{"id":359477,"date":"2010-02-24T14:10:45","date_gmt":"2010-02-24T19:10:45","guid":{"rendered":"http:\/\/www.technologytransfertactics.com\/content\/?p=5972"},"modified":"2010-02-24T14:10:45","modified_gmt":"2010-02-24T19:10:45","slug":"a-penny-for-your-thoughts-%e2%80%93-how-much-value-does-an-idea-have-today","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/359477","title":{"rendered":"A penny for your thoughts \u2013 how much value does an idea have today?"},"content":{"rendered":"

Writing on the ATPBlog<\/a>, ATPBio principal David Grainger, PhD, director of Graingerlab — an inflammation research and therapy lab in the department of medicine at Cambridge University — and senior partner at the life sciences boutique investment group Total Medical Ventures, recalls meeting in the mid-1990s with a VC partner who said that “a good idea is worth a million.” He meant that backing a good idea with a million dollars to see whether it had potential was a good bet, Grainger explains. Nevertheless, the comment “suggested that, in the 1990s, a good idea was worth something,” he says. Today, a good idea — without considerable commercial work-up and proof-of-principle data — “is worth so close to nothing that it isn’t worth arguing about the few cents,” Grainger maintains. “Even a well-considered plan, and an array of impressive supporting data, is worth little.”<\/p>\n

What changed? The most obvious is the simple law of supply and demand, according to Grainger. A decade ago, most universities had not bought into the idea of attempting to monetize early stage IP. When a few groundbreaking academics in the U.S. and Europe broke the mold, university discoveries like restriction enzymes, gene cloning, and polymerase chain reaction were catapulted into commercial success through the formation of spinout companies. “Initially, these highly visible successes drove a bubble in the market for ideas: every technology investor wanted a piece of ideas like this, yet the number of commerce-savvy academics was tiny,” he writes. “Voracious demand and limited supply lay the foundations for the \u2018good idea is worth a million’ concept.” As prices climbed and the number of attractive deals multiplied, every institution geared up to exploit its pot of gold.<\/p>\n

It didn’t take long for a tipping point to occur. The dot-com bust starved technology investing of capital just as the tech transfer supply pipes were turned on to full volume, Grainger says. “Ideas came pouring out of institutions — revered and mediocre alike — and the result was predictable: prices crashed.” But unlike other bubble markets, the bubble market in ideas was less visible, he adds. Often, the details of these transactions were not released publicly. Worse still, licenses and acquisitions often were financed using fiendishly complex agreements with royalties, milestones, and other delayed considerations that made it almost impossible to assess the sale value. As a result, university tech transfer professionals were just as slow to recognize the crash that had occurred as they had previously been to see the potential in selling academic IP. Because TTOs are relatively “non-selective,” the average quality of available IP also declined rapidly, Grainger maintains. Thus, prospective buyers had the nearly impossible task of wading through knee-deep piles of “one-page teasers” to find the one idea in 10,000 that might actually have commercial value. Almost all such investors have withdrawn from the market altogether, leaving university TTOs “lined up like desperate men at a singles party almost entirely lacking in girls,” Grainger writes.<\/p>\n

The take-home messages? Tech transfer professionals must be more selective about the ideas they take on and promote, he suggests. Institutions also should change their success metrics to focus on the number of deals done with genuine third parties rather than the number of technologies discovered. To do that, TTOs need better access to expert assessors. “Even if the tech transfer professional asks the inventor for help finding an external assessor (and most don’t even ask), any names they get will be colleagues who think the same way as the inventor,” Grainger writes. “Worse still, almost all inventors and many tech transfer professionals think from the technology solution towards a product, rather than from a product need to a technology solution. The lack of rigorous external assessment and a technophile tendency lead to over-optimism about the value of the idea.”<\/p>\n

The solution lies in more rigorous assessment of early stage ideas, Grainger maintains. “The lack of definitive data does not preclude a proper assessment of the potential for an idea to make money,” he writes. “The market risk is amenable to conventional assessment even before the first experiment has been designed.” Why will anybody buy this product? How many will they buy? And at what price? If the concept passes muster on the market test, it’s still possible to make a worthwhile guess at the technical risk posed by the development path between idea and product, he asserts.<\/p>\n

“Success in the next decade will follow the most selective technology owners – or rather those who are able to make the best selections at the lowest cost,” Grainger comments. “The market for unqualified ideas and opportunities will rightly remain rock-bottom. The challenge for all owners of early stage assets is to properly qualify their offerings so that quality rather than quantity becomes the benchmark. Then, once again, there will be realizable value in invention.”<\/p>\n

Source: pharmaphorum<\/a><\/p>\n


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Writing on the ATPBlog, ATPBio principal David Grainger, PhD, director of Graingerlab — an inflammation research and therapy lab in the department of medicine at Cambridge University — and senior partner at the life sciences boutique investment group Total Medical Ventures, recalls meeting in the mid-1990s with a VC partner who said that “a good […]<\/p>\n","protected":false},"author":67,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-359477","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/359477","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/67"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=359477"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/359477\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=359477"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=359477"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=359477"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}