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NEWS UPDATE 23rd August 2004

Wholly-owned subsidiary of SVUK (Holdings) Ltd, the Glasgow-based BMV Management Limited (formally Science Ventures Ltd) ceased effective trading on 9th August 2004. The company was the exclusive provider of consultancy services to the UK University IPR-commercialisation Sector.

During what has been challenging times for all companies within the technology market, the Glasgow consultancy business did not manage to scale to critical mass. For reasons perhaps best known to only economists and sociologists, Glasgow enjoys the unenviable number-one title for the lowest business start-up rate in the UK, combined with the highest level of failure-rate for those that do start.
Despite the creative attempts of its Operations Director and Company Secretary, Mr Gordon Macmillan and his Head of Life-Sciences subordinate, Mr Elwood Vogt to win consultancy business, this did not in the end offer a viable way forward.

The company would like to take this opportunity to thank the University of Glasgow for its support as anchor client - and in particular to Sir Professor Graeme Davies who shared the vision for the external-support model. The company would also like to thank its Professional Service Firms and the other Suppliers. In particular for their great flexibility and patience in joining forces in a collaborative bid to see a locally based Science Ventures operator help position Glasgow as a City of world leading profile in the areas of IPR-commercialisation and Technology Transfer activity.

SVUK (Holdings) Ltd and its Management Team would like to thank the BMV Management Limited Board for its efforts in this regard.

Science experiment that paid off

Marcus Gibson, Financial Times Thursday September 14 2000

Nowhere has the rise in academic enterprise been faster than at Glasgow University, an institution with a good research record now earning a handsome deal from innovation. Three years ago it owned intellectual property wroth less than £300,000. Today that figure is £100m.
In August 1997, Prof Sir Graeme Davies, the vice-chancellor, backed a research and enterprise unit dedicated to winning the best deals from business for its technologies. More than £5m was budgeted over three years to create the biggest university enterprise unit in Europe.

Billy Harkin, its strategic business development manager, a tough Donegal-born businessman, arrived in January 1998. He found that no one knew the state of the university's intellectual property portfolio, and many research contracts were loss making. Mr Harkin identified photonics, optical networking, as the hidden commercial jewel in Glasgow's skills base - even though 65 percent of research is in bio-medicine.
Soon after his arrival, a promising start-up, optical chip maker Kymata, needed to license the university's flame hydrolysis deposition technology to process its semiconductor wafers speedily. In one of the most lucrative technology transfer contracts in Europe, Mr Harkin demanded better terms from Kymata and its backers, including a bigger equity stake and royalties.
The group protested but Mr Harkin, backed by the university's management, held firm. The university now owns not only a handsome stake in company worth around £250m, but more unusually, royalty payments on future product sales.
3i, Kymata's main investor, has had its original £1m stake in the Livingston-based company - still the fastest growth technology company in Scotland - increase in value 60-fold.
Kevin Lyon, 3i Scotland's director, says: "We are delighted to see British universities looking to create more spin-out vehicles and capitalising on the value of their intellectual property…Since 3i and Glasgow University first collaborated on Kymata, we are now co-investing in a string of probably the most high potential, and perhaps the faster-growing young companies ever seen in the UK. We are making history up here…and Glasgow University has been key to these developments." In another deal, Intense Photonics, an optoelectronic company, has just been spun out from Glasgow University. This time, says Mr Harkin, the company will grow bigger and more quickly before external financing.
Mr Harkin's insistence that the university retain ownership of intellectual property surprised many. In the past it had been surrendered well below value. "We are tough only in demanding fair play," he insists.
More radical than that policy change is the make-up of Mr Harkin's business team. Instead of former academics, he picked 12 experienced business professionals, many of who still run their own companies. They can "fix deals across the world, through their personal contacts, negotiating skills, and intimate knowledge of the technology".
One is Gordon Macmillan, former senior operations manager for Compaq globally and prime mover behind Intense Photonics; and Kevin Cullen, once a brand manager with Procter & Gamble.

"These people are CEO-material," Mr Harkin says. "They're very difficult to find…We interviewed a lot of people for every one we picked." They can become millionaires from their university deals, if they strike them across a broad range of technologies, and especially when they take up board positions on a spinout company. Around half, like Mr Harkin, are consultants, not university employees.
By 2003, he wants to build Glasgow's total intellectual property and equity value up to £500m plus, including revenue from commercial sources, "the first university to do so in Europe".
Crucial to Glasgow's success has been the quality and volume for deals. Not far behind Intense Photonics are companies such as Actis, the security software group, QT Opto, the tunnelling diodes company and Chariot, an online education company.
Much time is spent advancing the commercial activities of Glasgow's academics. Mr Harkin admires their research skills, but observes that some need "one year's social work" before they can be put in front of an investor.
Stephen Whitelaw, CEO of Actis, a digital security company and Glasgow spin-out, says "I stumbled on this [then] new department at Glasgow called R&E, which really understands technology…and products, and deals and commercialisation."
Financiers wanting to deal with Mr Harkin must be prepared to sign deals speedily. Progress in decision-making is now a key feature of the Scottish, and indeed global venture investment scene.
On September 18, Glasgow opens a commercialisation office in Silicon Valley, the first European university to do so. This is important, says Mr Harkin, who says there is a race to get technology out of academia.
The original investment in the enterprise unit now seems modest. "Through success, such initiatives become self-financing," he remarks. His business team model received no mention in the trade and industry department's recent white paper on Science and Innovation policy, but should other universities repeat his formula? "If their technology is world-class…Certainly."

The Sunday Times

ENTERPRISE NETWORK

BUSINESS NEWS

August 12, 2001

Scottish academics are leading the way in starting up companies to turn their research into practical products.
Report by Sarah Gracie

Cashing in on research is today's university challenge

In 1998, Moira Brown, professor of neurovirology at the University of Glasgow, had her request for funding turned down by the Medical Research Council. It gave no reasons, despite having funded her research into the herpes simplex virus for 20 years and despite positive results from clinical trials.
Brown had made a breakthrough by modifying the virus so that it will attack brain tumours without affecting the surrounding tissue. The council's rejection left her immensely frustrated.
"Funding was withdrawn just when we were taking the research from the laboratory to the patient," she says. "I felt as if I were hitting my head against a brick wall. And I knew that as we progressed to the next phase of trials, the need for money would rise, not diminish."
At this point Brown did something unusual. Instead of writing yet another funding request, she turned to Glasgow University's Research and Enterprise unit for help. Formed to commercialise university research, the unit had recently been revamped by the Irish business Billy Harkin with the backing of the university's vice-chancellor.
Harkin and Brown sat down and wrote a business plan. Harkin negotiated the transfer of patents for the research from the university to a new company. A business angel who was committed to supporting research into cancer therapies contributed seed funding. One year later a company was born, named Crusade after Brown's quest to have her work turned into clinical treatments.
"Scientists are often arrogant about involving themselves in commerce," says Brown. "But for some it has become a personal mission to see this research turned into real treatments."
Crusade is attracting second-round funding, which will enable Brown to boost staff numbers. It is too early to say whether she will succeed in her mission but, if she does, the university will be among the first to benefit as it owns a third of the company.
Crusade is an example of a new wave of companies that have come into existence on the back of a drive within Scottish universities to make better use of their research. The universities of Edinburgh, Dundee, Strathclyde and Glasgow all have their own enterprise or "technology transfer" offices. They have more staff than in the past. They often have the personal backing of senior figures in the university hierarchy and sometimes have funds that enable them to contribute seed finance to start-up operations.
The results of this new level of commitment are already becoming apparent. Since Harkin's arrival at Glasgow University in1 998, he has driven up revenues for his unit from £52m to almost £100m this year and attracted £200m of venture capital to 16 start-up operations.
He has done this by encouraging scientists to think more entrepreneurially and protect their discoveries before going public. He also negotiates on behalf of the university for equity stakes in any spin-off companies, for royalty payment son products, and for research and licensing fees.
One of Harkin's central aims is to ensure that ventures have the right balance of academic and commercial brains.
"There is no point spinning out companies unless they can get to market with real products," says Harkin. "We want to focus our efforts on companies with serious ambition and the means of achieving it."

Intense Photonics is an example. Based on the research of Dr Craig Hamilton and Professor John Marsh of Glasgow University's opto-electronics department, the company will design and manufacture "photonic" microchips to speed up the transmission of data long optical fibres.
Such chips are expected to assist the new telecommunications revolution, enabling broadband internet services to be delivered into the home faster and more cheaply. The research might have been confined to academic circles if Harkin and his team had not linked Hamilton and Marsh with two heavyweights of the Scottish business landscape: David Lockwood, former divisional head of BAE Systems, the aerospace and electronics giant, and Iain Anderson, chairman of BT Scotland. They have become the company's chief executive and chairman, respectively.
Lockwood, 39, decided to leave a division with 2,500 workers and sales of £450m to join a start-up because Intense Photonics offered such an exciting opportunity.
"I was at BAE in the early 1990s when convergence in the telecommunications industry was happening," he says. "It was a fantastically exciting time. This is the next big thing. Being able to direct light efficiently is the basis for all the new services such as video on demand from your personal computer. I want to be part of it."
Lockwood has already attracted £7.7m of investment from 3I and ACT< the Irish venture-capital house. He has also bought a facility in Hamilton, Lanarkshire, where he will start manufacturing next year.
He has no regrets about leaving a big company. "The old job had different challenges," he says. "It was like steering an oil tanker. If you cause a spillage, whole communities are at stake. But once you get to know the shipping channels, it can become routine. Heading Intense Photonics is more like sailing a dinghy. It is easy to capsize. But when you are sailing along in the right direction with the wind behind you, there is nothing to beat it."
The trouble is the prevailing wind is not behind technology companies at present. Many are struggling to gain funding. PPL Therapeutics, which brought Dolly the Sheep to the world, had to call off a £45m public offer this spring because of bad market conditions.
Kymata, another opto-electronics firm spun out of Glasgow University, was valued last year at the height of the tech-bubble at £1 billion. It has just been sold to Alcatel Optronics, a subsidiary of the French technology group Alcatel, for £88m in shares. Nonetheless, despite the university's small equity stake - diluted by £114m of investment since the company's foundation - it still represents a big success.
As Dr Cathy Garner, director of the Research and Enterprise unit, puts it: "The heady days are over. The venture-capital houses are more wary, but the finance is still there if you have a strong technology and management team. Whatever the fluctuations of the market, these companies will create immense value for the university and the Scottish economy."
Harkin could not agree more. His favourite example is paediatric ultrasound. Developed by Professor Ian Donald of Glasgow University in 1958, it is now the standard in pre-natal clinics across the world. Equipment made by American and Japanese companies has worldwide sales of £2.8 billion, But Glasgow University took no intellectual property rights in the discovery. By contrast, Stanford University on America's West Coast has for more than a decade derived 70% of its commercialisation revenues from a single source: intellectual property rights in the discovery of recombinant DNA.

"You don't need many winners to transform a university's economic position," says Harkin. "If Glasgow University had negotiated just 2% royalties on the ultrasound, it would have obtained £56m from it each year. Think what you could do with that in terms of professorial chairs, new equipment and assembling top research teams. It is our job to make sure no such opportunity ever escapes again."

Glasgow team to spin itself out

Marcus Gibson, Financial Times December 6th 2001.

The University of Glasgow's technology transfer team at the Department of Research & Enterprise - which has created spin-outs such as Kymata and Intense Photonics - is to be spun out itself, writes Marcus Gibson.

Members of the commercialisation team led by Billy Harkin, deputy head, are launching a technology transfer business, Science Ventures, which will continue to execute spinout and licensing activities for Glasgow University. The venture, backed by Sir Graeme Davies, the university's vice-chancellor, will primarily offer its formula for technology commercialisation to other institutions in the UK and beyond, including universities, public companies and other sources of intellectual property.

Sir Graeme says his university's system of commercialisation would be valuable outside the university.

Mr Harkin says: "In the past a great deal of university intellectual property has been in urgent need of proper, coherent and fast-track commercialisation … but we know that UK universities have often not received the full commercial gain from high-value technology, although this has changed and improved dramatically in the past few years."

He ads: "Our approach has been based on core principles; talking to the best companies in the world, whatever their size and location, rewarding academics properly for their efforts, safeguarding the university's non-commercial interests, negotiation of professional licence deals and seeing the deals through to completion as quickly as possible."

The project will be seeking expansion funding.

DIRECTOR SCOTLAND (Institute of directors publication)

COMMERCIALISATION SPECIAL REPORT

By ANDREW COLLIER

UNIVERSITY OF GLASGOW

THE UNIVERSITY of Glasgow has long had a reputation for innovation and for technological excellence. During the course of its long and distinguished history, it has produced some of the worlds greatest doctors, scientists and engineers, and the spirit of scientific enquiry and commercial entrepreneurism is built into its fabric and its character.

The science generated at the university has quite literally changed the world. Carbon dioxide was discovered by chemistry lecturer Joseph Black in 1752; James Watt famously developed the condensing steam engine in 1764; Lord Kelvin proposed an absolute scale of temperature in 1848. More recent work includes the invention of the ultrasound scanner and the splitting of
an atom using lasers.

That pioneering ethos continues to this very day. The university has recently recorded spectacular advances in its latest Research Assessment Exercise (RAE). The number of subjects with a top rating of five has risen from seven to 23 in the five years to 2001, with four of these starred five
awards double the number secured last time. In addition, 95 per cent of research staff are in subject areas rated four, five or five star, compared with 69 per cent previously.

Against this background, it is hardly surprising that Glasgow has also been a leader in the field of commercialisation of its research output. It was one of the first higher education institutions in Scotland to recognise the potential of forging links with business.

The figures tell their own story of success. The University's research income has increased by 19 per cent from 48 million in the year 1997-8 to 62 million during the current academic year. Over the same period, it increased its royalty income by nearly 50 per cent and has averaged six spin
outs a year.

Not all of these have been successful, but the ones that have include first class examples of commercialisation in action. Kymata, for instance, was a spin out using University of Glasgow technology to manufacture optical devices for high bandwidth fibre optic communication. The company was recently sold for more than 82 million only three years after it was created.

Other examples include Crusade Laboratories, which is pursuing the development of variants of herpes Simplex Virus for the novel treatment of cancers; Intense Photonics, created to manufacture opto electronic devices with the help of 7 million worth of investment from 3i and ACT; and Adaptive Screening Limited (ASL), which will provide the pharmaceutical industry with a faster and more efficient method of identifying compounds for potential development as drugs.

The University's success in commercialisation has, then, been tangible. However, it has no intention of resting on its laurels. It is fully aware that it needs to constantly review its performance and ensure that it is ready to meet new challenges and to capitalise on opportunities.

One way in which it plans to improve its performance even further is by spinning out members of its own technology transfer team. This highly innovative move is part of a bigger programme aimed at improving the University's outreach to existing companies as well as to hasten the
creation of new research-based businesses.

The new technology transfer business, which has been named Science Ventures, aims to raise millions of pounds in financing from both private individuals and institutional funds. It will be headed by Billy Harkin, with other senior figures including Gordon McMillan and Moe Thuzar.

Building a company requires a different type of mentality and different type of approach from what you find in an academic organisation, says Harkin. It comes down to the expertise of the team. Science Ventures will receive fees from the university and raise its own funding. It also has the freedom to invest its own money in exchange for equity in new businesses.........

.......... The University of Glasgow's commercialisation programme is recognised as a leader in the field and as a first class example of best practice. At present, for instance, it has no less than 11 technologies deployed under the Scottish Enterprise Proof of Concept programme, with another 12 under consideration......

The trickle turns into a torrent

From Biotechnology Scotland, Issue 14 Summer 2001

The Scottish Minister for Enterprise and Lifelong Learning, Wendy Alexander chose an American setting to announce a whole raft of new Proof of concept awards in the field of biotechnology.
The pioneering fund has been extremely successful since its launch in 1999 and leading academic figures have praised the decision to extend the scheme.

"Ideas are now flowing out - the early trickle is turning into a torrent," said Professor John Archer, Principal of Heriot-Watt University and Convener of Universities Scotland's Research and Commercialisation Committee.

The new awards were revealed by Ms Alexander during a visit to the United States.
Following visits to the Virginia Centre for Innovative Technology and leading biotech companies the Minister said, "Scotland has already established an international reputation in biotechnology and it is particularly pleasing to see so many biotechnology projects being backed.

"These awards, managed by Scottish Enterprise, are at the heart of our drive to commercialise our world-class science base."
In all 126 proposals were received for the awards, the largest number - 54 - being from the biotech sector.
The Proof of Concept fund was set up to support the early stage development of innovative products and processes in Scottish universities and research institutions.
Ministers believe that work going on inside Scottish research institutions has the potential to transform the lives of millions.
Health is to the fore in many of the new wards. At the University of Aberdeen research will enable doctors to improve the treatment of cancer. The Moredun institute in Edinburgh is developing ways to target life-saving DNA vaccines at the body's immune systems. At Dundee and at Napier in Edinburgh more cancer work is being undertaken.

The Proof of concept Fund was originally launched in October 1999 with £11 million allocated over 3 years. IN February, Ms Alexander announced additional funding of £18 million over a further three years.

Professor Archer said it was "enormously encouraging" to Scotland's universities that the Fund had been extended and its scope widened.

Director of the Scottish Crop Research Institute, Professor John Hillman said the fund had become "a pivotal route for innovative science and technology to reach the market place and benefit Scotland."

Robert Crawford, Chief Executive of Scottish Enterprise, said: "Scotland has long had an international reputation for innovative thinking, but it is only recently that we have been able to match that with dynamic ways of commercialising this.
"The Proof of concept fund is a shining example"