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STARTUPS, IP AND ALL THAT SORT OF THINGS
IP issues as seen from the limited perspective of a
startup company active in the field of drug discovery
and development
Athelas SA Copyright
OMPI, Aprli 2005
ATHELAS’ MISSION
To provide a solution to the raising problem of multi-
drugs
bacterial
resistance
by
identifying
and
developing first-in-class anti-bacterial molecules with
novel modes of action.
UNMET MEDICAL NEEDS
OPPORTUNITY
 Dramatic increase in bacterial resistance to antibiotics
 >200 antibiotics marketed, but only 5 bacterial mechanisms
targeted, because all discovery performed in vitro
 Over the last 23 years, only 2 new chemical class of
antibiotics
Urgent need for new approaches
to fight bacterial diseases
IN THE PIPELINE
BUSINESS MODEL
Validation +
Assay Develop.
Hit
Validation
Lead
Generation
PRECLINICAL
Lead
Optimization
Late
Preclinical
Phase
I
Phase
II
Phase
III
CLINICAL
Gram
Gram negative
negative
Lead
Backup
Hits
ATH18534
Small molecules
ATH10081
Natural compounds
Gram positive
Validated hits
Natural compounds
Validated hits
Small molecules
Target-Based
Targets
Drug Discovery
IP ISSUES FOR A STARTUP
 Patents are vital assets for a high-tech startup seeking financing
BUT:
No in-house resources to deal with IP properly
Lack of general knowledge about common procedures
Difficult to identify the right(s) expert(s)/consultant(s)
Hard to justify the initial large expenses resulting from IP
redaction, filing etc.
Jungle of national regulations
No resources to proactively protect IP
ONE IMPORTANT ISSUE
 Likely origin of the patent(s): Universities
 Principal interlocutor for patent rights transfer: tech transfer
offices
 Main issues:
1. Exclusive licensing vs transfer of property
2. Costs for the startup and consequences for the future
ONE IMPORTANT ISSUE (bis)
 Why ownership is better than exclusivity for a startup?
1. Represents a negotiable asset
-
for the company
for investors
2. Management of IP simpler, in particular in case of litigation
 Why Universities don’t want to sell their patents?
1.
Tech transfer offices get recognition for building a strong patent
portfolio with projected large returns from royalties
2.
Fear that patents may not fully be exploited by startups
3.
Fear to loose everything if company fails
REMEDIES
 Tech transfer offices should accept to transfer the ownership to a
startup/spinoff providing that TCO:
1.
May get equity if local policies allow for
2.
Negotiate realistic royalties with transferable rights to subsequent
owner in case the startup fails
 This is favorable to both Universities and startups because:
1.
Startups obtain valuable assets to attract investors and get control
over its IP portfolio (out-licensing, litigations)
2.
University cannot afford to pay national patent filing and
subsequent fees, but can hope to get ROI if the patent is
recovered by another player.
3.
University can have a better negotiation position towards the
startup. Warning: upfront fees will kill the project.
OTHER IMPORTANT ISSUES
 How to get the “right people” onboard from the start to take care of IP
issues?
1.
2.
3.
4.
In-depth knowledge of company’s business
Fluent with national and international IP issues
Be able to communicate and explain
Be available and affordable…
 How to compromise between excellence and costs?
 How to factor in since the beginning possible litigation consequences?
 How to keep track of all new rulings which may influence outcome of IP
or possible litigation?
 …..
CONCLUSIONS
 IP management constitutes one of the most critical topics for a startup’s
success
 Litigation is the most fearful perspective a startup can be confronted
with in the IP field
Hence:
Any means to avoid or damper sterile and killing litigation costs, in particular
for small companies are
most welcome!
THANK YOU!
Jean-Pierre Paccaud, PhD, C.E.O.
Athelas SA
18, ch. des Aulx
1228 Plan-les-Ouates
SWITZERLAND
[email protected] www.athelas.com
Athelas SA Copyright
OMPI, Aprli 2005