22 december 2014 · challenges, barriers and enablers of securing large investment in scotland ip...

Commercialisation Support Lot 3 – Life Sciences Specialist

Scottish Enterprise

Proposal

22 December 2014

Confidential

P2725/SE

Head Office: Optimat Limited Torus Building, Rankine Avenue, Scottish Enterprise, Technology Park, Glasgow G75 0QF, United Kingdom

Tel: +44 (0)1355 272 800 Fax: +44 (0)1355 272 556 Email: [email protected] Web: www.optimat.co.uk

Registered Office: 21 Hunter Street, East Kilbride G74 4LZ Registration No: 141727

Table of Contents 1. Introduction ................................................................................... 1 2. Management & Delivery Methodology ................................................ 2

2.1 Core Capabilities and Understanding ............................................................. 2 2.1.1 Core Knowledge of the Life Science Sector ....................................................... 4 2.1.2 Funding Landscape ...................................................................................... 6 2.1.3 IP Management ........................................................................................... 8

2.2 Management and Delivery Methodology ...................................................... 10 2.2.1 Commission One ........................................................................................ 11 2.2.2 Commission Two ........................................................................................ 13 2.2.3 Commission Three ..................................................................................... 16

3. Delivery Team .............................................................................. 18 3.1 Delivery Team Model ................................................................................ 18 3.2 Roles ..................................................................................................... 18 3.3 Contact Details ........................................................................................ 22 3.4 Supporting Processes ............................................................................... 22

4. Key Strengths and Added Value ...................................................... 24 5. Pricing Schedule ........................................................................... 25 6. Concluding Remarks ..................................................................... 26

Appendices Appendix A – Sector Specialist Profiles Appendix B – Signed Documents

Commercialisation Support – Lot 3 – Life Sciences Page 1

1. Introduction

This proposal is in response to your Invitation to Tender for Commercialisation Support (Tender Ref: P15-0047), and specifically for Lot 3 –Life Sciences Specialist.

It builds on our successful PQQ in which we detail our proposed consortium comprising Optimat Limited and Isis Innovation Limited, including details of our relevant experience and complementary expertise. We believe this to be a key strength of our proposal and our consortium offers the following benefits to Scottish Enterprise in the delivery of the Commercialisation Support framework:

We have structured our proposal as suggested in your Invitation to Tender and start with a section entitled ‘Management and Methodology’ in which we present our Lead Advisors understanding and knowledge of the specific challenges facing Technology Commercialisation in the life sciences. We also include an overview of our knowledge of the local, national and international funding landscape and the challenges of successfully realising large scale investment in Scotland. We complete this section with a demonstration of our understanding of the technology development and IP process and align this with the specific needs of the life sciences sector.

This is followed by a stand-alone section on our Delivery Approach and Team in which we present our delivery team and how we will engage with Scottish Enterprise and the proposed ‘virtual’ network of specialist advisors as well as our client engagement process. On this note it is worth highlighting that if our consortium is successful in winning all four Lots, we aim to implement a Project Coordinator that will act as a single communication channel between Scottish Enterprise and our team, and provide a coordinating role across our delivery teams for all four Lots within the framework.

We conclude by offering some value adding benefits of our proposal before presenting our pricing schedule in the format requested in the Invitation to Tender.

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2. Management & Delivery Methodology

2.1 Core Capabilities and Understanding We are proposing a team of four Specialist Advisors that will be delivering Commercialisation Support to life science sector companies within the Framework. More will be said later about their specific roles within our delivery model in section, but here we present our team to demonstrate the breadth of expertise and how these map against the requirements stated in the Invitation to Tender.

We will discuss in a later section their respective roles and our delivery model but for the moment we wish to demonstrate their practical knowledge of the technology commercialisation process and in particular its relevance to the Life Science sector. The following table highlights the capabilities of each member of our team that have been selected for their different and complementary areas of expertise as required to address the stated quality criteria for the delivery of the project.

1 ‐ QUALITY CRITERIA

Successfully Commercialising New Technology

Working at Exec / Board Level

Business Model / Planning

New Product Development

Route to Market

Team Development

Local, National, International Funding Landscape (investors)

Local, National, International Funding Landscape (public sector)

Challenges, Barriers and Enablers of securing large investment in Scotland

IP Development Process

IP Protection and alignment with route to market challenge

Sector specific IP Challenges

Network of Contacts in Investment Community

2 ‐ CAPABILITIES

Start Up Planning & Business Models

Industry Trends & Business Models

Market & Competitive Assessments

Business Plan Development

Commercial ‐ Markets & Sales

Customer / Market Segments & Opportunities

Customer & Market Validation

Routes to International Markets

Market and Customer Behaviour / Sales Cycle Times

Relevant legislation, Regulation & Directives

Product Development & Manufacture

Technology Trends and Development Cycle Times

New Product Development Methodology

Manaufacturing & Supply Chain Interdependencies

Financial Strategy & Investment Requirements

Funding Strategies, Methods & Routes to Investment

Investor Readiness and Preparation

Funding models and Industry Specific Funds / Funders

Leadership & Team Requirements

Team Capability and Gap Assessment

Chair, Board and NXD Requirements

Team Investor Expectations

Specialist

Expertise

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Medical Devices

Drug Discovery & Testing

Stem Cells

Diagnostics & Therapeutics

Industrial Bio‐Tech

Bio‐Tools

Regenerative Medicine

Connected Health

Animal Health

In addition the following table highlights the specific domain expertise for each one of our Sector Specialists relating to Life Sciences. There are many distinct sub-sectors in the Life Sciences and our team has been chosen to cover the broadest range of expertise across these sectors. We would like to highlight that our team has a very strong background in every stage of commercialisation, including; academia, IP protection, IP strategy, team formation, executive board experience. Three of the team members have supported the creation of many companies and two members have founded companies in the life sciences.

Specific examples of support delivered in the Life Sciences sector to form technology based companies of scale include:

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In the following section we provide an overview of our understanding and in depth knowledge of the Life Science sector, from the perspective of challenges to successful commercialisation of technologies for life science SMEs. All members of the specialist team have provided input demonstrating the breadth of our experience and core knowledge of the sector.

2.1.1 Core Knowledge of the Life Science Sector

There are many unique challenges in the life science sector in supporting the creation of new companies. One of the most significant current challenges is the time to revenue creation. Typically this is much longer than non-life science companies because of ongoing R&D programmes and lengthy regulatory processes.

A second challenge, or mistake made by many Life Science companies is not focusing on understanding and engaging with the market. Too many companies develop a product/service before they know if there is a market for it. Having an early revenue stream buys the company time to engage with the market. For example most Life Science companies develop platform technologies which (by definition) means there are a number of products that need to be developed.








A lack of translational funding coupled with high product development costs is another challenge for Life Science companies. The funding landscape is described in further detail in the following section, but it should be emphasized that

A challenge faced at universities is deciding when to spin-out the company. There has been a tendency to spin-out too soon driven mainly by the lack of Proof of Concept funding, which in turn creates a need to publish to apply for further research grants and therefore bringing forward the need to patent. Therefore companies are formed with a lack of supporting data which prevents them either from attracting investment or from securing license deals.

Strength of the team is widely recognized as an essential requirement for the sustainability and success of a new company, and this is equally true in the particularly high risk sector of life sciences. Attracting talent (senior executives and skilled postdocs) can be a challenge particularly in more rural areas.

1 http://www.venturefestoxford.com/about-venturefest/venturefest-network/









It is often believed that companies have to get to a late stage of technology development to secure a deal (partnership or license) with a large pharmaceutical company. This is less of a problem than it used to be because many large pharma companies are scaling down or closing their in-house R&D departments and instead focus on collaborating with smaller companies as a faster and low cost method of developing their pipelines. That said, proof of concept studies with in vivo data and ideally first-in-man studies are often necessary to attract industry interest, but the bar is certainly lower than it used to be.

The extended time to revenue for Life Science companies means investors need to know that the IP strategy ring fences the target market, making IP management crucial in this sector. Many companies are founded on a weak IP position, sometimes even a single patent, effectively preventing investment.

2.1.2 Funding Landscape

Businesses in Scotland have access to a wide range of public and private funding resources to drive both start-up activities and the growth of established businesses. Some examples of relevance to the life sciences sector are:

Smart Scotland: support to develop innovative products Weir Charitable Trust: grant support relevant to health and animal welfare Scottish Enterprise R&D Grant: support for businesses developing new products,

services and processes Scottish Seed Fund: equity finance for early stage, high growth potential companies Scottish Venture Fund: venture capital match funding available to growth companies Early Stage Technology Fund: venture funding for disruptive technology businesses Highland Venture Capital: private venture capital for businesses across Scotland A number of regionally focussed funds covering East, West and Highland areas Innovation Voucher Scheme: aimed at supporting interaction between SMEs and

HEIs

Arguably Scotland is better catered for in terms of business funding than other regions of the UK and information on these funding resources appears well organised and consolidated – there is something of a ‘one stop shop’ at http://business.scotland.gov.uk/ which is very useful. Having said that, businesses often face challenges (see table below) in identifying and securing the funds they require and Scottish businesses will be no exception to that rule. Businesses in remote and rural areas may face additional challenges in accessing the





necessary networks that facilitate funding. Of course, in very general terms, financing is only one of the key issues a life science business faces on its journey to sustainability. Below we summarise and comment on the funding challenges life science businesses may face in Scotland.

Challenge Reason

Business unaware of funding opportunities

Many business owners are not aware that funding other than traditional bank lending is available, or what new funding instruments are available

Businesses tend to focus heavily on the day to day running of the business. It can be a challenge to attend events aimed at promoting funding opportunities or even to devote the necessary time to scan for funding opportunities.

Businesses confused by multiple funding opportunities

Even when businesses are aware that non-traditional funding sources are available they may still find it a minefield identifying the most appropriate funding stream for their needs and obtaining appropriate advice to direct them through the plethora of information.

Businesses deterred by application processes

Applying for and securing funding is generally a complex and often long process. Businesses may not have the time or skills to navigate this process.

In the case of venture funding the need to pitch a strong business plan and team is a formidable undertaking for many early stage businesses, and one that often takes an inordinate amount of time and distraction from managing the business.

Onerous post funding obligations

Some funding sources are accompanied by a high bureaucracy load that may even persist after the funding has been put in place. This places a burden on businesses that diverts from core activities and is sometimes unexpected.

Venture funding is people focussed

Above all else, when businesses apply for equity finance the focus will be on the team and its track record. If the team do not have an appropriate track record it is likely someone will need to be brought in to front the business.

It will be a focus of the services provided by Isis Enterprise to support businesses looking to secure funding. Such support will include:

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2.2 Management and Delivery Methodology The following section details how Optimat and Isis Enterprise (Isis) will apply our relevant technical backgrounds, commercial skills, experience and knowledge to provide high quality commercialisation support to support the growth of new high-potential Scottish companies and university projects.

Contact between Scottish Enterprise (SE) and the clients will be managed by a dedicated Lead Sector Specialist who will be responsible for securing the most relevant team from Optimat or Isis to deliver the work required.


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4. Key Strengths and Added Value



5. Pricing Schedule

The following table represents our pricing for each of the commissions as detailed in our proposal and that relate to your requirements in the Invitation to Tender.

We believe that this offers significant value for money for the potential client companies of the Commercialisation Framework as it offers access to Advisors that are well connected and have knowledge of state of the art technologies and applications.

We accept the terms and conditions of Scottish Enterprise.

Where possible our preferred invoicing terms are monthly in alignment with progress.

VAT will be charge in addition on both fees and expenses at the prevailing rate.



6. Concluding Remarks

We thank you for the opportunity to submit our proposal to provide a team of Specialist Sector Advisors to provide technology commercialisation support to high growth start ups and high growth University spin outs as part of the SE Commercialisation Programme Framework.

We have proposed a consortium that we believe offers significant value to the proposed programme and ultimately to the client companies that participate on it. Our team comprises Optimat Limited and Isis Enterprise Limited and this offers a unique combination of complementary expertise:

Optimat has carried out numerous company support programmes relating to the commercialisation of new technologies and currently provides support to Life Science companies throughout the UK

Isis is the Technology Commercialisation and Innovation arm of Oxford University and specialises in University Spin Outs and is well connected regarding the investment community across Europe, Asia and US. They also have considerable experience in supporting the development of Life Science companies, across the major global markets and territories.

We offer a team of four Specialist Advisors that will ensure credibility and that will be selected on a best-fit basis with the specific needs of the client.

Our team is also submitting a proposal for the other three Lots within the Framework i.e. Energy, Technology & Advanced Engineering and IT and Digital Media. If we are successful in being selected for all four Lots, we will implement a dedicated project manager that will coordinate the various resources within our collaborative team, and also act as the communication and reporting conduit to Scottish Enterprise. It will also allow us to explore a client facing web based project management site that will offer secure and client specific file storage related to progress, and allow us to develop and implement a series of ‘technology commercialisation’ materials that can be utilised by the clients across sectors.

We are extremely motivated by this programme and are keen to make this a success on behalf of Scottish Enterprise. We also remain flexible in our engagement and are open and willing to work in partnership with the various other Scottish Enterprise specialists on the framework i.e. the Virtual Team model.

For and on behalf of Optimat Limited



Appendix A: Sector Specialist Profiles

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Appendix B: Signed Documents