Stem cell technology transfer strategy could create new model for successful commercialization of university research

Executives at the Stem Cell Network (SCN) are developing a unique commercialization strategy that could have far reaching consequences for areas of research in which Canada has the potential to gain global advantage. Planning is underway to launch a company based on a massive intellectual property (IP) portfolio of Canadian stem cell research that bundles 158 patent families from universities and research hospitals across the country.

SCN executives hope to capitalize on Canada’s leadership position in stem cell research with a technology transfer model that would provide an ownership stake for principal investigators and universities that own the IP. Canada is widely recognized as a world leader in stem cell research, with the second largest number of citations after the US and the greatest number of citations per paper. That status could be further enhanced by restrictive policies for stem cell research imposed south of the border by the Bush administration.

The aim of SCN — a four-year-old Network of Centres of Excellence (NCE) — is to establish Canada on the ground floor of an important emerging area of research and improve the likelihood that the social and economic benefits of that research are retained in Canada. The short term goal is a financable business plan by spring/05.

“This is ground breaking. The elements are not new but the way we’ve pulled it together is novel and it’s novel globally. We don’t know of another country that’s doing this,” says Drew Lyall, SCN’s executive director. “What we’re really trying to do is create another start-up that’s got more chance of success than your traditional start-up by giving it critical mass out of the gate, both in terms of IP and management and finance.”

Lyall says the model, if successful, could serve as a template for other areas of science, including other research areas within the NCE program. But he cautions that it holds potential only in areas in which there is a confluence of several sets of circumstances, such as stem cell research.

“The research has to be globally competitive, involving a small enough group of people who know and trust each other and want to work together. There can’t be an established industry, otherwise you’d be competing against them,” he says. “It probably means you’re sufficiently far away from market that there aren’t any global players to compete against.”

Proponents of the prospective company — currently referred to as Stem Cell Co — are considering a model that would see several divisions established around groupings of bundled IP and aimed at potential products that could be a new drug, research tool or transplantation therapy. Lyall and James Price, SCN’s director of partnerships & corporate development, are heading the drive to establish Stem Cell Co, which has been in the planning stage for the last 18 months. To date, $500,000 in cash and in-kind have been expended on the project and an additional $3-4 million is being sought to enhance the viability of private financing.

Crucial initial meetings with technology transfer offices across the country were facilitated and assisted by Dr James Murray. Murray is senior advisor to WestLink Innovation Network Ltd, a Western Canadian-based, not-for-profit organization focused on collaboration, training, technology bundling and commercialization transfer in Canada. He is often referred to as the grandfather of university technology transfer, having established the Univ of British Columbia’s (UBC) industry liaison office and built a powerhouse technology transfer operation at the Univ of Alberta.

Murray was instrumental in working through key IP issues and getting buy-in that the SCN strategy was worth pursuing. More recently, Dr Graham Strachan, former president/CEO of Allelix Biopharmaceuticals Inc, has been engaged to start on the massive task of IP due diligence and business plan development. Strachan is tasked with taking an inventory of the stem cell IP and bundling it into the nodes or divisions that comprise the core of Stem Cell Co.

Assistance to the SCN is also being provided by expatriate Canadian Dr Helen Becker, head of tech transfer at the Institut Pasteur in Paris.

“Our role as a Network is to assist the universities and hospitals to generate social and economic benefits. We’re not in the business of competing with the technology transfer offices, We’re a resource to them. We’re working with them to build a commercialization strategy,” says Lyall. “How do you provide a vehicle to pool the IP (of the researchers) and yet give them a mechanism to get back some disproportionate reward if it’s their IP that’s successful. That’s the key ... If you can’t solve that one, it’s always going to be a non-starter.”

A recent survey shows that 11 of the 19 “classic” stem cell papers produced between 1960 and 1980 were authored by Canadians. In fact, two pioneering Canadian researchers — Dr Ernest McCulloch and Dr James Till — were responsible for the discovery of stem cells in the early 1960s while working at the Ontario Cancer Institute in Toronto.

TECHNOLOGY TRANSFER WORKING GROUP

Most of the stem cell researchers that generated the IP have endorsed the concept and their technology transfer offices have agreed to help undertake the massive task of protecting the IP and adding value. SCN officials are working closely with a working group of eight representatives from universities, hospital and tech transfer offices to deal with the myriad IP issues with the aim of standardizing the boiler plate for IP transfers to the new company, and determining which need to be dealt with on a case-by-case basis. The working group is led by Dr Angus Livingstone, managing director of UBC’s university-industry liaison office.

WestLink’s Murray says the decision to involve the relevant university tech transfer offices is an essential element of Stem Cell Co’s viability.

“The key was to get the tech transfer offices on board and be part of the process,” says Murray. “It’s a collaborative kind of approach and it went over very well.”

The complexity and sheer number of patents involved is a major reason for the high estimated start-up costs. SCN hopes to be able to tap into the university commercialization pilot program announced in the last federal Budget (R$, April 6/04). It is also seeking funds from federal departments with practical and policy reasons for supporting the efforts of SCN. Many are mindful that the government is working on a comprehensive commercialization strategy and the environment for powerful new commercialization models is more receptive than it has been in years.

WIDE RANGING SUPPORT

In order to keep the S&T community apprised of developments, Lyall and Price have established contact with individuals in several key organizations, including the Canadian Institutes of Health Research (Dr David Brenner), the National Research Council (Dr Richard Isnor), the Natural Sciences and Engineering Research Council (Janet Walden), the Social Sciences and Humanities Research Council (Janet Halliwell) and Genome Canada (Marc Lepage).

Informal support is also being offered by the likes of Dr Calvin Stiller, chair of the Canadian Medical Discoveries Fund, Dr Heather Monroe-Blum, president of McGill Univ and Dr Martha Piper, president of the Univ of British Columbia. Organizations that have endorsed the concept include the Association of Universities and Colleges of Canada and the Association of Canadian Academic Healthcare Organizations.

DELAYS COULD BE COSTLY

Lyall says he has also sought feedback from people within the investment community and the response has been encouraging although noncommittal. Murray goes further and asserts that, of the many venture capitalists he’s spoken to in Canada and the US, the response has been enthusiastic. But he cautions that StemCell Co needs to be launched quickly and focus on near-term commercial products to ensure its long-term viability.

“It has to be set up to produce short-term successes in order to get the private sector to the table,” he says. “This will come from the divisions where there are research tools and biological materials — things we can start to sell in the short-term. It’s very important that the company generates cash flow.”

Speed is also critical to sustain the enthusiasm the universities and their stem cell researchers currently have for the project.

“This is really a pilot and if it’s successful it could lead to more commercialization and add value to publicly funded research in Canada,” he says. “I hope we won’t have to wait for too long (to obtain additional funding). If we move too slowly, the principal investigators will lose interest.”

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