Technology Transfer Accelerator Meeting with universities in order

Technology Transfer Accelerator Meeting with universities in order to kick start inputs to the project European Investment Fund Brussels, June 7 th, 2004

Agenda Presentation of EIF Technology Transfer in Europe 2 TTA-Pres. Univ-07 Jun 2004 Technology Transfer Accelerator project

Presentation of EIF European institution created in 1994 EU specialised financial instrument for SMEs acting through: Venture capital (fund of funds), guarantees (SME loan portfolios) and Advisory (Complex Financial Structures) Subscribed capital of EUR 2 billion : - 59. 6% European Investment Bank - 30%: European Commission - 10. 4%: 31 financial institutions - Rating: AAA/Aaa/AAA (S&P/Moody’s/Fitch) OBJECTIVES « Pursue Community objectives » such as growth, employment, research and development, innovation, and regional development… « Generate an appropriate return » Operating uniquely through financial intermediaries (about 190 funds, 130 guarantee transactions) on a commercial basis 3 Across 25 EU Member States + 3 TTA-Pres. Univ-07 Jun 2004 SHAREHOLDERS

EIF portfolio Situation at 31. 12. 2003 VENTURE 2. 50 billion CAPITAL (135 million in 2003) GUARANTEES 6. 45 billion (2251 million in 2003) Number of intermediaries 190 intermediaries which have invested in 1 800 SMEs 130 intermediaries which have supported 200 000 SMEs 4 TTA-Pres. Univ-07 Jun 2004 Total portfolio in EUR

EIF mandates and resources: € 8. 8 billion at end-2003 Situation at 31. 12. 2003 EUR 2. 0 bn EUR 2. 2 bn EUR 4. 5 bn Facilité ERP EUR 250 m Venture Capital (EUR 2. 48 bn) SME Guarantees (EUR 6. 35 bn) Additional until 2008+ 5 TTA-Pres. Univ-07 Jun 2004 ERP FACILITY

EIF a leading player in the European SME finance market Leading EU VC early-stage/high-tech player. EIF accounts for around 15% of early-stage market • Key EU provider of SME guarantees (loans, credit enhancement). Reached over 250 000 SMEs • Key micro-credit guarantor (EUR 180 m) • Luxembourg, 70 staff 6 TTA-Pres. Univ-07 Jun 2004 •

Agenda Presentation of EIF Technology Transfer in Europe 7 TTA-Pres. Univ-07 Jun 2004 Technology Transfer Accelerator project

Technology Transfer critical link between a bright invention and a business Licensing Proof-of. Concept / Prototype Spin-off Growth company Start-up • Tech. Transfer • Venture Capital office • IPO • Trade sale • Incubator • Business Angels • Founders • Friends / family / fools Seed capital Se Se rie s A Se rie s B rie s C 8 TTA-Pres. Univ-07 Jun 2004 R&D / patent

Europe falling behind in research • EU-US R&D Gap: € 130 bn every year & growing – Public funding gap € 25 bn – Business funding gap € 105 bn • US has early-mover advantage in many technologies – US built favourable environment over the years – US reaches scale faster, crowding out smaller players • US has advantage of large homogeneous market – E. g. federal / state funding 90 / 10 in US; EU / national funding 10 / 90 in Europe • US is an attraction pole – “Brain drain” – E. g. Glaxo. Smith. Kline relocated research HQ to Philadelphia 9 TTA-Pres. Univ-07 Jun 2004 – E. g. decision by Novartis to move research operations to Boston

Multiple issues in Tech Transfer in Europe (i) VC community typically does not address seed stage – Too small / too risky / too complex (ii) Current European technology transfer mechanisms are insufficiently developed – Lessons to be learnt from multitude of initiatives (iii) EU clusters do not talk to one another – They often relate better to US clusters (Owen/Pammolli study) 10 TTA-Pres. Univ-07 Jun 2004 (iv) Non-European operators best at poaching European ideas

EU clusters do not talk to one another 11 TTA-Pres. Univ-07 Jun 2004 Biotechnology clusters: relationships between main clusters

Agenda Presentation of EIF R&D in Europe 12 TTA-Pres. Univ-07 Jun 2004 Technology Transfer Accelerator project

TTA based on simple ideas While European research is world class, it is not commercialised to its full potential – • In particular lagging behind US This does not necessarily mean that solution lies in mimicking US – A model that works in Europe must be developed Premises: the TTA would: • Operate commercially and independently on European basis • Target advanced and emerging technology sectors • Find, develop and optimise European ideas from research and academic institutions, for sale primarily to the venture capital and corporate community 13 TTA-Pres. Univ-07 Jun 2004 •

Possible concept for a TTA in Life Sciences Investors Private funding Public funding (financial / strategic / VC investors) (PPP, EIF) University A IPR / royalty agreements TTA Life Sciences Research foundation C Research Center D Cancer projects Tissue reg. projects € 50 – 100 million funding European outlook Skill mix: tech / IP / mgt / VC “Long enough” duration (15 – 20 years? ) Vaccine projects … … Tech Transfer Acceleration … Sale to VC / Corporate 14 TTA-Pres. Univ-07 Jun 2004 Tech transfer operator B • •

TTA Project Planning 2004 Jun Jul/Aug Sep Months 1 2 2005 Oct 3 Nov 4 Jan Dec 5 6 Feb 7 Mar 8 Apr 9 Benchmarking Mapping of IPR systems Identification of participating centers Legal and tax structure Managing team Financing EIB involvement Analysis of existing situation Legal & tax structure of TTA Outline of structured vehicle 15 TTA-Pres. Univ-07 Jun 2004 Key milestones

Conclusion • Not a definitive answer or a recipe but one attempt to optimize investment in R&D/innovation • We have much to learn: iterative process • Objective: build a pilot to prove concept 16 TTA-Pres. Univ-07 Jun 2004 • Ideas and discussion welcome, thank you for listening!

EU clusters do not talk to one another (2) Arch Dev. Corp. , Univ. of Chicago (IL) Beth Israel Hospital (MA) Beth Israel Medical Center (MA) Brigham and Women’s Hospital (MA) Cedars-Sinai Medical Center (CA) Children’s Hospital Medical Center (MA) Centre Nat. de la Recherche Sc. (France) Columbia University (NY) Commonwealth Sc. And Ind. Res. Org. (Australia) Cornell Research Foundation (NY) Cold Spring Harbour Lab. (NY) Dana-Farber Cancer Institute (MA) German Cancer Institute (Germany) Duke University (NC) Emory University (GA) Fred Hutchinson Cancer Res. Center (WA) University of Florida (FL) Georgia State University (GA) Harvard University (MA) Imperial Cancer Research Fund (UK) University of Illinois (IL) Institut National de la Santé et de la Rech. Médicale (France) University of Iowa (IA) Institut Pasteur (France) Johns Hopkins University (MD) Ludwig Inst. For Cancer Res. (Switzerland) University of Melbourne (Australia) Massachusetts General Hospital (MA) University of Michigan (MI) MINN MIT MP MRC MSIN NCU NIH NYU OREG PENN PITT PUR SCR SFLU SK STAN TEMPLE TEX TJEFF TUL UAB UC UTAH UWA WA WAU WI YU University of Minnesota (MN) Massachusetts Institute of Tech. (MA) Max Planck Institut (Germany) Medical Research Council (UK) Mount Sinai Hospital (Canada) University of North Carolina (NC) National Institutes of Health (MD) New York University (NY) University of Oregon (OR) University of Pennsylvania (PA) University of Pittsburgh (PA) Purdue University (IN) Scripps Research Institute (CA) University of South Florida (FL) Sloan Kettering (NY) Stanford University (CA) Temple University (PA) University of Texas System (TX) Thomas Jefferson University (PA) Tulane University (LA) University of Alabama (AL) University of California System (CA) University of Utah (UT) University of Washington (WA) Washington University (MO) Wisconsin Alumni Research Found. (WI) Wistar Institute (PA) Yale University (CT) 17 TTA-Pres. Univ-07 Jun 2004 ARCH BETM BW CEDS CH CNRS COL COMM CORN CSH DF DK DUKE EMORY FH FLU GSU HARV IC IL INSERM IOWA IP JH LUDC MEL MGH MICH