TTO CIRCLE SATT - The new French model for TTO

N. Carboni, President SATT Conectus Alsace

C. Esteve, President SATT IdF Innov

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

• 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 approach

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

68

78

1200

Dotations en Millions €

70

Ile de France

36

60

45 78

Existing SATTs

SATTs to come

70 60

60

45

63

Lutech 78 SATT Sud-Est 78 Ouest Valorisation 70 Toulouse Tech Transfer 70 IDF - Innov 68 Nord de France 63 Aquitaine 48 Languedoc Roussillon 45 Conectus Alsace 36 Grand Est 60 Grand Centre 60

12 SATTs at a glance

63

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

Impact socio-économique

Niv

eau

de ri

sque

Bubble size: DCF

2 752 K€ investment on 14 POC projects

AIR-CPG 194 k€

PNDS 172 k€ CLD

141 k€

Dosimed 185 k€

Riboviz 162 k€ Synaggreg

102 k€

S100b 250 k€

RP-Cilia 185 k€

MannoVirocide 344 k€

NGS-QC 150 k€

TransPep 304 k€

start-up

Nanograft 219 k€ POLARIS

116 k€

DiCD 178 k€

POC Investment projects: an illustration for IdF Innov

Nef AIDS Kit GVH Ostéogénèse 3D modelization

Health Health Health

TIC

POC POC + kit

POC + startup Proto + startup

18 mois 18 mois 12 mois

9-12 mois

~200 k€ ~200 k€ ~200 k€ ~120 k€

Sector What? Lenght Investment Projects

Vaccine AIDS Télomérase/cancer Alzheimer Breast HER2

Health Health Health Health

POC POC + hits

POC POC + hits

24 mois 18 mois 16 mois 23 mois

~220 k€ ~160 k€ ~200 k€ ~240 k€

1er CI (dec 2012)

2ème CI (fev 2013)

Cellular Therapy Crohn

Crème antalgique Murine model

Health Health Health Health

POC POC POC

Dev. modèle

24 mois 23 mois 13 mois 15 mois

~230 k€ ~240 k€ ~170 k€ ~80 k€

3ème CI (juin 2013)

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

Thank you!

Role & position of the European level? Ideas on these challenges?