Technology Transfer AcceleratorMeeting with universities in order to kick start inputs to the project

European Investment FundBrussels, June 7th, 2004

2

TT

A-P

resU

niv-

07

Jun2

004

Agenda

Presentation of EIF

Technology Transfer in Europe

Technology Transfer Accelerator project

3

TT

A-P

resU

niv-

07

Jun2

004

European institution created in 1994 EU specialised financial instrument for SMEs acting through:

Venture capital (fund of funds), guarantees (SME loan portfolios) and Advisory (Complex Financial Structures)

SHAREHOLDERS

Subscribed capital of EUR 2 billion : - 59.6% European Investment Bank - 30%: European Commission - 10.4%: 31 financial institutions - Rating: AAA/Aaa/AAA (S&P/Moody’s/Fitch)

OBJECTIVES

« Pursue Community objectives » such as growth, employment, research and development, innovation, and regional development…« Generate an appropriate return »Operating uniquely through financial intermediaries (about 190 funds, 130 guarantee transactions) on a commercial basisAcross 25 EU Member States + 3 (Candidate) + 3 EFTA countries

Presentation of EIF

4

TT

A-P

resU

niv-

07

Jun2

004

130 intermediaries which have supported 200 000 SMEs

6.45 billion

(2251 million in 2003)GUARANTEES

190 intermediaries which have invested in 1 800 SMEs

2.50 billion

(135 million in 2003)

VENTURE

CAPITAL

Number of intermediariesTotal portfolio in EUR

EIF portfolio

Situation at 31.12.2003

5

TT

A-P

resU

niv-

07

Jun2

004

Facilité ERP EUR 250m

Venture Capital (EUR 2.48bn)

SME Guarantees (EUR 6.35bn)

Additional until 2008+

ERP FACILITY

EUR 4.5bn

EIF mandates and resources: € 8.8 billion at end-2003

Situation at 31.12.2003

EUR 2.2bn

EUR 2.0bn

6

TT

A-P

resU

niv-

07

Jun2

004

• Leading EU VC early-stage/high-tech player. EIF accounts for around 15% of early-stage market

• Key EU provider of SME guarantees (loans, credit enhancement). Reached over 250 000 SMEs

• Key micro-credit guarantor (EUR 180m)

• Luxembourg, 70 staff

EIF a leading player in the European SME finance market

7

TT

A-P

resU

niv-

07

Jun2

004

Agenda

Presentation of EIF

Technology Transfer in Europe

Technology Transfer Accelerator project

8

TT

A-P

resU

niv-

07

Jun2

004

Technology Transfer critical link between a bright invention and a business

• Tech. Transfer office

• Tech. Transfer office

• Incubator

• Business Angels

• Founders

• Friends / family / fools

• Venture Capital • IPO

• Trade sale

R&D / patent

Proof-of-Concept / Prototype

Seed capitalSeries A

Series B

Series C

Start-upGrowth

companySpin-off

Licensing

9

TT

A-P

resU

niv-

07

Jun2

004

Europe falling behind in research

• EU-US R&D Gap: € 130 bn every year & growing

– Public funding gap € 25 bn

– Business funding gap € 105 bn

• US has early-mover advantage in many technologies

– US built favourable environment over the years

– US reaches scale faster, crowding out smaller players

• US has advantage of large homogeneous market

– E.g. federal / state funding 90 / 10 in US; EU / national funding 10 / 90 in Europe

• US is an attraction pole

– “Brain drain”

– E.g. decision by Novartis to move research operations to Boston

– E.g. GlaxoSmithKline relocated research HQ to Philadelphia

10

TT

A-P

resU

niv-

07

Jun2

004

(i) VC community typically does not address seed stage

– Too small / too risky / too complex

(ii) Current European technology transfer mechanisms are insufficiently developed

– Lessons to be learnt from multitude of initiatives

(iii) EU clusters do not talk to one another

– They often relate better to US clusters (Owen/Pammolli study)

(iv) Non-European operators best at poaching European ideas

Multiple issues in Tech Transfer in Europe

11

TT

A-P

resU

niv-

07

Jun2

004

EU clusters do not talk to one another

Biotechnology clusters: relationships between main clusters

12

TT

A-P

resU

niv-

07

Jun2

004

Agenda

Presentation of EIF

R&D in Europe

Technology Transfer Accelerator project

13

TT

A-P

resU

niv-

07

Jun2

004

• While European research is world class, it is not commercialised to its full potential

– In particular lagging behind US

• This does not necessarily mean that solution lies in mimicking US

– A model that works in Europe must be developed 

TTA based on simple ideas

Premises: the TTA would:

• Operate commercially and independently on European basis

• Target advanced and emerging technology sectors

• Find, develop and optimise European ideas from research and academic institutions, for sale primarily to the venture capital and corporate community

14

TT

A-P

resU

niv-

07

Jun2

004

Possible concept for a TTA in Life Sciences

TTALife Sciences

Investors

Private funding(financial / strategic /

VC investors)

Public funding (PPP, EIF)

Cancer projects

Tissue reg.projects

Vaccine projects

… ……

University A

Tech transfer operator B

Research foundation C

Research Center D

…

IPR / royalty agreements

• € 50 – 100 million funding• European outlook• Skill mix: tech / IP / mgt / VC• “Long enough” duration

(15 – 20 years?)

Sale to VC / Corporate

…

Tech Transfer Acceleration

15

TT

A-P

resU

niv-

07

Jun2

004

TTA Project Planning

Benchmarking

Mapping of IPR systems

Identification ofparticipating centers

Legal and tax structure

Managing team

EIB involvement

Key milestones

Financing

1 2 3 4 5 6 7 8 9

Analysis ofexisting situation

Legal & taxstructure of TTA

Outline ofstructured

vehicle

Months

Jun Jul/Aug Sep Oct Nov Dec Jan Feb Mar Apr

2004 2005

16

TT

A-P

resU

niv-

07

Jun2

004

• Not a definitive answer or a recipe but one attempt to optimize investment in R&D/innovation

• We have much to learn: iterative process

• Objective: build a pilot to prove concept

• Ideas and discussion welcome, thank you for listening!

Conclusion

17

TT

A-P

resU

niv-

07

Jun2

004

EU clusters do not talk to one another (2)

ARCH Arch Dev. Corp., Univ. of Chicago (IL)BETH Beth Israel Hospital (MA)BETM Beth Israel Medical Center (MA)BW Brigham and Women’s Hospital (MA)CEDS Cedars-Sinai Medical Center (CA)CH Children’s Hospital Medical Center (MA)CNRS Centre Nat. de la Recherche Sc. (France)COL Columbia University (NY)COMM Commonwealth Sc. And Ind. Res. Org. (Australia)CORN Cornell Research Foundation (NY) CSH Cold Spring Harbour Lab. (NY) DF Dana-Farber Cancer Institute (MA) DK German Cancer Institute (Germany) DUKE Duke University (NC) EMORY Emory University (GA)FH Fred Hutchinson Cancer Res. Center (WA) FLU University of Florida (FL) GSU Georgia State University (GA)HARV Harvard University (MA)IC Imperial Cancer Research Fund (UK) IL University of Illinois (IL) INSERM Institut National de la Santé et de la Rech. Médicale (France) IOWA University of Iowa (IA)IP Institut Pasteur (France) JH Johns Hopkins University (MD) LUDC Ludwig Inst. For Cancer Res. (Switzerland) MEL University of Melbourne (Australia) MGH Massachusetts General Hospital (MA) MICH University of Michigan (MI)

MINN University of Minnesota (MN) MIT Massachusetts Institute of Tech. (MA)MP Max Planck Institut (Germany) MRC Medical Research Council (UK) MSIN Mount Sinai Hospital (Canada) NCU University of North Carolina (NC) NIH National Institutes of Health (MD) NYU New York University (NY) OREG University of Oregon (OR)PENN University of Pennsylvania (PA) PITT University of Pittsburgh (PA) PUR Purdue University (IN) SCR Scripps Research Institute (CA) SFLU University of South Florida (FL) SK Sloan Kettering (NY) STAN Stanford University (CA) TEMPLE Temple University (PA) TEX University of Texas System (TX)TJEFF Thomas Jefferson University (PA) TUL Tulane University (LA) UAB University of Alabama (AL) UC University of California System (CA)UTAH University of Utah (UT) UWA University of Washington (WA) WA Washington University (MO)WAU Wisconsin Alumni Research Found. (WI) WI Wistar Institute (PA) YU Yale University (CT)