Equity holdings of the University of British Columbia in research-based
enterprises — most of which were created from UBC research — reached
$6.9 million as of March 31, 1997.
The university holds equity in 28 knowledge-based companies, 27
of which were created from UBC research. This latest market value
represents a 17 per cent increase from the same time in 1996 when
the university carried shares in 23 spin-off companies.
“Forming new high technology companies is a natural progression
of UBC’s research activities that brings direct economic and social
benefits to the region,” said Bernard Bressler, UBC’s vice-president,
Research.
“These ventures maximize the value of UBC’s research program, and
represent an important stream of revenue in the form of related
research contracts, royalties and equity that in turn supports ongoing
research.”
UBC began negotiating equity options in 1988 for two reasons: to
support start-ups by reducing the cash burden and financial inflexibility
imposed by royalty payments, and to enable the university to capture
growing capital values in companies whose revenues are not typically
realized for seven to 12 years from inception.
Ventures West President Michael Brown said UBC’s willingness to
accept an equity position in lieu of royalties is a significant
development for new knowledge-based companies in the province.
“Combined with increased access to early stage funding available
through the venture capital community, this improves the potential
for success for these otherwise risky enterprises,” said Brown,
whose company is one of three fund managers overseeing a $25-million
fund supporting early stage development of new technologies in Western
Canada. “We hope that UBC’s movement in this area will inspire other
Canadian universities to follow suit.”
Establishing a new venture includes formalizing the rights to commercialize
the underlying UBC technology through a license agreement. Such
rights are granted to a company in exchange for equity and/or royalty
participation for both the inventors and the university.
UBC acquires all shares under these agreements, and maintains a
sell-only position. Liquidation of holdings is based on company
event milestones and share prices, with sell decisions exercised
only after full public disclosure of any company developments. Shares
held by inventors are not managed by the university.
Of the 28 companies in UBC’s equity portfolio, 26 are located in
British Columbia; 19 are private companies and nine are public;
16 companies or 57 per cent are in the life sciences sector, nine
companies or 32 per cent are in the physical sciences sector, and
three companies or 11 per cent are in the information technology
sector. The 19 private companies account for $4.7 million of the
portfolio’s total market value, with the nine public companies representing
the remaining $2.2 million.
Companies in which UBC holds shares include Inex Pharmaceutical
Corp., Forbes Medi-Tech Inc., ID Biomedical Corporation, IGT Pharma
Inc., Micrologix Biotechnology Inc., Pacific Asia Technologies Inc.,
Westport Research, Inc., Aurora Instruments Ltd., Glucogenics Pharmaceuticals
Inc., GMW SpeakerTape Corporation, Ingenix Biomedical Inc., Kinetek
Pharmaceuticals Inc., NeuroVir Inc., Synapse Technologies Inc. and
TerraGen Diversity Inc.
UBC technology transfer activities are managed by the University-Industry
Liaison Office (UILO). The UILO forms strategic partnerships among
industry, UBC researchers, the investment community and government
to target opportunities for research collaboration and technology
commercialization. Since 1984 the UILO has licensed over 220 UBC
inventions, has actively participated in the creation of 72 spin-off
companies, and has established a database of over 450 value-added
UBC technologies ready for licensing, joint research and development,
and investment.
Background information
on the equity portfolio is attached.
Detailed information regarding UBC technology transfer activities
is also available at www.uilo.ubc.ca.
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