Ready for a spin-off? Patience is needed though...

Until recently, spin-offs were unusual at the Office of Technology Transfer (OTT). Two years ago, our office processed only two. This year, we witnessed eight of them, not without considerable involvement from OTT professionals, explains its director, Alex Navarre.

We still do not know whether this is a long-term trend or a mere reflection of several short-term circumstances. Other North American universities have also experienced such results, to the extent of measuring the number of spin-offs created as a means of comparing relative performance. On that score, be reassured that McGill rates as one of the most prolific universities, both in Canada and the U.S. However, the demand on OTT resources is not negligible and we have relied on a number of partners, whether incubators, private consultants or venture capitalists. As the following "proof in the pudding" exemplifies, the researcher is generally coming out of such deals with considerable long-term advantages.

A year ago, in the September 25, 1997 edition of the McGill Reporter, it was announced that an exclusive licence option agreement had been granted by McGill (via OTT) to a group led by T²C², to commercialize new technologies involving genes that influence the aging process. T²C²/Bio (Transfert Technologies Commercialization Capital) is a seed venture capital firm, one of two recently founded by the Société financière d'innovation (Sofinov) and the Business Development Bank of Canada (BDC). T²C²/Bio was created last year to provide seed capital for the identification, evaluation and commercialization of health science technologies primarily originating from universities and public and private research centres. T²C²/Bio has four investing partners: Sofinov, BDC, Innovatech du Grand Montréal and the Canadian Medical Discovery Fund. T²C²/Bio entered into an agreement with OTT, in concert with Dr. Siegfried Hekimi and his team. Mr. Robin Brassinga from OTT played a key role in encouraging the creation of a start up company and in facilitating its development. The technology had initially been developed with the support of NSERC and MRC grants.

The purpose of the option agreement with T²C²/Bio was to create a spin-off company to commercialize the technology. In order to allow investing partners to make their decisions with regard to investing in this opportunity, named Chronogen Inc., a business plan was written by T²C²/Bio in conjunction with Dr. Hekimi and with some OTT involvement. After many revisions, this business plan was made available to the sponsors in a presentation. OTT holds such presentations on a regular basis, involving sometimes a series of researchers offering potential opportunities to given investors.

After due diligence by the investing partners which entails a validation of the business proposal, the decision was made to implement the business plan. This is in fact the green light to further steps which include the drafting of the necessary agreements between partners. Such documents are legal in nature and OTT is accompanied in this step by legal counsel.

Included in this particular deal was the awarding of a substantial long-term research contract between Chronogen Inc. and McGill to pursue the development of this technology since the results, although promising, were still far from an absolute proof that the concept could be applied to humans. On September 4, 1998, the final documents were signed, giving all parties involved the necessary reassurances that their converging objectives would be met.

The founding scientist will head Chronogen's scientific advisory committee. McGill, T²C²/Bio and the researcher also received equity in Chronogen Inc., together with the investing partners of T²C²/Bio. The Chronogen experience has contributed to further developing a model of spin-offs that is also a source of future contracts for its founding scientist.

Chronogen is the first company T²C²/Bio has created since its inception more than a year ago. T²C²/Bio and other venture funds in the Montreal region, such as GeneChem Inc. and MedTech Partners, or Milestone Medica Corp. in Toronto, are thus closing the gap between early-stage biomedical technological opportunities and venture capital investments. We believe that such developments are in the best interest of researchers, their science, graduate students, McGill University and the economy in general. Thus OTT is a partner of choice in such developments and we would like to encourage any researcher with such promising technologies not to wait to discuss them with us.