The Neutrino Donut - SBIR Grants Process

COMMERCIALIZING
BIOTECHNOLOGY - MARKET
ENTRY AND PARTNERSHIPS
The Neutrino Donut, LLC
www.neutrinodonut.com
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COMMERCIALIZING
BIOTECHNOLOGY - MARKET
ENTRY AND PARTNERSHIPS
Earle Hager
Managing Partner
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• Technology Assessment
• Business Development
• Marketing
• Grant Programs
• Connector
The Neutrino Donut, LLC Copyright 2017 -2018 All Rights Reserved www.neutrinodonut.wordpress.com
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THE NEUTRINO DONUT, LLC
EXPERTISE

The basics
Creation of money and finding expertise
• This is a non-linear process
• This is a holistic process
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• Develop option on technology for evaluation
• Understand provisional versus full patent application
• PCTs
• Understand “exclusive right to negotiate”
• Understand SBIR v STTR v other funding sources
• Tech transfer offices have metrics and a focus on agreements and startups
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UNIVERSITY TECHNOLOGIES

• The Small Business Innovation Research (SBIR) program is a highly
competitive program that encourages domestic small businesses to engage
in Federal Research/Research and Development (R/R&D) that has the
potential for commercialization.
• University technology and university involvement increase your odds of being
successful (30% or greater)
• University support of grant process
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SMALL BUSINESS INNOVATION
RESEARCH (SBIR) PROGRAM

• Large companies seek startups based on university technologies and prefer
the startups over working directly with the university – it’s validation
• SBIR programs are a source of revenue, support, and development – a
grant, not a loan or VC
• SBIR associated programs, such as iCorps, used to help in development of
opportunities
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FUNDING AND DEVELOPMENT
ASSISTANCE

• Universities are eager to help with their own networks and ecosystems
• Opportunity to advance multiple technologies in a single area
• Access to university professors and graduate students
• University Startups looking for business support
• “Hi, I am a startup working with a USC / CalTech technology …”
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FUNDING AND DEVELOPMENT
ASSISTANCE

• International Partners
• National and NGO Programs in Countries
• Identification of Entrepreneurs
• Support Systems
• University Tech Transfer Offices
• Grant and development opportunities
• Moving Forward
• Identification of technologies
• Development of relationships
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IDENTIFICATION OF OPPORTUNITIES

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WHO ARE YOU

• Tech transfer office looking for strategies
• Bio tech expert looking for ideas
• Incubator looking for process ideas
• Funding organization looking for new ideas
• Researcher looking for sources of funding
• Anyone trying to understand the new technology funding market
• Just trying to figure all this stuff out
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YOU ARE

• An engineering consulting company that went out of business when 30
engineers and 15 draftsmen were too expensive for competitors with 5
engineers who could type and a CAD system
• Wang Labs, who went out of business when the PC market crushed the high
margin minicomputer business
• GlaxoSmithKline, who ran through mergers and watched the flow of data
upend the organization structure
• The Vanguard Group, who consolidated servers into a single IT organization
with massive infighting between the departments
• PC resellers who were crushed by Dell offering less options and a less
expensive product
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HOW DID I GET HERE

I worked here.
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I worked on projects here
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Taking techs to the world
• Completed over 70 technology assessments as part
of grant and commercialization programs
• Global relationships and universities are an
incredible source of new ideas and businesses
Funding is key
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Taking techs to the world
• Reviewed hundreds of domestic and international
technologies as part of a screening processes
• Business development projects for dozens of
universities and startups
Funding is key
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Management and
Commercialization of Science
Los Angeles / Austin
Brings us up to date, USC campus
About 15 minutes into the presentation
So, let’s talk about you.
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YOU ARE
• Type of person looking at seminar
• Money
• Money
• Money
Ideas are important, but funding takes them forward
Not everyone in this process is interested in making money
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What do you know?
• Your expertise
• Your contacts
• Your market understanding
• Your interest in trying something new
All solutions are based on your personal experience
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Getting into business has
many stages
• Grant writing managed by the university
• Process starts with grants then moves to investment
• With licensing, much of the discussion is online
You too, can get into this business
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• Everything is about Process
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THE BASICS

Let’s talk about timelines
• How fast do ideas move in a university?
• Does this matter?
• How can you make the timeline shorter?
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Research Timeline
• A professor starts with an idea
• The grant application process starts – 3 months
• If successful, the funding arrives – quarterly
• The research is completed – 1 year
• Patent / provisional patent – 2 – 6 months
Research is funded based on the cost of graduate students and
the university overhead rates
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Research Timeline
• The university develops the disclosure – 2 months
• Lawyers! – 4 months
• The patent is filed, ready for BD – 4 months
• You read about a technology
Legal section is key – the patent must be defined to be wide
enough to block competitors and not overstep other patents
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Shorten the cycle
• Work with the professors during the research process
• Be part of the evaluation for market entry
• New ideas, new technologies
It’s all about relationships
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That was supply, let’s talk
about demand
…three year old techs are of limited value
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Technology Pipeline
• Find companies that are working in this space
• Find companies that want to work in this space
• Find companies that recently failed in this space
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Technology Pipeline
• ClinicalTrials.gov is a database of privately and publicly
funded clinical studies conducted around the world
• Medical Device Clearances, Denials, and Approvals
database from the FDA
• Still more databases from the FDA
• The US Patent Database is a source for competitive ideas and
finding out the idea is not competitive – check the
applications, not the patents
• Google Scholar updates you on competitive research
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Pharmaceutical Pipeline
We are talking about process for biotechs …
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• Based on number of techs in each stage
• Invest in multiple Phase 1 that are similar
• One succeeds, others fail
• Outsource early stage development
The pipeline feeds the stock price and company financing
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• One company has a product under development
• Competition will need to decide to enter that space
• If a project fails, a new project needs to be inserted
Multiple databases track this information
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Lots of new technologies
coming out to review
• ED and ulcer drugs – new applications - Abbott
• Repurposing drugs to add to patent length
• Diabetes is a hot market right now
For diabetes, the market for Type 1 and Type 2 folks are very
different
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• Revisiting drugs replaced in the marketplace
• Compounds under patent / another use?
• Compounds in library / extra attention?
Many of these drugs and compounds have completed Phase II
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• Volume of compounds in the library
• Techniques to provide screening are of interest
How do you identify the compounds which are of interest for
extended development?
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How do we get there?
We will start with university technologies
Patented ideas, especially from people with deep pockets, is
advantageous
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University Tech Transfer
• Get to know the professor
• See the stuff earlier
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Terms
• Take option on technology for 6 months
• Option process is relatively inexpensive
• Keep renewing option
• Work with professor on advancing technology
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A few more words about
tech transfer offices
• Disclosures are limited
• Do not include information on the professor
• Do not include information on the research
• Do not include information on the timeliness
There are reasons …
The Neutrino Donut, LLC Copyright 2017 All Rights Reserved www.neutrinodonut.wordpress.com
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USC
• Tech Transfer Group
• USC Technologies
• Licensing Process
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Caltech
• Tech Transfer Group
• Commercialization Opportunities
• Entrepreneurship Programs
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UCLA
• UCLA Technology Development Group
• Search UC Technologies
• Email - UCLA TechMatch Program
• Event – First Friday – UCLA Tech Transfer
The office is located next to The Hammer Museum, museum
gives 3 hours of parking, go see some art.
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UC System
• Take option on technology for 6 months
• Option process is relatively inexpensive
• Keep renewing option
• Work with professor on advancing technology
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UC System
• “Exclusive right to negotiate”
• Option for 6 months or so
• University can’t sign lesser deal afterwards
• Not a matching offer agreement
• Key in sponsored research agreements
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Penn Center for Innovation
• Overall Link
• Techs Available for Funding
• Working with Entrepreneurs
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The University of Texas System
• UT Technology Commercialization Offices
• UT IP Regulations - Managed by Campuses
• Patent and license issued every 2 days, startup
formed every 13 days
Contact The Office of Innovation and Strategic Investment or
the individual campus
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Texas A&M University
• Texas A&M Tech Transfer Office
• Search Aggie Technologies
Also, check out The Texas A&M Extension Service, who provide
commercialization services for first responders, homeland
security, and others.
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University of North Texas
• UNT Tech Transfer Office
• Research and Available Technologies
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Baylor University
• Baylor Research and Tech Transfer
• Entrepreneurship Programs
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Army Research Lab
• Overview of Programs
• BAAs - How this seminar pays for itself
• Located at USC and other locations
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Army Research Lab
• Materials / Biological Areas of Interest
• Non-Medical Human Sciences
• Human / Computational Interaction
Also, Navy RL, Air Force RL, DARPA, and so forth …
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Reading Books
• How the military takes care of our soldiers
Available from leading booksellers
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Association of University
Technology Managers
(AUTM)
• Tech Transfer Managers
• GTP Tech Scout Alert
• Other resources available without joining
Startup program, funding sources, other opportunities
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Challenges
• Tech transfer limits information in the public NCDs
• You need more information on the professor
• You need more information on the research
• The work of screening ideas is extensive
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Challenges
• Royalty Rates to Professor / Inventors
• Focus by tenured professors on research
• Non-tenured professors have greater interest
• TRL levels are a challenge
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Technology Readiness
Levels (TRL)
• Market Entry Level
• 1-4 Research, 5-6 POC, 7-9 Commercialization
• Not precise number, but sets level
• Establishment of levels key to grants and investments
Look it up
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Reading Books
• The Bible on Tech Transfer
Available from leading booksellers
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How do I find something interesting to work with
Part 1 of this discussion – looking over the techs
Part 2 will come up shortly – how to present the technologies
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SO, NOW WHAT?

• What do you know?
• What is your expertise? / Where is your network?
• What kind of experience do you have?
• What are you missing?
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HOW TO LOOK OVER A LARGE
BLOCK OF TECHNOLOGIES

• Of the techs you know, which ones don’t work?
• No IP
• IP is part of a larger system and related IP
• Commodity space
• Poor feedback from customers
• No selling process
• Bad idea
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FIND THE LOSERS

• Losers are techs you are not interested in
• The ones which are left are the ones you want to think about
• A good idea in an area in which you have no expertise is a bad idea
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FIND THE LOSERS

• The ones which are left
• Start a deeper investigation
• Call The Neutrino Donut, LLC
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FIND THE WINNERS

Patent Process
• Now to the patent process
• We are a first to file country
• We used to be first to research
• But now we’re not
Bell v. Marconi
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Patent Process
• Need patents to sell the company
• Clock starts on disclosures
• Provisional – good for 1 year, quick response
• Full Application –completed within a year
• Full Application – Response in 2-3 years
• Trade Secrets – stuff you can’t patent
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Patent Process –
International Patents
• PCT is a uniform patent application
• Complete within 18 months of full patent application
• You must separately apply to the countries
• Hit a few key countries, control the marketplace
Or sell the company and let Big Pharma pay for the global
licensing
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No patent, no activity.
• Sales / Marketing models are harder to sell company
Another way to eliminate a technology
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Talking about your stuff
• How to meet key people …
… and make them interested in your company and technology
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• Who at your organization is responsible for
evaluating new technologies?
This is the question you must ask
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• People responsible for external technologies
• Finding them is a challenge
• Science people aren’t necessarily the contact point
• The business unit people may be a resource
• Only if this is on their list of problems
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• The wrong people get unhappy with unsolicited IP
• Companies have technology scouts
• Companies have venture arms
• Companies send people to conventions
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What about LinkedIn?
• The key to getting past the switchboard
• The key to starting the discussion with the company
• For university techs, LinkedIn does an alumni search
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Evaluating a technology,
Part 2
• What is the process?
This is how you get to the elevator pitch. The completed elevator
pitch means you have done all the other evaluation work.
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Evaluating a technology
• What is it?
• What problem does it solve?
• Who cares about solving this problem?
• Who pays to solve this problem?
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• Who will use the product?
• Who will recommend the product?
• Who needs to approve the use of the product?
Complex in the medical field with insurers, doctors, medical
systems, and technology providers
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• How is this used on a day to day basis?
• Who touches the product / data?
• Who touches the patient?
• What is the office staff doing now instead of this test?
Break down the process of using the technology and how it
impacts everyone
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• Point of Care Solutions are key here
• Is the work billable?
• Is there a value to immediate results v. sending
to a lab?
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NDA’s
• No one wants to sign them
• Learn to talk about your stuff without revealing things
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Presentations of information
• First rule – talk and write as if the person is an expert
• If they are not, they are the wrong person
They may redirect you or decline to pursue
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Elevator pitch is used to get
them to say ‘Go on”
• We have solved (this science problem) which will
impact (this market) and save (these people) money, time,
and lives.
• Talk about the science, the fact there is money in
the solution, and who you are targeting as customers.
• If they don’t care about the problem, they may
know someone who does.
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Presentations of information
• 1 sheets are good to get business people’s attention,
• Need to provide published papers
• Learn to interrupt scientists
• Assume your information is passed on for review
• You get on their desk once, make it count
Weakness in tech transfer office marketing efforts
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But never say this:
• “We have the only solution for this problem.”
• “We have no competitors.”
• “Everyone in the world is my customer.”
If nothing else, doing nothing is a competitor.
Calling everyone a customer shows a lack of focus on market
entry strategies.
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SBIR Process
• Small Business Innovation Research
Federal program for funding research and startups
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SBIR Process
A few slides from our friends at SBIR
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Lots of On-Line Training
• ON-LINE TUTORIALS
• ON-LINE TUTORIALS FROM DoD
• ROAD SHOWS
The SBIR program is aggressively seeking innovators and their
ideas.
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SBIR Process
• Know your program managers / they are online
• Get connected with them
• Is your idea a priority for their program this year?
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SBIR Process
• Funding is for startup companies
• Funding goes to the company, who hires the
professor / university
• STTR is for tech transfer offices
• R21 and others are research grants for professors
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SBIR Process
• License a technology, partner on SBIR grant
• Work with professor on research
• Multiple commercialization programs
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SBIR Process
• What is the best slot for the application?
• Is this a scanning technology or a
cancer technology?
• Get ideas on focus areas
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SBIR Process
• Government Grants
• SBIR Grants
• Awards List
Program Managers are listed as part of the grant summaries
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SBIR Process - Budgets
• $150K / 6 months – Phase 1
• $1M – 2 years - Phase 2
• Phase 3 is not an option
• University costing is with overhead
• iCorps program - $50K for marketing / biz dev
• 7% Profit – use for anything, $5K for biz dev
University overheads are 54% (UC System) to 100% (Harvard)
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SBIR Process – Review
• Two types of folks – science and business
• Write as if they are experts
• Form is tightly formatted, get to the point quickly
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• How large is market, was is the CAGR?
• What are the competitors and their pricing?
• Giant stack of well qualified applicants
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• Large stack, make quick call to eliminate techs
• Was the application formatted per the rules?
• Margins, fonts, formats, length of application count
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Working with universities
• Take option on technology
• Renew option as needed
• Leverage university resources for funding
opportunities, grants, and other resources
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Who should I talk to?
• Tech transfer offices work on metrics system
• Local groups – SoCalBio, others
• Local incubators see new ideas
• Get company funding, they get a tenant
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Other programs
• NCET2
• iCorps Programs
• Blackstone – undergrad programs
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Did you know?
• India will match research SBIR funding
• Other states will, but you have to move there
• Like Buffalo, NY
• And Kentucky
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It’s the IP
• Companies with IP get purchased
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One more book
Great for understanding business strategies
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So, now what?
• The call to action
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Next Steps
• Do an inventory of your skill set and network
• What is your main area of expertise and interest?
• Any partners/friends who might join you?
• Develop a list of local colleges
• Call your alma mater
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Next Steps
• Network at sponsoring organization
• Network at funding source events
• Network at conventions in this space
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Next Steps
• Develop a list of technologies in your space
• Eliminate the ones which are not of interest
• Meet with the sponsoring organization on the tech
• Find out what they have going on next
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Next Steps
• Review technical information on targeted techs
• Review SBIR and other funding sources for activity
• Review patent, research, and products in this space
• Sit down with your brain trust and discuss
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Next Steps
• Identify partners
• Identification is by name, email, and phone
• Identify competitors by name
• Identify funding sources by name
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Next Steps
• What is the problem everyone wants to solve?
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Next Steps
• Speak to funding sources about interest in new tech
• Develop relationship with professor and tech transfer
• Develop the plan to move forward – 2 years
• Identify Go and Stop milestones
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Next Steps
• Review Funding Options and Opportunities
• Determine Funding Levels and Budget
• Is the topic of interest to SBIR / STTR – check sites
• Communicate with Program Manager
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Earle Hager, Managing Partner
ehager81@gmail.com / 512 431 3940
Los Angeles / Austin
We should talk about what you want to do next.
The first conversation is free and we can talk about your idea, markets, and
how to move forward.
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THE NEUTRINO DONUT, LLC

Don’t Lose your Nerve
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Remember
• Your skill set
• Identification of Technologies
• Identification of funding / sales opportunities
• Execution is always key
The path to the marketplace involved funding. At the end of the day,
you need to identify where the money is coming from.
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The Neutrino Donut - SBIR Grants Process

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