An asset can be valued, invested in, sold and licensed. An idea cannot.
The UK is renowned as one of the most inventive countries in the world, yet it has long been argued that we do not do enough to support our inventors or help them commercialise their concepts.
In my experience it is a lack of knowledge about how to exploit the commercial potential of an idea, rather than the strength of an idea itself, that holds its development back.
Many companies will develop excellent ideas and innovations but will not take steps to commercialise them due to a lack of business skills, financial resources, market knowledge and ultimately time.
Essentially, commercialising IP is the process undertaken to move innovation from “just another brilliant idea for a product or service” to the market place.
Most small- and medium-sized businesses are simply not set up for both the research and development of new products and their commercialisation. Instead, most are typically geared towards either the generation and development of new intellectual property or the manufacture, sale and delivery of it.
All too often companies get stuck in an ‘only invented here’ syndrome, internalising the development and marketing of innovations to defend the market position of their ideas.
However, to turn IP into a commercial asset for your company you must look beyond the confines of your own business and explore potential marketing and partnership opportunities with other parties.
Just what the doctor ordered – how companies can learn from the pharmaceutical sector The pharmaceutical and biotech sectors are areas that tend to be particularly strong on partnering and licensing intellectual property, as it’s unlikely that a new company will manufacture its own drugs.
Licensing your IP to another party can be an effective way of exploiting IP, particularly if you don’t have the resources or experience to develop and market your product or service.
Often companies are not aware of the opportunities for collaborative development that are available to them and will look to license their product or idea for someone else to develop at a very early stage.
This regularly means that they will miss out on the full commercial rewards of their ideas.
The key to creating profit within the biotech and pharmaceutical sectors is knowing how far to invest in the proof of the concept before licensing or engaging partners. It’s a balance of risks and rewards and one that is faced by companies across all business sectors.
One of our companies at the Sussex Innovation Centre, Destiny Pharma, is an example of a ‘virtual pharma company’ that is using partnerships to create commercial value for their IP. The company has developed a light-activated cure for hospital superbug MRSA. Its patented XF compounds are about to enter phase II clinical development.
Destiny Pharma focuses on the generation, patenting, financing and licensing of intellectual property. The company is staffed by a highly specialist and professional team, but through its use of a global network of partners, it avoids paying for acres of shiny labs.
Destiny Pharma produces useful science, rather than clever science, and by forging virtual partnerships with doctors and scientists from around the world they are able to punch above their weight and compete with the pharmaceutical conglomerates that dominate the industry.
This has led to financial success for the company with over £7.5million in funding being secured to develop its XF drugs and shows how leveraging external knowledge bases can yield spectacular results.
We’re now also seeing big business increasingly recognising the importance of using outside ideas, developed and fine-tuned by others to fuel new product lines.
Proctor and Gamble recently introduced an initiative called ‘Connect & Develop’ to emphasise that not all innovations need to come from within an organisation. In fact the company expects that 50% of its future products will come from outside its own research and development over the next five years.
So, whilst a strong culture of specialist grants, support, finance programmes and corporate investment means that pharmaceutical and biotech firms are certainly in a better position when it comes to developing their IP, by following their lead and exploring external licensing and partnership opportunities SMEs from all sectors can take greater steps to commercialise their concepts.
© Crimson Business Ltd. 2006