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). 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.
