Deals to benefit Canada: Strategy and approaches to making the “Right” deal for Canada Panel at the FPTT 2008 National Meeting Eileen Raymond June 2 nd, 2008 Nothing herein constitutes professional advice. The views expressed are those of the presenter and may not be shared by NRC. Copyright NRC 2008

2 Technology Transfer Process at NRC-BRI (simplified) Potential Receptor selection –Scientist’s contacts –Market studies and CISTI Deal Negotiation –Canadian Content clause –Business Decisions The current process NRC-BRI’s Mission Legal Tools Mandate Technology Business Development Impact (Benefits) R&D activities –NRC’s Strategy –NRC-BRI’s Business Plan IP Portfolio Surveys –Standard satisfaction questionnaire (ad hoc)

3 Technology Transfer Process at NRC-BRI (simplified) Business Development Impact (Benefits) Potential Receptor selection –Scientist’s contacts –Market studies and CISTI –Canadian due diligence Signed report Visibility control Deal Negotiation –Canadian Content clause –Business Decisions Surveys –Standard satisfaction questionnaire (ad hoc) –Pilot study: new models needed A suggested process including a Canadian due diligence for potential receptor identification NRC-BRI’s Mission Legal Tools Mandate Technology R&D activities –NRC’s Strategy –NRC-BRI’s Business Plan IP Portfolio

4 Mandate NRC is a Government of Canada organization. Our mandate is set out in the National Research Council Act (NRC Act). Under the NRC Act, NRC is responsible for: –undertaking, assisting or promoting scientific and industrial research in different fields of importance to Canada; NRC’s mandate is directed towards the Canadian industry NRC’s mandate is directed towards the Canadian industry

5 Technology R&D activities NRC’s Strategy Focus on Canadian issues Influence Canadian industry NRC-BRI’s Business Plan Set priorities for R&D Activities Set priorities for IP portfolio Increases chances of technology transfer to Canadian industry

6 Business Development Potential Receptor selection Scientist’s contacts –Publications –Presentations at Canadian and international conferences Market studies and CISTI –65 market studies have been carried-out to evaluate our technologies –Un-biased opinion on the potential market and a direction for further developments –List of potential Canadian and international receptors from market studies and CISTI –Insights for prioritizing our marketing efforts: High, Medium or Low (Drop or too early stage) –Licensing Opportunity Document (LOD)

7 Business Development Canadian Due Diligence Canadian firms are given a first bid at technologies List of potential Canadian receptors generated by market studies and CISTI company searches. Marketing efforts are done by the Industrial Affairs group and sub-contracted International visibility (web) delayed for one year (for non public data) Report is prepared to document technology transfer strategy, Canadian due diligence and IP protection strategy. NRC-BRI puts Canadian firms first in its technology transfer strategy

8 Business Development Deal Negotiation Potential receptors have been identified One-to-one negotiations where business decisions are taken “Canadian Content” standard Clause (2 options): –The Licensee shall perform all manufacturing of Products in Canada, and shall use Canadian-made materials in Products to the extent that they are reasonably available. Canadian-based sub-licensees shall be subject to the same requirement. Foreign-based sub-licensees are not so restricted, but they shall not be permitted to sell Products that will be imported into Canada; or –The Licensee shall make diligent efforts to produce Products in Canada or to maximize the use of Canadian-made materials in Products to the extent they are reasonably available. Canadian-based sub-licensees shall be subject to the same requirements. Foreign-based sub-licensees are not so restricted.

9 Example: Canadian Licensee Canadian Content Clause removed Canadian company based in Quebec Licence to use a biotherapeutic lead for a cancer application and R&D tools developed by NRC-BRI Complementary research service The partner could not accept the Canadian content clause. The clause was removed to conclude the deal and to allow attraction of investments Result: Over $ 2 Million in investment raised Rationale: The biotherapeutic will require massive investment from a global pharma in order to take it to market. The company’s goal was to raise the financing necessary to support the preclinical and clinical development stages of this therapeutic up to the point where it could be sublicensed to a major international player. The other technologies are non-exclusive, have no sublicense clause and are available under better term to Canadian companies. The Canadian benefit to remove the Canadian content clause is to encourage the company to maintain its operations (R&D, job creation, and foreign investment) and exploitation of the technology in Canada through close collaboration with NRC-BRI

10 Example: Canadian licensee Diligent exploitation condition Canadian start-up based in Ontario Licence option for an anti-glycation agent for retinopathy application Conditions: financing within six months and diligent exploitation of the rights granted by NRC, Canadian content clause was maintained 3 possible consequences to lack of diligence: convert any exclusivity to non-exclusivity, terminate the licence, or modify the field of use Result: no financing raised, no licence was signed Rationale: NRC-BRI found a Canadian receptor for this technology The company however was not able to meet the financing and therefore diligent exploitation conditions within the given time frame After two years, the extended options expired. This enables the possibility of finding a new receptor for this technology. The age of the patent becomes an issue.

11 Impact Pilot project to measure impact of pTT expression system and proprietary 293 cell line developed by NRC-BRI Scientific, economic and social dimensions were measured qualitatively using surveys NRC-BRI will increase measuring the impact of its efforts in R&D