1. IP Strategies, Humanitarian Contract Clauses & Business Models to Address Unmet Needs July 31, 2010 Open Society Symposium Carol Mimura, Ph.D. Assistant Vice Chancellor, IPIRA University of California, Berkeley http://ipira.berkeley.edu

3. 1.3% of the growth in CA Gross St. Product* is due to productivity gains resulting from the research activities of the University of CA

4. >$5B in federal funding (10 campuses)

5. 4 invention disclosures per calendar dayAs a research university we have aduty to ensure that basic research that has a practical application is transmitted and deployed to benefit society *2003 data from California’s Future: It Starts Here (2004) IBF consulting group

6. Tremendous Needs, Tremendous Disparities JP greatest life exp. 81 World population of 6.5 Billion Botswana lowest 35 ~1B in wealthiest World life expectancy: 65 2.4B live in low income countries Italy 20% age 65+*, In Haiti 4%* 3.1B in middle income *Population Reference Bureau

7. Socially Responsible Licensing Program, SRLP IP management strategy Special attention to DC unmet needs -Neglected disease conditions -Neglected populations Contract clauses: access & affordability Good stewardship of IP rights

8. 9 Points to Consider in University LicensingPoint 9:“Consider inclusion of provisions in contracts that address unmet needs, such as those of neglected patient populations or geographic areas, giving particular attention to improved therapeutics, diagnostics, and agricultural technologies for the developing world”Aspirational: working out clauses, seeking solutions, experimenting

9. SRLP Examples at Berkeley Diagnostics- portable, hand-held • Dengue (Sustainable Sciences Institute) • HIV (P-o-C early) (Silicon Biodevices ) Therapeutics • Malaria ACTs, (iOWH, Amyris Biotechnologies, sanofi-aventis) • anti-viral (Samoa) • TB (CA biotechnology company) • oncology (pharma) Vaccines • STD (pharma)

10. SRLP Examples at Berkeley - continued Agricultural Biotechnology • Plant disease resistance (Two Blades) pesticide-free crops • Super sorghum (Africa Harvest) Public Health • sanitation, water purity (Aquaya Inst.) Consumer Electronics& information technology (Nokia)

11. University Research Results are Far from Being a Commercial Product Commercial investment by others is required to bring basic research results to the point of practical application Technology transfer: the road to commercializaton of university IP is typically a series of separate steps Often involving multiple parties Translation Deployment Development Discovery >10 years, >$1B

12. Health Innovation Requires Many Actors, Many Inputs The Translational Research Gap is Both Wide and Deep Bench to bedside Bench to clinic Licensees invest enormous sums in risky R&D, manufacturing, regulatory approvals For profit market, For profit licensees Bottom line: IP licensing gives industry an incentive to invest

13. Low Cost Artemisinin Combination Therapy $42.6M Bill & Melinda Gates Foundation 3-way collaboration agreement + 2 license agreements $22.6M to iOWH Pharma (sanofi-aventis) $12M to Amyris Biotechnologies MFG,REGULATORY, DISTRIBUTION APPLIED RESEARCH $8M to Berkeley BASIC RESEARCH License #1 Berkeley to Amyris. Developed world. All FOUs. No profit for malaria drug. Profit for flavors & fragrances License #2 Berkeley to iOWH. Malaria FOU. Developing World. Sell drug at cost 3- way research Collaboration Agreement

14. The Fundamental Problem For neglected disease, neglected populations Tension, balance • profit motive, market forces (incl. price elast., related supply & demand) • societal needsthat are not market driven SRLP “access & afford” • Price -market economy factor • Contracts - non-market economy needs Commercial Incentives Social Welfare

15. Finding the Exquisite Balance IP licensing is but one aspect SRLP challenge Retain commercial incentives Outside of “market economy” countries Commercial Incentives Social Welfare Access Affordability Profit Shareholders

16. “Bento Box” SolutionHumanitarian clauses + IP Strategies + Business Models Contract Levers IP strategy Business Model A 1 X B 2 Y C 3 Z

17. Permutations, Combinations (mix, match to create incentives, alignment) No particular order, no associations horizontally

18. University SRLPs only ONE part of a multi-part solution Deployment, Commercialization Development,Translation Discovery, Innovation Diminishing Role University Contracts: License, Research, Collaboration Agreements, Foundation Awards

20. DC manufacturing, trade relationships

21. Public policy & international policy

22. International law & treaties

23. Poverty, sanitation, environmentDeployment, Commercialization Development,Translation Discovery, Innovation University Contracts Downstream solutions by others are necessary Diminishing Role

24. University is one contributor among many Academia, Research Institutes International Relief Agencies Government Int’l Health Organizations International Financial Institutions Foundations Industry NGOs

25. LESSONS LEARNED:One Size Does Not Fit All Must preserve incentives Must preserve Options • Filing outside of US, JP, EPO, CA, AU - in-country presence - long term view • Not obtaining IP rights - commons can destroy traits - invent around • Compulsory licensing - last resort No dismantling of the system, just adjustments

26. SRLP: Patterns, Models Traditional, linear (handoff) A B University Corporate Licensee Federal funding deployment regulatory VALUE R&D licensing IP rights Discovery

27. SRLP: Patterns, Models Traditional, linear handoff Push me - Pull you A B University Corporate Licensee Federal funding Discovery, IP rights, licensing, R&D, clinical, regulatory, commercialization

28. Traditional, Linear License Value Proposition Poor, Push Me - Pull You No profit incentive DCs Royalty free in EDCs - Provide at cost or free Royalty bearing Third party challenge Enforcement B A Hand-Off University Corporate Licensee Federal funding Expensive R&D Regulatory risks Discovery R&D Clinical Regulatory Deploy $1B and 12+ years Risk Reward

29. License + Research Collaboration: Partnering Non linear Overlapping & loopbacks Value Proposition better Compressed timeline Shared funding Gap funding Shared tools, expertise, data Lower risk, more mature Feedback: adjustments Scale -up considerations Proprietary components A B University Corporate Licensee Shared funding Tools, data Expensive R&D Regulatory risks Discovery, Translation, Commercialization Risk Reward R:R balance better. Both parties perform in parallel, not just in sequence, innovation acceleration, extend Univ. role further into value chain Goal alignment: translational research, improvements

30. Partnering: PDPs Play a Central Role Product Development Partnerships (PDPs) nonprofits, funded by foundations, others Partner up & down the value chain & leverage mutual resources, capabilities, Operate in crucial, middle area; Add value, decrease risk, increase uptake under SRL terms A to C unlikely (too risky); B to C likely (nonprofits have de-risked) Commer. uptake Special terms A C B Discovery Development Translation deployment VALUE regulatory R&D Clinical licensing IP rights Research

31. Multiple Licensees: NonProfit, ForProfit & Hybrid Still no profit incentive DCs for both Value proposition good Different incentives For-profit Profit goal Dual commercialization plan Dual market (short term, nonprofit) Corporate Social Responsibility Bootstrap philanthropy Non-profit: Funding from Charitable orgs Shared grants Charitable aims as goal for NP Partnering Ultimate Goal: DERISK for FOR PROFIT sublicensee C A Licensee is ForProfit LT Developed world FOU is market driven (+humanitarian) University Licensee is NonProfit LT is Dev Countries FOU is humanitarian B Reward Risk Expensive R&D Regulatory risks Long term prospects

32. For Each Scenario Align Goals,Incentives for Each Participant Must be able to answer What’s in it for Me? (“WIIFM”) For each party to: Invest in rare, neglected, tropical disease Sell, distribute at cost Invest in DC manufacturing Improve DC health delivery systems Prepare next generation of SR global citizens A+B+C (A+B)+D A+C B+C (C+D) A later Joint Venture Strategic Alliance PPP, PDP Acquisition

33. “WIIFM” for Industry More than ever before! FDA priority review voucher ($50M - $300M)* Assistance in navigating drug regulatory systems in NG-endemic countries In-country market presence (will scale, create customers) Social ROI - goodwill Employee retention, satisfaction Partnering opportunities (pipelines from PDPs and PPPs) *Food, Drug and Cosmetic Act section 524, 21 U.S.C. Section 360n (2008)

34. WIIFM: Universities, Research Institutes Fulfill social mission, achieve societal impact, global scale Align moral imperative to help with University mission Teaching, research, public service TT and IP management for public benefit Prepare the next generation Diversify funding sources - government, foundations, FPs, NPs, PDPs - traverse valley of death Collaborations, involvement further into the translational research space (accelerate innovation) Influence public policy, research paradigms address grand challenges & industry-university relations Reputational gains, gifts, goodwill, donations

35. WIIFM for Government Global linkages G. Health linked to poverty Obama Global Health Initiative U.N. Millennium Development Goals Global economic development goals inextricably linked to global: health, food security, energy risks, the environmental, political stability Investments create markets, wealth, goodwill

36. Resources:Socially Responsible Licensing at BerkeleyHumanitarian Use Clauses in Contracts http://ipira.berkeley.edu then “Socially Responsible IP management”