asset Sale

Paths to Market License Form Newco Asset Sale Patents, know-how and prototypes Co-development Agreements Form Newco Sell product Development company - Seek strategic partner Asset Sale Upfont cash Milestone Payments

License Structures License Agreement Co-development Deals Upfront Fee Patent expenses Diligence events Milestone Payments Royalty on net sales Co-development Deals Sponsored Research

Alternative License Structures Standstill Agreement 1-3 months Allows analysis of the business opportunity Option Agreement 3-12 months Option fee ($5000-50,000) Patent expense reimbursement Allows PoC or validation of the technology