KTO’s and their spin-offs playing a key role in the land of innovation (Part1/2)

NautaDutilh, a law firm involved in the various development stages of spin-offs conducted a survey entitled “Belgian TTO’s and their spin-offs: a match made in heaven?”. One of the main goals of the survey was to find out which sectors the Belgian universities and their KTO’s invest in and provide research units the opportunity to start up a spin-off. In regard to which sectors these KTO’s intended to incorporate spin-offs, this survey revealed that the expertise leading to a spin-off is centered mainly on three sectors: ICT, biotech, and the diagnostics and medical devices sector.

Patrick di Stefano (ULB-TTO, coordinator of the LIEU Biotech and Health Thematic Group), and Philippe Durieux (CEO of Sopartec – a member of the UCL LTTO (Louvain Technology Transfer Office) – and Co-Head of LTTO) go over these results and raise attention to the importance of other major actors involved and the strong positioning of the region in regard to spin-offs.

What is, the LIEU’s/ LTTO’s point of view regarding the NautaDutilh Survey results?

Patrick di Stefano: There is much more spin-offs created in the ICT field than in biotech than we thought [editor’s note – The survey states that eight out of the ten universities would launch an ICT in the next 12 months because they are easier to setup]. We knew there was a difference between the two but never expected that big a difference.

Philippe Durieux: We have participated to the survey and we share the general conclusions. However, I believe that the survey doesn’t point out sufficiently other success factors that are critical in creating these spin-offs. First of all, it’s of paramount importance to understand the key role of the university pertaining to the innovation and the transfer of knowledge. The technology transfer activities contribute to develop new products and solve problems thanks to research initiated by the university. They foster innovation in combination with high level of research and education. The Universities, the researchers and their KTO are the key actors in the IP generation and protection: they contribute to generate discoveries for the benefit of society.  Then, the role of the public actors is essential in the creation process of spin-offs both in upstream and downstream of the incorporation of such companies.  Universities as well as their KTOs are thereby partnering with various public actors:  the public funds partially covering the transfer technology business cycle (e.g.  the patents, the proof of concepts,  the maturation of the projects as well as their extraction, the applied research, etc.) as well as other direct actors such as DGO6 (Wallonia Public Administrative Department for Research), Innoviris, the incubators, the clusters,  the public invests who also play a critical role in the future development of spin-off companies.

ICT and the Biotech sector are 2 very promising spin-off categories. What do you consider to be the prospects for Wallonia?

Patrick di Stefano: In the framework of LIEU, the majority of the patents filed and granted are in Biotech or medical devices. Biotech represents a sector of great importance in Wallonia and the majority of Belgian Biotech companies are located in the region. I am less familiar with ICT but I think it is performing well, especially for companies such as DNAlytics, a spin-off of UCL, which is working in connection with the needs of the biotech and medical sectors through “data mining”, database management for genetic data, but also applications such as rehabilitation support for disabled persons. To give an excellent example of a successful long-term project in the very field of biotechnology, DelphiGenetics, a spin-off of ULB, was created based on licensing of patented technologies from the university and has managed to develop partnerships with big pharma companies. They have contracts set up already with companies like GSK, Sanofi Pasteur, Merck, etc. Companies and universities have access to subsidies but, to be granted, they have to collaborate with one another. Open innovation is key and illustrates the dynamics within the region brought on by, among others, the Plan Marshall and especially BioWin (the Health Cluster of Wallonia).

Philippe Durieux: UCL has developed approximately 50 spin-offs over the last 15 years.  The biotech/healthcare represents the lion share of these future spin-off companies, certainly in terms of number of patents, capital requirements or staffs created. The biotech represents around 50% of the projects at UCL, followed by ICT and Materials. You have to take into account that biotech projects needs significant capital requirements, higher than ICT projects. You can set up a web based company with limited capital. This is almost impossible for biotech, medtech, or industrial projects. Some examples of recent projects at UCL illustrate this trend: Novadip, a biotech cell-based therapy company is looking for a large A1 round of €8 mio to finance the first clinical trials. For the medtech sector, Axinesis, a future spin-off company, developing companion robots to help patients’ rehabilitation following a stroke is preparing a capital round of €2mio. In ICT, a future company, named Gestmily, active in emotion analytics, is finalizing a seed round of €500k. A potential large industrial cleantech project, based upon a very innovative hybrid supercapacitor-battery is currently working on its business model but will most likely need a capital similar to what is needed in the MedTech sector.

Although taking third place in the survey, how do you perceive the diagnostic & medical devices sector positioned in the future? Do you envision any combination of these sectors merging to offer a new technology?

Patrick di Stefano: I would say for medical devices, for ULB, about 30% of our spin-off projects relate to medical devices, not far from the proportions given in the NautaDutilh survey, and as far as I know the figure is similar throughout the LIEU Network. I think it’s a significant number and we have actually more projects in the pipeline in medical devices and diagnostics than in Biotech for the moment. Medical devices remain a secure sector for the future. I don’t think it will reach first position but they will remain in 2nd or 3rd position for sure. With regard to any potential combination of sectors, for the spin-off projects relating to medical devices, it is often times the engineers are carrying out the project. And as I spoke of Bioinformatics earlier, we are definitely in diagnostics, with companies such as OncoDNA that provides DNA analysis for diagnostic, or DNAlytics I already told about, which uses the engineering competences to obtain results. Or we combine the new diagnostic techniques, for example with biological pathways being discovered.

Philippe Durieux: The medical devices sector will increasingly benefit from research in other areas like robotics or biology. So we might expect an increasing number of spin-offs in this sector. However the medical devices sector is facing a more and more complex regulatory environment with high industrial standards rather similar to the biotech industry. The routes of exit seem more obvious for biotech companies while the concerns of reimbursement become more and more critical for both sectors. This reimbursement component is key: the pharmacoeconomic analysis are henceforth released at the inception of the company. This suggests that this sector will become more and more similar to the pharma and biotech ones.

Moving forward, what can Wallonia expect from universities? Do universities have strategies through their Tech Transfer Offices that will help bridge the gap biomedical industry in Wallonia?

Patrick di Stefano: Belgian universities and especially the universities of Wallonia have an excellent competence. Now, since a few years, they have learned to collaborate with companies and to create good spin-offs and this has been made possible thanks to the support to the KTO’s and the LIEU Network. What is great with BioWin and the Marshall Plan in general, they made it essential for universities and companies to work together.

Philippe Durieux: The fundamental academic research is key to ensure the production of discoveries with societal impact. This requires the top researchers on an international level, an ongoing support of the public authorities and interaction with industry.  High quality science is not incompatible with industrial exploitation of the discoveries. Based upon an empirical Katholiek University Leuven (KUL)’s study, “engagement of academia in entrepreneurial activities coincides with increased publication outputs, without affecting the nature of the publications involved. As resources increase, this interaction becomes more significant”.  Building bridges between science and industry for the benefits of the welfare of the society is one of the key missions of UCL. The academic research, through an integrated technology transfer process like the Louvain Technology Transfer Office (LTTO), fosters innovation in combination with high level of research and education. UCL is also at the initiative of VIVES 2, a technology fund of €43m, which represents a real opportunity to adequately fund UCL’s spin-off and hence to have a positive impact on the local economy. VIVES helps to build new links between UCL researchers and external start-ups in search of innovative concepts (within a range of 250km around Louvain-la-Neuve). The cross border nature of the fund strengthens also cooperation with other European universities through cross-fertilization in the creation of spin-offs. In short, VIVES fosters UCL’s innovation through the funding of spin-off as well as technological start-ups. Combined with the work of UCL KTO, it aims at bridging academic research with entrepreneurship.

KTO’s and their spin-offs playing a key role in the land of innovation (Read part 2/2)

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