Introduction

Early biologists found it convenient to classify all living things as either animals or plants. To many people today, this grouping still seems perfectly adequate. However, examination of the life-forms that exist on Earth shows that this classification is unsatisfactory. Although there is a superficial resemblance between green plants and the fungi, these two groups are divided by profound biological differences. Unlike green plants, fungi cannot manufacture their own food from water and carbon dioxide by the process of photosynthesis. Rather, they require a supply of organic matter from which they can derive their energy. Fungal cellular composition is dissimilar from that of green plants, and the structural polymers of their cell walls are markedly different. Fungi are therefore now accorded their own status as a third kingdom. Furthermore, for many years the classification of microscopic organisms proved to be difficult. Photosynthetic microbes behave very differently from higher plants. It was therefore proposed towards the end of the nineteenth century that microscopic life forms should be classified as a fourth kingdom. This was the kingdom Protista, proposed in 1866, at a time when the scientific study of microbiology was in its infancy. This was, however, almost 200 years after Antonie van Leeuwenhoek described ‘animalcules’ following his development of the optical microscope.

During the twentieth century there have been many advances in microscopy, including the development of the electron microscope.

Isolation of bacteria

The earliest attempts to produce solid cultures included solidifying meat extracts with gelatin. Such media had two principal disadvantages: firstly, gelatin liquefies at about 37 °C, the optimum temperature for the growth of many human pathogens; secondly, many bacteria possess the ability to digest gelatin. Consequently, gelatin-based media tend to become liquefied under conditions where it is desirable to use a solid growth medium.

Agar is an inexpensive polysaccharide, obtained from certain seaweeds. In solution it can form a gel, and it provides an excellent substitute for gelatin as a solid support for microbiological media. Agar is generally resistant to microbial degradation and once gelled it remains solid at temperatures just below 100 °C. Once molten, agar suspensions remain liquid at temperatures of about 45 °C. This permits heat-labile supplements to be added to agar-based media without loss through heat degradation. Because of these properties, agar is the gelling agent used most widely in bacteriology.

During the earliest days of bacteriology, the most successful growth media were those derived from boiled extracts of meats of various types. Even now, brain–heart infusion broth is a rich growth medium often used to culture fastidious bacteria. Early culture media were very variable in their content. This caused problems with the standardisation of growth and also of bacterial characteristics. Today, many bacteriological growth media are still based upon peptones. These consist of a complex mixture of water-soluble products obtained from the hydrolysis of proteins derived from lean meats and other sources including heart muscle, casein and soya flour.

The first step in the commercialisation of your technology is one of self audit. Deciding what your ’endpoint‘ will be is crucial to the determination of the direction in which you move and the methods you take to get there. Any commercialisation will require time and effort and in the initial stages will mostly be your own. The apparently unproductive and ephemeral activities necessary to bring your technology to market will inevitably take you away from the bench and your beloved research. It is thus easy to resent the time spent in commercial exploitation, particularly if the latter is going neither well nor quickly nor if you feel out of your depth in dealing with people of a different mind set. This would perhaps be a mistake, since great satisfaction can be derived from devolving the benefits of your research. Indeed, some would see the effective transfer of research into society as a necessary and integral part of the research process.

This book is aimed at helping researchers to understand the commercial potential of their technology. It will help to bridge the communication gap and familiarise the reader with the plethora of functions, skills and processes that commercialisation requires. It will not be a substitute for the professional advice of patent agents, solicitors, marketing executives, etc., but will go some way to helping you to understand what they require.

The biotechnology business environment

The biotechnology industry is now entering a renaissance, as the initial excesses of expectation evaporate and many start-up companies begin their journeys with more experienced management and better directed investment criteria. Hopefully this will lead to fewer mistakes in the market place. The science associated with biotechnology is burgeoning outwards at a considerable rate, and we can reasonably expect the number of licensing deals and the preponderance of startup companies to increase. The change in UK government policy to both encourage and expedite the transfer of technology from our research base will help create a positive environment for biotechnology, thus allowing these opportunities to assume their rightful place as a significant contributor to national wealth and prosperity. If this text has given you an insight into these processes, removed some of the mystique of the commercial world and helped facilitate the transfer of your technology into the market place, then it will have succeeded in its purpose.

Perhaps more so than in any other industry, research is the lifeblood of biotechnology. The basic research breakthroughs of the late 1970s and early 1980s have opened an unprecedented Pandora's box of opportunity, procedures and applications that were once in the realm of fantasy, but are now with us.

Decide what you want and know where you are going

In bringing your research to market it is crucial to know what you want, to decide where you are going and where you wish to be. That is, develop a firm, flexible, strategic plan. So what do you want? Some options are: (a) to make yourself so rich that you never have to work again; (b) to have a career change; (c) to have other related commercial interests; (d) to have a lively interest in seeing your work developed further and used for the benefit of society; or (e) to make money for your institute. No doubt there are other possibilities. Your chances of reaching your goal will be dependent on the technology and its exploitation. If you have a technology that is only suitable for licensing then you can expect a percentage of the fee (depending upon your arrangement with your institute) and/or of the royalties. The more you can segment the potential market for the technology or the more generic it is, the more likely that you will sell additional licences. Perhaps the best example of this is the Stanford licence for genetic engineering (genetic manipulation using plasmids), but this is a precedent that is unlikely to be repeated often. Licences will: (a) generate revenue; (b) be a useful publicity aid to increase the profile of your institute; and (c) will help form collaborations with industry.

Introduction

This chapter will consider the issues of developing your technology further. This will involve marketing yourself and your product to potential licensees, financiers and/or technology transfer companies should you choose to use one. It will involve looking at how to find potential licensees, how to segment the market and what information is publicly available to you. The next section will look at the options for commercialisation and how to choose between them.

Consultancy and contract research

The ‘top end’ of the technology transfer business and therefore also that of taking your research to market are the business start up and licensing deals. There are however, two other areas whereby commercial links can provide revenue and more importantly, can begin to form effective relationships. These lie in the areas of: (a) contract research, whereby industry sponsors a definite piece of work for a given period of time, using given resources and with an expectation of a defined end result; and (b) the general marketing of consultancy services. The latter involves the wide range of academic expertise in the university that can be sold to the benefit of all sectors of industry. In marketing yourself and your technology, you should not be quick to discount these avenues.

Introduction

We are living in exciting times. The pace of technological development in the 1980s and 1990s has been and will be heralded as a veritable revolution, whether this be in biotechnology, materials science, microelectronics or other ‘high’ technology fields. With this has come the need to incorporate novel information into products and services and hence, new industries have been born. This book focuses upon the biotechnology industry which, due to its fragmented nature, conveys unique characteristics that should be considered in commercial exploitation. However, it is hoped that the general principles that are described will be applicable to other fields and be of use to anyone wishing to take their technology to market. This book will be of relevance to academics at all levels, to university administrators, to entrepreneurs and to those wishing to enter the technology transfer business.

The technology gap

Molecular and cell biology is revolutionising many aspects of everyday life, allowing the coercive engineering of novel drugs, detection of genetic defects and disease states, making agricultural and industrial processes both more cost effective and friendly to the environment as well as making improvements in the quality of foodstuffs, amongst others. The US was first to realise the potential of this technology and some of the companies that arose in the early days are now familiar names, Genentech, Amgen and Cetus for example.

Where do you go from here?

In this book we have introduced the basic principles that relate to protecting your intellectual property and taking it to the market place. This has involved preparing yourself for negotiations, selecting partners and deciding upon the commercial direction to take, i.e. licensing, or directly via a start-up company. It is important that the reader realises the enormity of the tasks that face the budding entrepreneur in today's competitive environment, and both the government and the universities have a significant part to play in the evolution of these businesses. Consistent policies towards the protection of IP and the financial benefits that accrue therefrom, a more competitive attitude towards patent protection (cf. US policy) and an understanding of the criteria facing potential investors are all areas where improvements are possible. In addition, universities must realise the importance and necessity of professional project management principles in the technology transfer process. The days of the privileged minority nineteenth-century scientists beavering away in an isolated room in pursuit of their own greater glorification are long gone. The reality of twenty-first-century science is one of goal-orientated, cost-effective team based research and development. The enormity and complexity of many of the projects now facing us affords no other option if the UK is to assume a competitive position in biotechnology.

The concept of intellectual property

Before proceeding to take your technology to the market place, you should first consider its protection. There is no point spending effort and time in entering a market when competitors could easily copy your idea and sweep you aside with a better integrated or superior marketing strategy. Legal protection may not stop this, but at least you will have some form of redress and a platform from which to build. Whilst the emphasis in this book will be placed upon the biotechnology industry, it is well to remember that the rapid fluxes inherent in this industry lead to a similar rapid evolution of the intellectual property position.

Intellectual property (IP) is the driving force of any business. Businesses acquire assets in the form of buildings, labour, etc. and these have a tangible value. However, what differentiates businesses is their ability to turn these assets into greater profits. This requires ‘know how’, the techniques, experience and awareness to turn the assets to best advantage. This is in part inherent in the expertise of the staff that have been employed but is also resident in the intellectual property. This is the protectable part of the ‘know how’ and is the source of added business value. The right to use intellectual property (an intellectual property right or IPR) is responsible for the establishment of markets, for generating loyalty, for controlling the industry and above all, for generating profit.

Basic commercial issues

We will now assume that the intellectual property (IP) you have generated has been appropriately identified, protected via a patent and packaged in a saleable format. This IP must now be realized in financial terms both to yourself, your institution and to the licensee(s). This requires a systematic quantitation of the value of the IP in question, decided not in isolation, but in comparison to similar technologies and as part of a business enterprise. The word ‘Value’ is chosen carefully and should be distinguised from, for example, price and cost. The value of your IP should be considerably larger than either of these, since it also reflects the potential future benefits from the use of your technology as part of a product or service. Remember, the initial IP is usually only a small part of this product or service. In determination of the value of your IP, the next step is to consider a schedule for payment. This is often expressed as a royalty, i.e. an amount of money transferred in proportion to the contribution of the IP to the final product or service. Royalties are often expressed either as a percentage of product sales in monetary terms or of the total number of units sold.