Tech Tuesday

Bryan Ritchie, Executive Director, TVC

March 10, 2015

Commercialization at the U

1968 20112005

“Throw it over the wall” “Startup”

Future

“Growth”

IP Protection at all costs

Form Companies

Process and Systems

Add Value

Task

Objective KickstartEcosystem

Defend Interests, license to existing companies

2014

“Champion”

Run the Company

Take to First Funding and Capable Management

New Startups

4

Leading innovators and cancer centers Institutions were selected based on an analysis of~140 AMCs* to represent a mix of Efficiency and Financial Success...

* Analysis based on AUTM data; only top 35 are graphed

** Efficiency = Avg. Research Exp. per Invention Disclosure Ranking + Avg. Research Exp. per Startup Ranking + Avg. Research Exp. per Patent Application Ranking

*** Financial Success = (Average Income per Active License Ranking

Source: AUTM Licensing Survey 2007, PwC Analysis

UCa

JHU

MIT

UW

UI-Chic, Urb

UMich

SUNY

UPenn

PSU

CalTech

UFl

Cornell

GaTech

MassGen

UMn

UGa

IaState

Duke

NYU Emory CityofHope

Utah Colorado

Purdue

CMU

CC

SloanK

MDAnd

Brig Mayo

Dana-FarbFoxChsFredHtch

Vand

20

40

60

80

100

120

140

160

20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400 420

Yie

ld

Efficiency

Efficiency vs. Yield

More efficientLess efficient

Lower Yield

Higher Yield

Best performers

Med

ian

= 19

6

Median = 102

Fin

an

cia

l Su

cc

es

s**

*

Less Successful

More Successful Note: Graph does not include Columbia or Moffitt, which were also included

Efficiency vs. Financial Success (See footnotes for definitions)

**

$0 $200 $400 $600 $800 $1,000 $1,2000

100

200

300

400

500

600

700

DisclosuresPredicted DisclosuresTop 50 PredictedGoal

Num

ber o

f Disc

losu

res

Millions of Federal Research Dollars

CalTech

MIT

Some Surprises

An Interesting Truth about Tech Transfer Returns

FY'81

FY'82

FY'83

FY'84

FY'85

FY'86

FY'87

FY'88

FY'89

FY'90

FY'91

FY'92

FY'93

FY'94

FY'95

FY'96

FY'97

FY'98

FY'99

FY'00

FY '01

FY'02

FY '03

FY '04

FY '05

FY '06

FY '07

FY '08

FY '09

FY '10

FY '11

FY '12

FY '13

FY '14

FY '15

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Revenue From Startup Percentage

Where is Commercialization Today?

Questions for University of Utah:• What about everything else?

– Cross university bundling/startup– Litigation?– Internal, wholly owned subsidiaries

The “Bigs”…– Columbia– Stanford– WARF– Cal Tech– University of Utah

…trying to figure out where to go next…

U of U ranked number 4

by Nature after U of Cal system, U of Washington, and U Penn for life science output

Licensing to Existing Companies

University of Utah Stats:• 77% total average revenue from startups since ’81

• 82% average revenue from startups over last 10 years

1. Columbia2. Washington3. Arizona4. Florida5. University of Utah

All report ZERO significant deals with non-health care fortune 500

Transitions from idea to financial return

• Disclosures to licenses: 5785/969 = 16.75%• Licenses with any revenue: 62.85%• Licenses with R or E revenue: 15.07%• Licenses with any revenue over 100K: 8.46%• Licenses with R or E revenue over 100K: 3.1%• Licenses with any revenue over 1m: 1.44%• Licenses with R or E revenue over 1m: 1.24%

– 1.21% of technologies disclosed are associated with licenses that generated over $1m

TVC Licenses Producing Revenue

1 2 3 4 5 6 7 8 $-

$50,000.00

$100,000.00

$150,000.00

$200,000.00

$250,000.00

$300,000.00

$350,000.00

0

20

40

60

80

100

120

140

Average income per "income generating" license

Licenses generating income per year

Time to Market

0 200 400 600 800 1000 12000

200

400

600

800

1000

1200

FY05-FY09 FY06-FY10 FY07-FY11 FY08-FY12

Average Days

Inv

en

tio

n D

isc

lso

ure

s

Average today is 2.19 years from disclosure to revenue

U of U: Bumping against constraints

Despite high ranking and great progress:• Revenue sources not diversified• Revenue timing is lumpy• Difficult to leverage outside “seed” capital• The “Founder to Operator” gap

– Internal conflicts of interest– Compensation

• Consultant dilemma• Employee equity dilemma

What is it? What is the Opportunity?

Validation and critical path forwardFunding and other resource allocation

Execute

1. Technology Disclosed

2. Milestones

3. Milestones Met

What is it? Opportunity? How to address it?

Stage GateDecision options:1. Move to 4 Cylinder2. Release to Inventor3. Await more technical development

Vetting, Validation – Business Model Gen.

1. Technology begins 4-Cylinder phase

2. Testing Assumptions and Advancing the Technology

3. Seek funding

TVC

6. REPEAT WITH OTHER TECHNOLOGIES

4. Repeat

5. Milestones met

External Input

Investors EntrepreneursSubject Matter Experts

License and Commercialize

1. Technology moves to the hands of licensee

2. TVC engages licensees (ongoing)

3. Milestones Met/ Successful Commercialization

Current Commercialization

Normal TTO Value-Add Level

EngineFunding

TVCValue-Add

UURF ROI

Difficulty engaging Mgt.

Value Growth

Value of Technology

Value NotCaptured

ValueCaptured

Value NOTCaptured

Sweet Spot for UURFto engage outside Mgt.

Univ.Invention

Commercialization

Typical TVC Managementengagement

What is Needed to Move Forward?

• More money?• Better Operators?• Better Ideas?• Better Protection?

• Derisking Partners!!– Biggest pain is finding right people to lead the

venture– Everything else follows