Survey underscores need for more effective technology commercialization

Montreal, QC – Despite its key role in the development of the life science industry in Quebec, the province’s development model is at least partially to blame for the financing problems encountered by biotechnology companies.

This is the conclusion of a recent survey by BIOQuebec that analyzed the practices, conditions and results of commercializing university research in North America. The survey was conducted by Secor Consulting for BIOQuebec.

With this survey, BIOQuebec wished to verify the hypothesis that Quebec companies emerging as a result of university research are created prematurely, thereby giving rise to many ventures whose technological maturity is weak. The findings of the survey confirm this hypothesis, and partially explain the difficulties encountered by many biotechnology companies in finding investors who are interested in financing technology that is often in the very early stages of development compared to American companies.

Accordingly, nearly 80% of university research projects that are the subject of technology transfers towards the private sector in Quebec occur during the discovery phase or when validating the therapeutic target, compared to a ratio of less than 20% in the US. The American experience demonstrates that transfers of technology developed in a university, either by granting a licence or by creating spinoffs, occurs at a later date, that is to say during the preclinical and medicinal chemistry phase. American universities allocate an average of $9 million to each research project with marketing potential, while in Quebec, the corresponding figure is less than $3 million.

“Obviously, the absence of university financing for applied research has driven universities to encourage the creation of companies to finance technology development with private funding from venture capital companies," says Perry Niro, BIOQuebec’s chief executive officer. "Venture capital has thus been diverted to finance research, instead of being used to finance technology development.”

This situation has led to the creation of numerous companies, putting Quebec in third place in this category in North America. In Mr Niro’s view, “the positive result stemming from the practice of commercializing university research has been the creation of a biotechnology industry. However, the negative result has been the creation of a financially fragile industry with a less mature technology portfolio, in addition to having discouraged a certain number of investors, who were hoping to see the results of research being delivered much sooner.”

BIOQuebec says it recommends that between 2% and 5% of the disbursing funds in the health domain should be devoted to helping develop the technologies hatched in universities that hold promise for medium-term commercial development. Meanwhile, other kinds of public funding should be allocated to university research projects to spur technology innovations in accordance with research and development criteria used by the industry so as to maximize the chances of commercial success. Finally, any project that is the subject of a commercialization initiative should be supervised by teams and an organization that is intimately familiar with industry research practices and the market’s needs.