MaRS ramping up technology deal flow with launch of new commercialization arm

$15 million in CECR funding

The MaRS Discovery District is set to launch the largest commercialization initiative of its kind in Canada for the pooling of intellectual property (IP) from 14 Toronto-based institutions and covering a wide range of largely life sciences-based technologies. Formally announced earlier this year, MaRS Innovation will screen technologies coming into and from its member institutions with the aim of licensing or creating start-ups.

Base funding for MaRS Innovation (MI) was secured with $15 million over five years through the inaugural competition of the Centres of Excellence for Commercialization and Research (CECR) program (R$, February 25/08). Federal support is augmented with $10 million in cash from participating institutions, with each member will contribute an amount proportional to their research activity.

"We will have a broad mandate. The U of T covers the waterfront (for technologies), Ryerson has physical sciences and engineering while the Ontario College of Art and Design brings visual arts and design. Then there's the 10 hospitals," says Dr Tony Redpath, MaRS' VP partner programs and a key driver behind MI.

A managing director will be selected this fall with responsibility for bringing 12-15 staff members on board, with operations commencing late this year or in early 2009. A board of directors is also being assembled consisting of four independent directors and 10 nominated by the membership.

"The desire for an organization like this had its roots in our members' organizations well before CECR was announced. They were already meeting on a regular basis through the Toronto Academic Health Sciences Network. The timing was right and the willingness was there," says Redpath. "It's an ambitious undertaking. Our goal is to become a global player (and) CECR funding is a tremendous way to launch the program."

builds on biodiscovery toronto model

Prior to applying to the CECR program, member institutions had started the process of pooling their IP in a single entity through BioDiscovery Toronto, an organization that is also a member of MI and has been involved in its planning since the original CECR application was written.

"MI represents a continuation and critical expansion of the biomedical sciences deal flow effort that BDT has been concentrating on since 2006," says Dr David Shindler, executive director of BioDiscovery Toronto. "Its scale is significant and begins to match the scale of the opportunities from Toronto's major internationally recognized research capacity in the biomedical sciences."

Redpath says MI goes beyond what technology transfer offices have typically done by funding development as well as IP protection. The selection process will involve an MI staff sitting down with his or her institutional counterpart and the researcher before due diligence is undertaken. Redpath says only a select few will be taken on as MI commercialization projects.

"We'll develop core strengths and pay for patent and marketing costs as well as costs associated with commercialization," says Redpath.

improve toronto's weak commercialization output

If MI proves successful in commercializing promising technologies, it could have an ancillary effect of eliminating the lingering perception that the MaRS operation is little more than a high-end real estate play. It could also counteract the Toronto region's relatively weak track record of commercialization in relation to the massive amount of research funding it receives. Part of the problem is the sheer number of players involved with nearly as many different IP policies. By pooling IP in one organization, that roadblock to attracting financing is largely removed.

"This is a classic example of the sort of role MaRS can play," says Redpath, who has been working closely with MaRS CEO Dr Ilse Treurnicht. "We had to show that it would be self-supporting at the end of five years. After that, the members are committed to funding this. They view it as more than a five-year program."

Revenues generated by the organization's activities will be shared among inventors, the institutions involved and MaRS Innovation.

MaRS Innovation is launching at a time of extreme financial difficulties for high-tech in general and start-ups in particular. The most recent financial shock south of the border has had a global impact, compelling venture capital and other sources of financing to become even more risk averse.

Another MaRS initiative – the financing of Aggregate Therapeutics – is still attempting to secure backing 18 months after the search began (R$, April 24/07). Aggregate Therapeutics was started by the Stem Cell Network of Centres of Excellence as a for-profit vehicle to bundle stem cell research across Canada. It was handed off to MaRS which made it a resident company and is seeking financial backing for its new commercialization model.

"We're still on the fundraising trail. It's been a very tough struggle," says Dr John McCulloch, Aggregate's CEO and a senior advisor to the MaR' venture group. "This is an early-stage life sciences company and everyone in this space is in the same boat."

Nonetheless, Redpath says this MaRS Innovation stands a better chance than Aggregate in finding money for new start-ups due to the high level of expertise it hopes to attract to the organization and its varied portfolio.

"Aggregate's challenge is that it's fed by a specialized pipeline of activities which have a long time horizon and are hard to fund," he says. "We will have a wide range of activities and the luxury of a portfolio approach. We may have software from Ryerson that takes six months to commercialize or it could be IP from Sick Kids and take 10 years."

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