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Open Innovation workshop slides from OI Pharma Partners
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pharma partnersopen innovation in bioscience
OPEN INNOVATION – a primer
An interactive workshop bringing insights from the life science and IT sectors
Jackie Hunter, Elisabeth Goodman, Michael Barnes - OI Pharma Partners
Granta Park, Cambridge, 11 Nov 2011 (#OICambs11Nov)
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pharma partnersopen innovation in bioscience
Goals for today
1. Dispel some of the hype that surrounds open innovation
2. Explore key themes – Take a practical approach – Mix of presentations, break-out exercises, case
studies and discussion
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pharma partnersopen innovation in bioscience
A little background on OI Pharma Partners
• Founded in 2010 by Dr Jackie Hunter • Focus on adding value to Healthcare industries by
realising the power of Open Innovation – Working with life science and healthcare companies on OI
strategy and implementation – Developing OI in Healthcare strategy with EU Cyprus presidency – Member of OI consortia
• What we offer*: – Strategy – diagnosis, and development – Implementation – accessing networks / partners, best practices
in collaborative project management – Intermediary – IP brokering, novel ideas / technologies Combined with scientific expertise..
*see flyer for more details 3
pharma partnersopen innovation in bioscience
Topics for today (broad timings)
09:30 – 09:45 Introduction (Louise Rushworth, Elisabeth Goodman)
09:45 – 10:15 What is meant by Open Innovation (Mike Barnes)
10:15 – 10:45 What Open Innovation can mean for you (Jackie Hunter)
10:45 – 11:30 How OI differs between large and small organisations, providers and consumers: barriers & enablers (Jackie Hunter)
11:30 – 12:00 The ideal OI Ecosystem (Mike Barnes)
12:00 – 13:00 Discussions over lunch: What participants might do as next steps within / outside their organisations to implement OI as a strategy to create more value
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pharma partnersopen innovation in bioscience
1. What is meant by OI? What are the key principles?
(Mike) • Do we have the same understanding?
Flip chart exercise
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pharma partnersopen innovation in bioscience
“The lab is my world”
“The world is my lab”
A mindset based on trust
Dare to share future profits (or losses)
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pharma partnersopen innovation in bioscience
The Innovation Continuum
Internal R&D
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pharma partnersopen innovation in bioscience
More than one model for Open Innovation
PRE-COMPETITIVE: Open Access Model
COMPETITIVE: IP Model
OPEN INNOVATION
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pharma partnersopen innovation in bioscience
IP strategies used in Healthcare
IP Strategy Description Examples
Open Data Access Rapid release of data into public databases; sometimes with an embargo period
Human Genome; Open Access journals, Chembl, Arch2POCM
Non-exclusive License Non-exclusive, royalty-free licenses; Not commercially exploitable.
Open BioSystems; Biomarkers Consortium
Creative Commons License
licenses that enable researchers to keep their copyright but allow others to copy and distribute the work provided that credit is assigned in accordance with specified pre-conditions.
International Molecular Exchange Consortium
Biological Open Source License
Right of use on conditions encouraging cooperation and further development, instead of royalties or other conditions that discourage creation of products. BiOS
Patent Pool
Researchers from various organizations controlling critical patents agree to the formation of a patent pool. Knockout Mouse Project
Geographic-based License Geographic-based restrictions with respect to patenting and licensing. MalariaGEN
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pharma partnersopen innovation in bioscience
Understanding the continuum between open access and OI
OPEN ACCESS
OPEN INNOVATION
Burden of support On IP holder
Transactional collaboration: Give to Receive
Controlled by IP holder
Fair pricing model
Organisation led
Community driven
OS entities have legs !
Free
Burden of support on Community (=no support?)
Off-limits in some IT organisations
Success dependent on Open collaboration and sharing
Altruistic?
Potentially chaotic
Agreed standards essential Quality
essential
Community needs A shared goal
Lead needs Clear vision
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pharma partnersopen innovation in bioscience
A Note on IP Management • The greatest open innovation success stories
are non-exclusively licensed – ARM holdings (Open Innovation)
• 98% of mobile phones use at least one ARM processor
– Android smartphone OS (Open source) • Jan 2011 – 300,000 Android handsets activated daily
• OI is about proactive IP management – Strategy depends on your competitive viewpoint
• Create and control strategic know-how and IP • Make available non-strategic know-how and IP
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pharma partnersopen innovation in bioscience
2. What Open Innovation can mean for you (Jackie)
• Case studies– 10 mins • Personal reflection – 10 mins • Feedback and discussion – 10 mins
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pharma partnersopen innovation in bioscience
Open innovation can have measurable impact
Procter & Gamble –
Connect + Develop
“It was clear to us that our invent-it-ourselves model was not capable of sustaining high levels of top-line growth” – P&G CEO AG Lafley • 50% of initiatives in product
development have key elements discovered or developed externally
• R&D productivity increased 60% • Innovation success rate doubled
BT – Open Innovation Principles
“[We will] use external sources to multiply our own innovation efforts, deliver growth, reduce costs and get to market faster” – BT’s ambition statement • 17 people are actively licensing
BT technology to external companies, promoted on BT.com
• 5-10 technology scouts claim to have contributed £500 million to BT business plans through innovative products and services since 2002
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pharma partnersopen innovation in bioscience
Open Innovation can happen anywhere along the value chain
Mix
Problem solving
Problem solving
Internal
External
‘Beta testing’ and getting feedback
‘Beta testing’ and getting feedback
Spin-Offs / Licensing
Corporate investment fund
Intrapreneurship program
Partnership program with start-ups and entrepreneurs
external ecosystem: start-ups, universities, customers, suppliers…
Crowd sourcing/ idea generation
Crowd sourcing/ idea generation
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pharma partnersopen innovation in bioscience
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Android: an open innovation success In the Red
Corner ANDROID: Open Source Open Innovation
In the Blue Corner
iPHONE: Closed Innovation
pharma partnersopen innovation in bioscience
iPhone V Android : Share of Smartphone Internet Usage (Apr 08 - Feb 10)
JAN 2011 – 300,000 Android handsets activated daily 16
pharma partnersopen innovation in bioscience
Lego reinvents itself
Mindstorms Architecture Bricks and paper Cuusoo
1. p lace: Shinkai 2. p lace: Piano 3. p lace: Pop-band
Votes: 1182 Votes: 342 Votes: 178
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pharma partnersopen innovation in bioscience
Philips Innovation and business ecosystem: High Tech Campus
Research institutes
Universities
Network organizations
Venture funds
Technical services
Business support
Corporate innovators
Start-up companies
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pharma partnersopen innovation in bioscience
Philips seen as a leader in OI • Best practice in Inside–Out OI
– in making IP work harder for Philips & others – in incubation, venturing, attracting investment – in creating High Tech Campus Eindhoven, NL
• Extensive network of academic and clinical research relationships • Long-lasting engagement in public/private partnerships • Promising examples of Outside-In OI
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pharma partnersopen innovation in bioscience
Unilever’s open innovation University/ Contract Research
Supplier Networks
JV’s Alliances
Science Parks
Entrepreneurs
Scouting Networks
Unilever Corporate Ventures
NGO’s
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pharma partnersopen innovation in bioscience
DSM is another OI advocate
• Interesting business option recognised by DSM
• Not fit within internal business strategy
• Founded in 2008 with DSM IP and external funding
• Reduced risk by available know-how and people
• Fast market introduction • Delivering colour and flavouring to
food and beverage customers
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pharma partnersopen innovation in bioscience
GSK Consumer Health • Embraces OI across the pipeline • See growth arising from a number
of areas: – Ingredients – Products – Packs – Processes – Claims – Routes to market – Regulatory compliance
• Publicising what they need and want • Maclaren Alliance
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pharma partnersopen innovation in bioscience
GSK Consumer: ENIGMA launch event (Sept 2007)
ENIGMA: External networking and innovation groups for market advantage 75 external organisations
– Ingredient & packaging suppliers – Research associations & institutes – Development organisations – Process equipment manufacturers – Environmental companies – Academic institutions – Consultants & inventors – Competitors & industry representatives
Q & A session, networking, mingling, conversations
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pharma partnersopen innovation in bioscience
ENIGMA Think Tank 2009
• 2 key technical challenges identified by brand/R&D teams • Brought together scientific experts to creatively explore
issues • 24 organisations attended – academia & industry contacts • Plus innovation experts from OUTSIDE food & drink • 6 GSK facilitators from R&D, Marketing & Procurement • Brainstorming type activities to stimulate creative
thinking • Several potential areas identified for further
investigation
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pharma partnersopen innovation in bioscience
Questions for reflection
– How could OI be relevant to my business?
– What are the barriers?
– What are the potential next steps for implementing OI?
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pharma partnersopen innovation in bioscience
3. Different perspectives on OI (Jackie)
• How OI differs between large and small companies
• OI from the perspectives of both the innovation provider and consumer
• Barriers and enablers
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pharma partnersopen innovation in bioscience
Large vs small
Large company • People - more
conservative; less risk taking
• Medium time horizons • Decision making by
committee • Financially secure • Portfolio of projects
and collaborations • Standard process for
partnering
Small company • Entrepreneurial, risk
takers
• Short term • Rapid decision making
• Financial urgency • Focus on single
projects • Flexible processes
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pharma partnersopen innovation in bioscience
Large vs small
Large company • Usually lot of support
eg IP, legal, alliance management
• Lot of experience in partnering
• Range of capabilities in house
• Broad range of IP
Small company • Little or no support
internally for collaborations
• Limited experience in partnering
• Limited capabilities in house
• Limited IP
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pharma partnersopen innovation in bioscience
Need to recognise different perspectives
• Balance between separate and shared interests
• Maximise outcome and value creation for each party whilst minimising risk 29
pharma partnersopen innovation in bioscience
Collaboration Exercise
One half of room • Work in pairs
– First half of session pair member 1 is large corporate partner and member 2 is academic/SME
– Reverse roles for second half
– Present what you offer, how is it perceived, what are the expectations and barriers for each party
• Plenary discussion on lessons learned
Other half of room • Work in pairs
– First half of session pair member 1 is innovation provider and member 2 is consumer
– Reverse roles for second half
– Present what you offer, how is it perceived, what are the expectations and barriers for each party
• Plenary discussion on lessons learned
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pharma partnersopen innovation in bioscience
4. The Ideal OI Ecosystem (Mike)
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pharma partnersopen innovation in bioscience
The Selfish Scientist
“A biologist would rather share their toothbrush than their (gene) names”
Michael Ashburner Professor Genetics
University of Cambridge UK
Why should scientists cooperate?
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pharma partnersopen innovation in bioscience
The Prisoner’s Dilemma
Each prisoners’ best strategy regardless of the others’ is dominant.
The dominant strategy is to defect Prisoners could do better by both staying silent
but once collusion sets in, each prisoner has an incentive to cheat!
The logical strategy is not always best
Prisoner B
Silent (Cooperate) Confess (Defect)
Prisoner A
Silent (Cooperate) Each get 1 years A gets 15 yrs B goes free
Confess (Defect) A goes free B gets 15 yrs
Each get 3 years
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pharma partnersopen innovation in bioscience
THE R&D Game: A Dominant Strategy • The Nappy Industry Oligopoly
– A perfect fit for the prisoners dilemma
Proctor & Gamble Kimberley-Clark
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pharma partnersopen innovation in bioscience
THE R&D Game: A Dominant Strategy Dominant strategy for both firms is to undertake the R&D. If one defects the other will lose market share But both firms spending on R&D may yield a lower total return than if both firms resist the temptation Factors other than profits are also important
Proctor & Gamble
R&D investment No R&D Investment
Kimberly-Clark
R&D Investment (+$5m, +$45m) (+$85m, -$10m)
No R&D Investment
(-$10m, +£85m)) (+$30m, +$70m) What about Open Access R&D?
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pharma partnersopen innovation in bioscience
Reaching Equilibrium: Open Access R&D
Closed R&D
Open Access R&D
Altruism, etc
High Predicted Revenues
Low hanging fruit
Strong R&D budgets
That Was Then..... 36
pharma partnersopen innovation in bioscience
Reaching Equilibrium: Open Access R&D
Closed R&D
Open Access R&D
Perceived Risk
Payer pressure
Lack of disease Understanding
Uncertain revenues
Weak R&D Budgets
Is this now?....
Cultural Change
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pharma partnersopen innovation in bioscience
An Open Innovation Ecosystem
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pharma partnersopen innovation in bioscience
Players in the OI Ecosystem Tertiary Innovator • Innovation super-consumer • Industry and large SME • Multidisciplinary • Highly networked • Tech-transfer and In-licensing • May seek exclusivity • Change agent • Outlicensing
Secondary Innovator • Translational powerhouse • Industry, SME • May be resistant to change • Domain expert • Good network • Makes tech transfer work • Publicises needs (Crowdsourcing) • Partner with 1° Innovator
Primary Innovator • Innovation powerhouse • Academia, SME • Specialist • Close partnership with 2° innovator • Avoid exclusive licensing • Needs good understanding of business reqs. of 2° & 3° Innovators
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pharma partnersopen innovation in bioscience
An Open Innovation Ecosystem
Many Partners Open Sharing
Open Access
Open Innovation (Under CDA,
shared IP etc)
Closed Innovation
Open Standards
Public Domain Data Generation
Single/Few Partner Relationships
Exclusively Internal IP & Knowledge
Proprietary research is key: but needs
to be highly strategic
These are the foundation but require
cultural change
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pharma partnersopen innovation in bioscience
Discussion over lunch (Mike)
• What might you do as next steps within / outside your organisations to implement OI as a strategy to create more value
• Slides from today available on our website
http://www.oipharmapartners.com [email protected] Tel. +44 (0) 7879 694 253
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