What Is Technology Transfer?
Is
the process by which technology, knowledge, or information (Intellectual
Property or IP) developed in one organization, in one area, or for one
purpose is applied or used in another organization, or area, or for
another purpose. Broadly speaking, it is the process by which an IP
gets converted into a product or service that the end user accepts and
uses. This IP could be in any phase of its product commercialization
cycle, i. e. a) the elementary or "embryonic" phase, product
development phase, and well advanced, "near market" and ready
for exploitation phase.
The Ten Commandments of Technology Transfer
1. Establish realistic,
clear and concise objectives, anticipated benefits and project plan with
associated resources. Begin by writing a clear and concise SOP of your
new drug.
2. Gain senior
management's approval and committed support throughout the technology
transfer process. Thereafter, keep them engaged until the successful
commercialization of your product by having all communication channels
open.
3. Establish a
"win-win" relationship with all your internal customers, i. e.
Senior management, Marketing, Research, Engineering, Legal, Corporate
Finance, Manufacturing, and external customers, i. e. end user of
the product, patient, primary and secondary decision makers in purchasing
your new product, suppliers, vendors, contract manufacturers.
Be open, direct,
innovative and creative with all forms of your communication.
Don't allow
adversarial relationships to develop between the partners of your
technology transfer formulation.
When in New York,
learn to conduct business as a New Yorker.
4. Engage the FDA
and other regulatory agencies early on, deal with them
"straight" and keep them involved until your project
succeeds.
Set-up a "mock
jury" to review your drug application just before submitting.
Make your drug
application clear, concise and user friendly.
5. Protect your
intellectual property with well written legal agreements and by avoiding
inadvertent disclosure. When in doubt, consult with your legal experts.
6. Conduct pilot
and other scientific studies utilizing experimental design and other
statistical tools, and correctly interpret the generated data.
Investigate all abnormalities.
Quote from unknown
Clinical Director: "I don't do windows, doors or uncontrolled
studies."
7. Write and report
facts faithfully and fully following the 5C's of a flawless diamond -
cut, clarity, clear, carat.
Develop concise and
compact protocols and reports.
Check and certify
everything enthusiastically: Audit, review, sign and date all
documents.
8. Form a
technology transfer team having a blend of experiences and expertise,
then empower them with the responsibility to make your new product
project a commercialization success.
Identify the
decisions, actions, outputs and deliverables that each team would be
responsible for.
Identify the
training, facilitation, coaching and assessment that each team would
receive.
Identify the
support the team leaders, coordinators and managers will receive to let
and help them perform their functions successfully.
Combine all
resources and/or capabilities for the ultimate success of the project.
Agree on thresholds
for market size, pricing, and product placement.
Arrange transition
through organizational units of similar scope and scale.
Understand and hopefully
share perceptions and assessments of risk.
Agree on priorities
and levels of commitment.
Remember that
showing cannot be done with words, alone; it requires action (seeing,
touching, smelling, tasting or measuring). "Don't tell me what
you have done. Show me!"
Famous Quotations:
People who work together will win. Vince Lombardi,
1964
A long pull, a strong pull, and a pull all
together. Charles Dickens, 1849
All for one, one for all, that is our motto. The
Three Musketeers, 1844
Nothing great was ever achieved without
enthusiasm. Ralph Waldo Emerson, 1841
9. Monitor, manage
and control your project's progress by "on site", hands-on
visits at the manufacturing lab, customers, etc. and electronic means as
well as brief but frequent project status presentations.
Document both
triumphs and mistakes made in parallel with the completion of each
project phase.
Bring-in early and
educate thoroughly the team that will pick-up and continue work on the
project after you. Then, stay in touch until the new team feels totally
comfortable to move on independently.
Address perceived
risks arising from market and business uncertainties. Include risks'
appraisal to all product development and commercialization investment
decisions.
10. Constantly
re-evaluate the business and technical merits of the new project as
external and/or internal conditions change.
Justify investment
in technology development only on the basis of market data. Engineering
success, field tests, and technology demonstrations can only produce
commercial development after filtering through screens of market analysis
and calculations of return on investment. Prospects for direct technology
transfer significantly improve when market information gets supplemented
with technical data.
Do not be afraid to
pull the plug if and/or when the project proves itself to be
"dead." Document user needs, market size, vital industry
data (market-specific purchasing decision criteria), major points of
product differentiation tied to industry's vital points, pricing
strategy, analysis of best practices and trend forecasts, identification
of market barriers, analysis of competition and substitution options.
What is Due diligence?
Due
diligence is a process to gain and verify needed information relative to
a possible acquisition or merger. Each of these analyses get customized
to the needs of the particular deal to increase understanding, ensure
that the business operates as projected and to look for hidden
problems.
Due diligence is
also a process of obtaining sufficiently reliable information about a
business entity to help uncover any fact, circumstance or set of
conditions that would have a reasonable likelihood of influencing our
client’s offer or decision to acquire the business.
Generally, issues
relating to financial statements, personnel, processes and procedures,
products and services, customers, suppliers, government compliance,
legal, competition and the industry are addressed.
The internally
generated information obtained during the due diligence process will help our client:
- Verify seller
representations.
- Assist in the
determination of value (assets and liabilities.)
- Uncover problems,
issues and concerns (current and future.)
- Gain a better
understanding of the business, industry, key customers, trends and
regulatory requirements.
- Evaluate management and
key employees.
Externally
generated information will focus on:
- Public information
regarding the company, its principals and key employees.
- Key customers.
- Market research to gain
a better understanding of the dynamics of the marketplace.
Successful
completion of this type of project requires attention to the following:
- Be aware of how the
nature of the information impacts its reliability and/or compares to
benchmarking standards
- internal vs. external
- how and from who it is
obtained
- is it independently
verifiable
- Be on the lookout for
inconsistencies in verbal representations or information that are
either individually or cumulatively material.
- Ask open ended
questions. Rather than asking for the confirmation of a fact, ask a
question that leads you to the same answer.
- Remember that in many
instances past behavior can be a good predictor of future
performance. This can be crucial in evaluating management’s and
employee’s values, practices and performance.
Caution: Due diligence may not and
probably will not uncover fraud or a conspiracy to commit fraud. We
recommend that our client always has the seller sign a representation
letter prior to closing the deal ( POSITIVE - confirming all the
representations the seller has made ; NEGATIVE - no known facts or
circumstances that would affect your decision to buy the company under
the terms and conditions agreed upon.)
.
Our Due Diligence Template
We
utilize a methodology template which evaluates a company according to
desirable client criteria. We formulate and implement a tailor-made due
diligence plan, when we have clearly understood your current project
needs. These
criteria might include the following:
- Twenty two pre-visit,
screening criteria.
- Fifteen check points
related to safety and environmental management controls.
- Twenty four check
points related to intellectual property, technology, operational
performance, quality and profitability.
What is Valuation?
Valuation
is the method for establishing the overall value of either an existing
business or new intellectual property (IP.)
Technology and Business Assessment for Established
Business
.
Upon conclusion of a
technology and business assessment project our client receives a report
containing the following:
- Strength of specific
product technology versus the unmet needs of the customer.
- Size of business
opportunity as compared to current and future competitors.
- Product's ability to
satisfy government, FDA and/or other regulatory issues.
- Manufacturing and
market penetration strategies.
- Reliance on patents and
protection of proprietary technology.
- Depth of in-house
technical expertise and strength of management team.
- Company's track record
from start-up date to date in achieving its originally defined
project objectives.
Technology and Business Assessment of New
Intellectual Property
Our
typical report includes:
- Scientific merit of the
invented technology.
- List of possible,
technical obstacles which would need to be overcome for
successful product development, manufacture and
commercialization.
- Relative strength of
the invention as compared to other patented technologies.
- Potential applications
of the subject technology.
- Estimated size of the
various market segments, environmental and regulatory trends (if
any), major players, etc.
- Overall assessment of
the invention's technical and business merit.
How do I evaluate the value of the technologies I
have?
We normally
complete two technical and business feasibility studies for every
promising Intellectual Property (IP.)
The first study is
exploratory yet complete enough to tell us if the subject IP warrants
further investigation and allocation of resources.
If the IP passes
the first test, then we determine what requirements does the IP needs to
satisfy and by when in order to take another, more thorough look at its
technical and business merit.
Upon successful
completion of these two hurdles, the subject IP is considered worthy of
its own business plan for development, manufacture and/or
commercialization.
In our experience,
a majority of IPs would never pass this phase if they were to be
evaluated correctly, thereby wasting valuable, scarce resources that
could have been better applied to the truly worthy IPs.
We have developed a
number of proprietary templates which minimize such pitfalls and
significantly increase one's likelihood to evaluate correctly the merit
of an IP.
How do I find a prospective market?
This
question is partly addressed above. That is, successful completion of
Phase One will include the identification and evaluation of the potential
market opportunities, present market entrants and their relative strengths/weaknesses,
unmet customer needs, environmental and other regulatory trends, etc. It
is a clear, objective road map.
Once you know who
the key players are, then it is much easier to approach them.
A very important
element in this first phase is to be creative, innovative and practical.
It is like trying to figure out if your three (3) month old baby is more
suitable to be an engineer, artist or priest. This activity requires
experience and other innate skills.
Should I find an "agent" to help me find
buyers?
Once
you know the relative value of your IP, then you must determine if you
have in-house the required resources for commercializing the subject IP.
In today's fast
changing business environment, it is probably to your advantage to get
the assistance of an expert to help you instead of trying to follow the
"Amish" concept of learning and doing everything by yourself.
That is, time is probably much more valuable than the cost (a worthy
investment in my opinion) incurred to hire an expert.
It is very
important to team-up with an agent using the "Win-Win"
principle. The basic question needs to be: "What's in for all of
us?" NOT only "What's in for me?"
You must find an agent who a) is qualified,
b) clearly believes in the value of the IP (you will never sell anything
that you do not believe in it), c) knows that they will be 'fairly"
compensated if and/or when the IP becomes commercialized, etc. and d) is
capable to contribute in improving, fine-tuning and fortifying your IP
and respective products (this requirement is rather rare to find but you
should always try.) That is, always look for an individual or company who
are a product designer, development engineer, marketer, and salesperson
not just a salesperson. I know that is a tall order but that is what is
required.
How do I approach a prospective buyer?
There
many innovative and practical ways. However, once you identify an
interested party, you must provide them with the "right stuff"
or you just closed the door (at least for a while) with said company.
The right stuff
includes the professional development of a promo package which provides a
prospective party with easy to understand, clear and compelling evidence
of the merit of said IP and why they should seriously consider it. If it
is possible, have available working, functional prototype products for
evaluation.
This activity could
be the "kiss of death" of the IP if it is not done correctly.
Again, we have developed proprietary templates for developing said promo
package. It might sound very logical and simple, yet time and time again
we find that people fail to execute it properly.
Should I "tailor" my technology for a
potential buyer?
Yes.
Your promotional package must be tailored first to a specific market
segment and then further custom-tailored to the needs of a specific
prospect. It is very similar to the development of a resume or CV.
How do I go about negotiating the terms of the
contract?
Successful
negotiation is both a science and art. The more you know about the
prospective party's needs, desires, business objectives, etc., etc. the
better you are going to be. Also, you must have a very clear picture of
your own expectations, bottom line requirements, etc., etc. We highly
recommend that said negotiations are left on the hands of experts
otherwise you risk killing any potential deal and/or leaving millions of
dollars on the table.
What are some of the licensing pitfalls of yet
uncommercialized IP?
- Many people are
unwilling to share with others who have the ability to help them
maximize the value of their IP by licensing and/or commercializing
it. They want everything for themselves. That is foolish because at
the moment they own 100% of nothing whereas if the IP where to be
managed by the right people, then it could be worth many
millions.
- People try too quickly
to sell/license the IP without completing correctly the technical
and business feasibility (Phase One.) So, they do not know what they
have in the bag.
- Poor promotional
package for licensing the IP.
- Not engaging qualified
experts when it is absolutely a must to do so.
- Having unrealistic
royalty expectations, thereby not knowing when to say
"Yes" to an offer.
What is the "right" Royalty Rate for my
new technology, product?
Unless
you have the required competence, we recommend that you hire an expert who could
help you with the following:
- Establish,
quantitatively or semi-quantitatively, how well your technology fits
into the prospective company's strategic plan. This requires
complete understanding of current market size and its trend,
competitive situation, environmental and regulatory trends, the
strength of your patented (?) technology or other barrier to entry,
the prospective company's return on investment (ROI.)
- Establish the relative
ease for transforming your technology into a manufacturable product.
- Establish the
customer's acceptance of your new product. Be careful if it requires
major user re-educating or is quite a bit ahead of its time.
- Remember that royalty
rates will be significantly higher if your technology is in the
pharmaceuticals, biotech markets and much lower if it is aimed at
highly cost competitive markets (mass production businesses with
practically no entry barriers.)
- Recognize that today
the life cycle of every product has been severely compressed,
especially in hot, highly competitive markets.
- You should have as goal
to receive a royalty rate in the one to five percent (1 to 5) %
range of annual sales. That is our experience, but every situation
is different.
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