Open Innovation primer - OI pharma partners workshop


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Open Innovation primer - OI pharma partners workshop

  1. 1. OPEN INNOVATION – a primer An interactive workshop bringing insights from the life science and IT sectorsJackie Hunter, Elisabeth Goodman, Michael Barnes - OI Pharma Partners Granta Park, Cambridge, 11 Nov 2011 (#OICambs11Nov) pharma partners 1 open innovation in bioscience
  2. 2. Goals for today1. Dispel some of the hype that surrounds open innovation2. Explore key themes – Take a practical approach – Mix of presentations, break-out exercises, case studies and discussion pharma partners 2 open innovation in bioscience
  3. 3. 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.. pharma partners *see flyer for more details 3 open innovation in bioscience
  4. 4. 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 pharma partners 4 open innovation in bioscience
  5. 5. 1. What is meant by OI? What are the key principles? (Mike)• Do we have the same understanding? Flip chart exercise pharma partners 5 open innovation in bioscience
  6. 6. “The lab is my world”“The world is my lab”A mindset based on trustDare to share future profits (orlosses) pharma partners 6 open innovation in bioscience
  7. 7. The Innovation ContinuumInternal R&D pharma partners 7 open innovation in bioscience
  8. 8. More than one model for Open Innovation OPEN INNOVATION COMPETITIVE: IP Model PRE-COMPETITIVE: Open Access Model pharma partners 8 open innovation in bioscience
  9. 9. IP strategies used in HealthcareIP Strategy Description Examples Rapid release of data into public databases; Human Genome; Open AccessOpen Data Access sometimes with an embargo period journals, Chembl, Arch2POCM Non-exclusive, royalty-free licenses; Not Open BioSystems; BiomarkersNon-exclusive License commercially exploitable. Consortium 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 International MolecularCreative Commons License specified pre-conditions. Exchange Consortium Right of use on conditions encouraging cooperation and further development,Biological Open Source instead of royalties or other conditionsLicense that discourage creation of products. BiOS Researchers from various organizations controlling critical patents agree to thePatent Pool formation of a patent pool. Knockout Mouse Project Geographic-based restrictions with respectGeographic-based License to patenting and licensing. MalariaGEN pharma partners 9 open innovation in bioscience
  10. 10. Understanding the continuumbetween open access and OI Community Potentially chaotic OPEN ACCESS driven Off-limits in some Burden of support OS entities on Community have legs ! IT organisations (=no support?) Community needs Free A shared goal Altruistic? Success dependent on Agreed standards Quality essential Open collaboration and sharing essential Organisation Transactional collaboration: Give to Receive led Fair pricing Lead needs Burden of support Clear vision On IP holder model Controlled byOPEN INNOVATION IP holder pharma partners 10 open innovation in bioscience
  11. 11. 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 pharma partners 11 open innovation in bioscience
  12. 12. 2. What Open Innovation can mean for you (Jackie)• Case studies– 10 mins• Personal reflection – 10 mins• Feedback and discussion – 10 mins pharma partners 12 open innovation in bioscience
  13. 13. Open innovation can have measurable impact Procter & Gamble – BT – Open Innovation Principles Connect + Develop“It was clear to us that our invent- “[We will] use external sources toit-ourselves model was not capable multiply our own innovation efforts,of sustaining high levels of top-line deliver growth, reduce costs and getgrowth” – P&G CEO AG Lafley to market faster” – BT’s ambition statement • 17 people are actively licensing • 50% of initiatives in product BT technology to external development have key elements companies, promoted on discovered or developed • 5-10 technology scouts claim to externally have contributed £500 million to • R&D productivity increased 60% BT business plans through • Innovation success rate doubled innovative products and services since 2002 pharma partners 13 open innovation in bioscience
  14. 14. Open Innovation can happen anywhere along the value chain external ecosystem: start-ups, universities, customers, suppliers… ‘Beta testing’ and Crowd Partnership CorporateExternal Problem getting sourcing/ program with investment solving feedback idea start-ups and fund generation entrepreneurs Mix ‘BetaInternal testing’ Crowd Intrapreneurship Spin-Offs / Problem and getting sourcing/ program Licensing solving feedback idea generation pharma partners 14 open innovation in bioscience
  15. 15. Android: an open innovationIn the Red success In the Blue CornerCorner iPHONE:ANDROID: Closed InnovationOpen SourceOpen Innovation 15 pharma partners open innovation in bioscience
  16. 16. iPhone V Android :Share of Smartphone Internet Usage (Apr 08 - Feb 10) JAN 2011 – 300,000 Android handsets activated daily pharma partners 16 open innovation in bioscience
  17. 17. Lego reinvents itselfMindstormsArchitectureBricks and paperCuusoo 1 p lac e: Shinkai . 2. p lac e: Piano 3. p lac e: Pop -b and Votes: 1182 Votes: 342 Votes: 178 pharma partners 17 open innovation in bioscience
  18. 18. Philips Innovation and businessecosystem: High Tech Campus Corporate innovators Research institutes Start-up companies Universities Technical services Network organizations Business support Venture funds pharma partners 18 open innovation in bioscience
  19. 19. 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 pharma partners 19 open innovation in bioscience
  20. 20. Unilever’s open innovationSupplier University/ JV’s Science Parks Scouting Unilever NGO’sNetworks Contract Alliances Networks Corporate Research Ventures Entrepreneurs pharma partners 20 open innovation in bioscience
  21. 21. 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 pharma partners 21 open innovation in bioscience
  22. 22. 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 pharma partners 22 open innovation in bioscience
  23. 23. GSK Consumer: ENIGMA launch event (Sept 2007)ENIGMA: External networking and innovation groupsfor market advantage 75 external organisations – Ingredient & packaging suppliers – Research associations & institutes – Development organisations – Process equipment manufacturers – Environmental companies – Academic institutions – Consultants & inventors – Competitors & industry representativesQ & A session, networking, mingling, conversations pharma partners 23 open innovation in bioscience
  24. 24. 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 pharma partners 24 open innovation in bioscience
  25. 25. Questions for reflection– How could OI be relevant to my business?– What are the barriers?– What are the potential next steps for implementing OI? pharma partners 25 open innovation in bioscience
  26. 26. 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 pharma partners 26 open innovation in bioscience
  27. 27. Large vs smallLarge company Small company• People - more • Entrepreneurial, risk conservative; less risk takers taking• Medium time horizons • Short term• Decision making by • Rapid decision making committee• Financially secure • Financial urgency• Portfolio of projects • Focus on single and collaborations projects• Standard process for • Flexible processes partnering pharma partners 27 open innovation in bioscience
  28. 28. Large vs smallLarge company Small company• Usually lot of support • Little or no support eg IP, legal, alliance internally for management collaborations• Lot of experience in • Limited experience in partnering partnering• Range of capabilities • Limited capabilities in in house house• Broad range of IP • Limited IP pharma partners 28 open innovation in bioscience
  29. 29. Need to recognise different perspectives• Balance between separate and shared interests• Maximise outcome and value creation for each party whilst minimising risk pharma partners 29 open innovation in bioscience
  30. 30. Collaboration ExerciseOne half of room Other half of room• Work in pairs • Work in pairs – First half of session pair – First half of session pair member 1 is large member 1 is innovation corporate partner and provider and member 2 is member 2 is consumer academic/SME – Reverse roles for second – Reverse roles for second half half – Present what you offer, – Present what you offer, how is it perceived, what how is it perceived, what are the expectations and are the expectations and barriers for each party barriers for each party• Plenary discussion on • Plenary discussion on lessons learned lessons learned pharma partners 30 open innovation in bioscience
  31. 31. 4. The Ideal OI Ecosystem (Mike) pharma partners 31 open innovation in bioscience
  32. 32. The Selfish Scientist“A biologist would rather share theirtoothbrush than their (gene) names” Michael Ashburner Professor Genetics University of Cambridge UK Why should scientists cooperate? pharma partners 32 open innovation in bioscience
  33. 33. The Prisoner’s Dilemma Eachprisoners’ best strategy regardless of the others’ is dominant.  The dominant strategy is to defect Prisoner B Prisoners could do better by both staying silent Silent (Cooperate) Confess (Defect)  but once collusion sets in, each prisoner has an incentive to cheat! The logical strategy is not always best Silent (Cooperate) Each get 1 years A gets 15 yrs B goes freePrisoner A Confess (Defect) A goes free Each get 3 years B gets 15 yrs pharma partners 33 open innovation in bioscience
  34. 34. THE R&D Game: A Dominant Strategy• The Nappy Industry Oligopoly – A perfect fit for the prisoners dilemma Proctor & Gamble Kimberley-Clark v pharma partners 34 open innovation in bioscience
  35. 35. THE R&D Game: A Dominant StrategyDominant strategy for both firms isto undertake the R&D. If one defectsthe other will lose market share Proctor & GambleBut both firms spending on R&D mayyield a lower total return than if both R&D investment No R&Dfirms resist the temptation InvestmentFactors other than profits are alsoimportant R&D Investment (+$5m, +$45m) (+$85m, -$10m) Kimberly- Clark No R&D (-$10m, +£85m)) (+$30m, +$70m) Investment What about Open Access R&D? pharma partners 35 open innovation in bioscience
  36. 36. Reaching Equilibrium: Open Access R&DClosed Open Access R&D R&D Strong R&D Altruism, etc budgets Low hanging fruitHigh Predicted Revenues That Was Then..... pharma partners 36 open innovation in bioscience
  37. 37. Reaching Equilibrium: Open Access R&DClosed Open Access R&D R&D Cultural Change Lack of disease Weak R&D Understanding Budgets Uncertain Payer pressure revenues Perceived Risk Is this now?.... pharma partners 37 open innovation in bioscience
  38. 38. An Open Innovation Ecosystem pharma partners 38 open innovation in bioscience
  39. 39. Players in the OI Ecosystem Tertiary Innovator • Innovation super-consumer • Industry and large SMESecondary Innovator • Multidisciplinary• Translational powerhouse • Highly networked• Industry, SME • Tech-transfer and In-licensing• May be resistant to change • May seek exclusivity• Domain expert • Change agent• Good network • Outlicensing• 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 pharma partners 39 open innovation in bioscience
  40. 40. An Open Innovation EcosystemExclusively Internal IP Proprietary research& Knowledge is key: but needs Closed to be highly strategicSingle/Few InnovationPartner These are theRelationships Open Innovation foundation (Under CDA, but require shared IP etc)Many culturalPartners change Open AccessOpenSharing Open Standards Public Domain Data Generation pharma partners 40 open innovation in bioscience
  41. 41. 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 Tel. +44 (0) 7879 694 253 pharma partners 41 open innovation in bioscience
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