Alternative licensing models to stimulate innovation

Thomas Krohn, RPh, MBADirector, Clinical Open InnovationEli Lilly and Company

World Drug Repositioning CongressWashington, DC5 December 2012 “Please note that some of the views presented do not

necessarily reflect those of Eli Lilly and Company”

3 Goals Today

• Case for alternative licensing/business model• Lessons from other industries• Example alternative model

Drug Development Today

Targeted Confirmation

Closed

Exploratory

Collaborative

patent

Innovation Process

Licensing Today

patent

Portfolio Attrition

Business Development Deal

Portfolio Gaps

Patent clock tickingAsymmetric informationInconsistent RepresentationCustom DealsEffort and timePrioritization / Opp Cost

Backup Compounds: Licensing Concerns

• Cannibalization of lead compound• Class-effect safety concerns• Partner does bad science• Loss of ownership and control• Intellectual property issues

Red Herrings or Mitigable Risks

Incremental Improvement

We need a bolder alternative

to S1'

to S2S1

Time

Performance

DisruptiveChange

• Simpler• Faster• Cheaper

• Sustaining Innovation• Efficiency Innovation• Empowering Innovation

Clayton Christiansen – NYT, 11/4/12

Learning from other industries

• Access to options - buy & sell• Standard content representation• Streamlined transactions• Licensing to enable external innovation

Access to options - buy & sell

Music Industry

PhysicalPurchase

MP3 Download

SubscriptionAny music, anytime, anywhere

Collectibles

Standard content representation

Amazon Search

Clinical Collections

Streamlined transactions

Enabling external innovation

Open source software– Licensing

Creative Commons Licenses

Exclusivity

Permission required

Creativity

Predefined permission

Absolute Flavors

Copyright Copyleft

Enabling external innovation

Open source software– Copyleft Licensing– Collaborative Development– Full transparency

Linux Forks

$1B

Learning from other industries

• Access to options- buy & sell• Standard Representation• Streamlined transactions• Enabling external innovation

Removed Barriers to Market Innovation

Licensing Today

patent

Portfolio Attrition

Business Development Deal

Portfolio Gaps

Patent clock tickingAsymmetric informationInconsistent RepresentationCustom DealsEffort and timePrioritization / Opp Cost

What if?

patent

Portfolio Attrition

Business Development Deal

Portfolio Gaps

Patent clock tickingAccess/Clearing HouseSymmetric informationStandardized RepresentationStandardized DealsInnovation Enabling Licensing

Example Model : Commons Drug Development

Creative Commons Model Patent License

CC Public Patent License

Optional Addendums• License Fees and Royalties • Field of Use• “Have Made” Limitations • Choice of Law• Choice of Venue• Territory• Offer Limitations

Advantages• Standardized• Streamlined• 3 Layers:• Legal Code• Human Readable• Machine Readable

http://wiki.creativecommons.org/Model_Patent_License

Commons Drug Development

Pharma Biotechs Academics Foundations Individuals

• standard “rules” of entry• standard legal tools• standard data formats• must contribute data to access data• voluntary commitment

selected creation of precompetitive data spaces

• preferred strategic partners• same rules and formats: interoperability• creation of a data “commons” over time

2

• “decay” of data into public domain• foundation funding and crowd talent• encourage tool development by crowd

3

1

Empowering Innovation

More Information

• www.creativecommons.org• www.lillycoi.com

Thank You

Thomas Krohn, RPh, MBADirector, Clinical Open InnovationEli Lilly and Company