Spinning out a company founded on Intellectual Property (IP) developed and owned partially, or wholly, by the Institute is always an exciting undertaking. Sanger spin-outs are typically based on a varied portfolio of IP including knowledge of operating large-scale pipelines, software code, materials, and patents. This requires an exceptionally challenging diligence process: I needed a full grasp of the technology requested from Sanger by the company to enable all parties to make an informed decision around how it would be used.
Determining ownership is another variable - who owns IP? Sometimes this is a bit fuzzy, and that’s where due diligence is crucial: who helped deliver the assets, who funded their creation, who else has been involved in the process, do they have a say in the IP and are they happy for this to go into a commercial entity? Many questions, but it’s important to the Sanger Institute to identify anyone who has contributed to the IP to properly reward them.
The spinout process also weaves in many actors with different interests, both within and outside our Institute. A commercial vehicle that can attract the necessary investment is a great route to increase the chance and speed of our technologies delivering novel future drugs. Our job at the Genomics Innovation team is to enable this to happen - set the company in good stead to compete or partner with others, and secure future investment. As the Business Development Manager responsible for this project, I lead negotiations on behalf of the Sanger Institute with both investors and founders. Key areas of negotiation included company valuation, equity splits, investment structure and license structure. In addition, as the IP that will be utilised by Mosaic has been generated using Wellcome’s charitable funds, Sanger needs to ensure that Mosaic’s activities align with its mission to improve health.
Commercial strategy, which is understandably profit-driven, does not always align completely with academic and charitable goals which prioritise impact. Finding and negotiating terms that set the company for success and take into accounts our academic values is a good chunk of the role - it can take discussion and negotiationg. However, this does not mean that they are incompatible, and in this case, all parties were firmly committed to finding mutually beneficial terms.