home > > autumn 2014 > enhancing assets

Enhancing Assets

“The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.” The words of management guru Peter Drucker seem to have been taken to heart by the pharmaceutical sector in particular; while change is happening everywhere, it is occurring especially fast in this industry. Intellectual property (IP) teams are being downsized, and pharma companies are looking to squeeze every last drop from their IP portfolios. In some cases, organisations will have changed so much over just a few years that IP portfolios may have become distanced from the mainstream business.

The situation surrounding the changes taking place within pharma is reminiscent of the 1990s, when many believed that one of the few giant telecoms companies would take a dominant IP stance in providing communications technology. Yet, perhaps surprisingly, none of those companies now hold that predicted strong position. The major players of today – including Microsoft, Google, Facebook, Apple and Samsung – all operate very different business models to those of the large corporations of the 1990s.

Many new companies in large industries have a distributed, open business model where they are open to, and encourage, innovation from outside sources. As is the present trend in many sectors, skilled IP experts left the monoliths to set up small IP trading/brokering companies. This facilitated a network for the commercialisation of under-utilised IP.

The larger corporates started to sell their patents and small firms sprang up, which then sold their developments back to the broader industry.

Changing Business Model

Organisations generally look to IP to enhance their businesses in a number of ways. These include using IP to help protect their market share; monetising it through licensing and royalties; or selling IP portfolios for others to exploit. However, transferring technology and collaboration can benefit pharma companies in other ways. A greater awareness of the increasing costs of R&D is resulting in more and more companies looking for ways to keep expenses down. One way is to buy in technology from another pharma company, a hospital, a university or, perhaps, a small biotech firm.

The trend towards technology transfer in pharma companies may be driven, in part, by a lack of interest from public investment. This lessening of interest is also responsible for new collaborative initiatives – such as the announcement in March 2012 that GlaxoSmithKline and Johnson & Johnson were creating a $200 million fund with IndexVentures to invest in early-stage biotech companies. The formation of the non-profit organisation, TransCelerate BioPharma, by a number of biopharma firms to accelerate the development of new medicines is another example.

Pharma’s Future

PricewaterhouseCoopers (PWC) has produced a number of reports looking at the future of pharma. In Pharma 2020: The vision: Which path will you take? PWC claims that “the current pharmaceutical industry business model is both economically unsustainable and operationally incapable of acting quickly enough to produce the types of innovative treatments demanded by global markets” (1). The report continues: “Most Big Pharma companies have traditionally done everything from R&D through to commercialisation themselves. However, by 2020 this model will no longer work for many organisations. If they are to prosper, they will need to improve their R&D productivity, reduce their costs, tap the potential of the emerging economies and switch from selling medicines to managing outcomes. These activities few companies, if any, can accomplish on their own.”

In many cases, the cost of R&D, or rather the percentage of compounds that fail to make it past Phase 2 or 3 clinical trials, is just too high for many companies to be able to continue taking big risks on their own.

Going forward, collaboration looks to be the latest buzzword. One of the challenges in developing this business model, however, is to identify organisations with the right technology, and then persuading them to sell it.

Of course, for universities or biotech companies the issue may be down to what might be saleable and to whom. Those in a position to dispose of technologies and associated IP also need to understand the steps they need to take, in terms of preparing their IP portfolios before they approach a larger company with a view to a technology transfer deal or collaboration.

Understanding Assets

Crucial to putting such a deal together effectively is a good understanding of the IP assets. It is important for all the organisations involved to be fully aware of the intangible and future potential value of the various aspects of their IP portfolios, as well as the various options regarding disposal of parts of the portfolio that no longer fit the projected business model. Those wanting to transfer technology and collaborate also need to know how to fully protect and commercialise their IP, in order to make it attractive and relevant to larger organisations that may be interested in a technology transfer arrangement.

A thorough review of the portfolio – to determine what is worth keeping in terms of IP for further development and commercialisation, and what might be better to sell or lease – is an excellent step forward. As part of this process, the IP holder needs to conduct a thorough, independent portfolio analysis to identify technology transfer and collaboration opportunities. Engaging a technical expert to review the patents in a portfolio can identify opportunities that internal researchers and managers may have overlooked. As Einstein said: “We can’t solve problems by using the same kind of thinking we used when we created them.” A new perspective will identify cost reductions and value that can then be realised through monetisation options, including licensing and other creative solutions.

IP Landscape

Techniques such as landscaping undertaken by an IP specialist can prove very useful in the above process. Carried out using recognised databases and registers, a map of the IP landscape surrounding an organisation’s core technology, secondary technologies, processes and know-how is created. Landscaping includes identifying competitor activity that may hinder the ideal route for taking a new technology-based product or service to market. Knowing the competition, a specialist can help companies to protect their position and develop defence strategies through improvements to their existing IP, partnership or licensing options, as well as identifying the value of their intangible assets. Such specialists can also assess and track the commercial potential of the products and services at different stages of development. In addition, this process prompts decisions on whether, and how, to protect the underlying assets, or if it might be better to sell or license them to others for exploitation.

Some of the considerations to address include:
  • Putting together a future commercialisation strategy, in order to gain a better understanding of your competitive position and how robust it is
  • Looking at the value of your under-utilised IP portfolio, and what you might be able to liquidate
  • Understanding the strength of a company’s IP before considering an investment in it
  • After investing in a diverse number of research areas, focusing on future investment in areas which hold the best opportunities for commercial exploitation
  • Thinking about licensing opportunities that might exist for your patent portfolio
  • Deciding whether or not to collaborate with other organisations that have closely aligned or complementary IP
While the responses to these points will be unique to each business, the approach to addressing the wide range of challenges posed by them is underpinned by a proven set of analytical tools and methodologies.

Of primary importance in preparing for a collaboration or change of direction is the need to discuss the context of the questions being asked, and to develop sufficient knowledge of the drivers influencing the amendment or partnership. With such understanding in place, the IP landscape can be investigated so that it better informs a change or collaboration, and allows for a greater chance of success.

Collaborations for Change

Collaboration may involve teams working together on product development and research, for example – both of which are likely to generate intangible assets. Such a venture can include contractors and, once again, attention must be paid to IP issues. As always, preparation is key to success, and all those involved in a collaborative venture should arm themselves with an understanding of the possible pitfalls and how to avoid them, including using contractors effectively, in order to maximise the benefits.

In an ideal scenario, all parties will have a positive relationship and the work should proceed to the satisfaction of all those involved. But, in reality, disputes do happen, and it is important to ensure that a good agreement – which is fair to all parties – is in place from the outset. One issue that can arise is who owns the IP under development.

Initially, this may all seem straightforward – the agreement will specify the length of the project and the terms of engagement of any contractor. But there are other aspects to consider, including: is the contract sufficiently robust to prevent the contractor selling similar – if not identical – background or arising IP (all or just part) to another company? What is the position if the contractor has previously provided something similar to another company? And who owns that IP?

Careful attention to the content of the contract is essential, as is having a provision in place for dispute resolution from the start of the outsourced project. Additional issues to consider may include how extensive the contract should be, as there may be circumstances in which it is appropriate for the contractor to retain ownership, or rights to the IP they create.

It is also important to ensure the contract is drafted to cover a scenario where the contractor further subcontracts some or all of the agreed work. Unless the contract contains specific clauses to cover this, there may be no requirement to declare that work has been further subcontracted, and those who have appointed the contractor may be unaware that this has happened until a problem arises. All of this, of course, is crucial in any client-contractor relationship, but issues are often compounded in a collaborative situation and should be planned for in advance.

Planning Ahead

Using tools such as technology transfer and collaboration, and ensuring that IP is used strategically as a tradable asset, is not without its challenges. However, by planning in advance and engaging outside help when necessary to achieve a full understanding on all sides, organisations are more likely to be able to withstand the pressures of change, and create and maintain a business model that is flexible enough to accommodate a rapidly changing world.

1. Visit:

Read full article from PDF >>

Rate this article You must be a member of the site to make a vote.  
Average rating:

There are no comments in regards to this article.

Jackie Maguire, Chief Executive, is a physicist and chartered engineer with director-level experience in operations, marketing and business development. With over 20 years of technology transfer, commercialisation and consultancy experience, she has established Coller IP, recognising the importance of protecting intangible assets within a business to increase its value. Jackie is a globally recognised IP strategist and a founder of the International Intellectual Property Strategists Association. In 2009, she was listed by Intellectual Asset Management magazine as one of the top 300 IP strategists worldwide – and in the top ten in the UK – and has been confirmed in this position every year since.
Jackie Maguire
Print this page
Send to a friend
Privacy statement
News and Press Releases

3P Biopharmaceuticals welcomes Keensight Capital as majority shareholder

More info >>

White Papers

ConsulTech GmbH

ConsulTech GmbH

ConsulTech is a consulting company founded in 1992. Since then, we have been supporting biotech-nology, pharmaceutical and medical technology companies as well as research institutions with the entire process of setting-up and executing proposals for R&D projects. In projects funded by the European Commission, ConsulTech supports the coordinator by resuming administrative tasks allow-ing coordinators and partners to fully concentrate on the scientific and technical success of the pro-ject. We solve financial and administrative issues, organise meetings, take care of the timely delivery of milestones and reports and much more.
More info >>

Industry Events

World Vaccine Congress Europe

18-21 October 2020, Barcelona, Spain

The World Vaccine Congress is an award-winning series of conferences and exhibitions that have grown to become the largest and most established vaccine meeting of its kind across the globe. Our credibility is show through the prestigious scientific advisory board that spend months of hard work creating a new and topical agenda, year on year.
More info >>



©2000-2011 Samedan Ltd.
Add to favourites

Print this page

Send to a friend
Privacy statement