No one right path to commercialization, experts say

Toronto biotech startup ArcticDx has spent eight years working on technology to measure an individual’s risk of developing colorectal carcinoma, but still hasn’t commercialized it. Meanwhile, by taking a slightly different approach, the same company has commercialized a test for age-related macular degeneration in about half the time.

In a panel discussion on best practices in commercializing research at the Canadian Association of Business Incubation’s (CABI) 20th annual conference in Ottawa this week, Dr. Brent Zanke explained why one project moved faster than the other.

The ArcticDx founder and chairman said colorectal carcinoma has a huge genetic component, and his company has attracted $14 million in research funding, published four papers in a prestigious genetics journal and has two patents in the late examination phase. The work looks promising, he said, but hasn’t come quite far enough for a commercially viable product.

Meanwhile around 2006 Dr. Zanke spotted research on macular degeneration, which is even more genetically predictable. He persuaded ArcticDx’s board that it was worth pursuing. In this case, rather than doing its own research, ArcticDx licenced intellectual property from multiple universities and put together a testing product that is now in use.

A key lesson, he said, is that a company doesn’t have to create its own intellectual property, but can succeed by identifying an unmet need and putting together the necessary IP.

Dr. Zanke also said relationships with universities’ technology transfer offices are more important than connections with the actual researchers, who often aren’t very interested in getting involved with commercialization.

Commercializing research is often tricky, and concerns are frequently raised about Canada’s mediocre record of doing so. Thus the CABI panel on the subject.

The Startup Garage attempts to improve Canada’s commercialization know-how by teaching students how to do it. Launched in 2010, it’s “a business plan execution competition,” explained Sean Flanigan, assistant director of technology partnerships at the University of Ottawa’s Technology Transfer and Business Enterprise.

This year, the contest will offer $20,000 to each of eight new companies to help them incorporate and get products out. The winners will be chosen by March and the aim will be to get to customers by the end of August, Flanigan said. The teams will get mentoring along the way.

The third panellist, Chris Bown, a patent agent with law firm Gowling Lafleur Henderson LLP in Ottawa, offered some warnings about intellectual property protection.

In some jurisdictions any prior disclosure can prevent obtaining a patent, he said. That may include publishing a paper or marketing materials, accepting offers to purchase or even displaying a product incorporating the innovation at a trade show. Bown advised obtaining a patent before any disclosure.

He also suggested startups keep up to date with patent filings related to their work, both to avoid conflicts with new patents and to “avoid re-inventing the wheel” by being aware of technology they might licence rather than duplicate. It’s best to deal with potential problems early, he said, and if a company spots a conflict too late to avoid it, it should keep meticulous records to ensure that if there is litigation, any settlement will be based on facts.

Bown also warned that just having a patent doesn’t ensure “freedom to operate,” or the right to sell a product that uses that patent. Often the patent is based on existing technology and that may have to be licenced, he said.

“Most companies recognize the importance of IP,” Bown said. “However, few companies understand how to manage IP.” And potential investors may well walk away from a startup “that doesn’t have a full understanding of what their IP is.”

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