OTT contributes to the future with a new spin-off

The Office of Technology Transfer (OTT) has helped a number of scientists over the last couple of years to start up companies. The cornerstone of such companies is usually an outstanding innovation. These spin-offs are the seeds of tomorrow's economy.

However, a spin-off is only one of the means to effectively transfer technology from a laboratory to more general industrial use. A spin-off can also be accompanied by a contract through OTT to continue research at McGill. In the case described below, RGO (the Research Grants Office) was also involved, as the technology is the result of grants from MRC and NSERC.

This story is about one of our recent cases in the biomedical sector. The innovation is the result of outstanding research on campus under the leadership of Dr. H. Bussey from the Department of Biology, which has now resulted in the creation of the company Mycota.

During the autumn of 1997, McGill and the inventors, through OTT, started discussing an exclusive time-limited option agreement with venture capitalists regarding the financing of a company to develop biomedical applications of Dr. Bussey's research involving yeast genes and yeast genome technologies. Such applications can be for drug resistance and antifungal activity. The option agreement was signed in February 1998. Thus, OTT's role was to help realize the commercial potential of the inventions of Dr. Bussey and his team. The Department of Biology was in this case the nurturing ground for this innovation, and the research was supported by grants from NSERC and MRC.

But it also took another ingredient to allow for the development of the company: seed funding from venture capital.

T²C² (Transfer Technologies Commercialization Capital) is a seed venture capital firm, one of two recently created by the Société financière d'innovation (Sofinov), a subsidiary of the Caisse de dépôt et placement du Québec and the Business Development Bank of Canada. T²C² was created last year to provide seed capital for the identification, evaluation and commercialization of health science technologies primarily originating from universities and public and private research centres. Robin Brassinga from OTT approached the biotechnology arm of T²C², in addition to other firms, to test their potential interest in Dr. Bussey's invention.

Venture capitalists often like to share risk with each other. In this case, T²C², with the approval of the funding scientists and OTT, accepted the participation of GeneChem Inc., a seed capital and technologies venture fund. These firms are active participants in the creation of this spin-off company. They provide bridge funding and will help the team in place to develop their business plan, attract investors and provide management expertise.

What attracted the venture capital funds were the excellence of the team and the quality of their innovation in terms of its commercial potential. Not all great inventions have commercial value, but it was perceived that this one had. It is worth noting that in this case, as in the case of many of our other spin-offs, more than one invention was involved.

The commercialization will take place through the new spin-off, Mycota, in which Dr. Bussey and his co-founders, Drs. Lussier, Storms and Boone, McGill University, T²C² and GeneChem will have equity, together with firms providing the necessary venture capital. McGill will transfer the technologies through a royalty-bearing licence to Mycota and has agreed to further related research at McGill under a research contract with the company.

This agreement was the third concluded with T²C² and the second with GeneChem leading to spin-off companies which benefit McGill inventors. The hard work remains to be done now to develop Mycota to a full-size, high-growth company. However, most companies, like babies, have to learn how to walk before they run, and this can be difficult. OTT wishes Mycota success and hopes that this story will be inspirational to others who are thinking of creating their own spin-off companies.

Publication deadlines

OTT wishes to advise researchers that publication or public release does not necessarily come on the date of issue of a publication but may be preceded by an "on-line" version, if available. So when protecting an invention, please take into account that such on-line posting may occur as early as a month prior to the actual date on the journal. OTT could help you if you have questions relating to such issues.