A new Scottish institute will play matchmaker with interesting biotech projects and market demands on a global level.
Scottish Enterprise, a governmental economic development agency in Glasgow, held on June 24 in Dundee the first meeting of a new institute that was created to identify market trends in the life sciences sector and fund the development of early-stage biotech projects until they attract private capital. The long-term goal of the innovative new Intermediary Technology Institute (ITI) Life Sciences is to create a globally competitive biotech sector in Scotland.
In September 2003, Scottish Enterprise committed £450 ($820) million over the next ten years to be divided equally among three ITIs in the areas of life sciences, energy, and communications technology and digital media. The ITI funding could complement Scottish Enterprise's Proof of Concept fund, which doles out awards of about £200,000 ($370,000) to biotech projects at universities and research institutes1, by picking up research where this fund leaves off.
The ITI model consists of four elements: market forecasting, technology analysis, due diligence and fund allocation. Global market intelligence is gathered from a range of sources and filtered to identify early-stage technologies that have a potential for development (see Figure 1). Based on this 'foresighting' process, the ITI will fund research projects in a university or a company in Scotland, in hopes of eventually attracting interest from the private sector, particularly from venture capitalists.
The foresighting process "may sound linear, but it's not," explains John Chiplin, CEO of the ITI Life Sciences. "These [four elements] all work in parallel and a phrase we use a lot is 'begin with the end in mind.'" In other words, the ITI will think about commercializing a product when they first evaluate a technology. The ITI model is unusual—and possibly unique—in its structure, which goes far beyond, for example, the scope of university technology transfer offices.
“The ITI model is unusual—and possibly unique—in its structure, going far beyond, for example, the scope of university technology transfer offices.”
Careful management of intellectual property (IP) issues throughout the foresight process will be key to the ITI's success. Due diligence, or assessing the risk surrounding the validity and ownership of patented inventions, is currently being carried out on ten different research projects that are potentially fundable, including some that focus on Scotland's research strengths: stem cells, protein kinases and bioinformatics. "We are looking to see if a robust business case can be made for some of these technologies," says Chiplin, adding: "If we can't check that box, we'll move on." A few projects are expected to receive funding based upon this foresighting exercise in the next 3 months. The funds will be doled out to Scottish companies and universities that are best qualified to continue the research.
The ITI is a global venture with membership open to any organization in the world. But the final output, in terms of IP creation or research collaborations, must clearly benefit the Scottish life sciences industry. Membership fees are set deliberately low, at £400 ($745) per year, which should be attractive to the more than 500 small and medium Scottish firms that gravitate around the biotech sector and the roughly ten universities that conduct biotech research in Scotland. In return, members get access to foresighting information and a chance to influence the ITI's agenda.
It is still early days for the ITI, and people within Scotland's biotech community are waiting to see how it will perform. "I think if it's set up properly with good people and run well, then the scheme might make quite a difference to the Scottish biotech scene," says Alexander Lewis, a consultant at Wood Mackenzie in Edinburgh. He adds that the ITI could bring together the many disparate interests of Scottish Enterprise, which has not yet been done in Scotland, as well as identify existing Scottish expertise that can fill gaps in the international markets.
“Any new funding like this is welcome and could have a significant impact on some early stage projects,” comments Alan Muir, director of Seven Hills Venture Partners, a company in Edinburgh that specializes in financing and advising early-stage life science companies. But, “People will have to be patient and not look for short-term gains from the ITI,” he warns. “And the [ITI] team must be strong enough not to be tempted down this road. This has to be about setting the agenda for the industry in the long term.”
ITI Life Sciences
Seven Hills Venture Partners
Mitchell, P. Scotland's biotechnology industry growth outpaces the European average. Bioentrepreneur 01 May 2003, DOI:10.1038/bioent730.