Fuentek's Tech Transfer Blog

Fuentek Plays Key Role in Successful Technology Transfer from Roche Diagnostics to Theron, Inc.

On October 29, 2003, Roche Diagnostics Corporation of Indianapolis, Ind. and Theron, Inc. of Carmel, Ind. signed an agreement that Theron would acquire licensing rights to Roche’s biosensor technology platform. With this technology, Theron will establish a new company to develop and sell products in the environmental and food safety testing markets.

The events that led to the deal began the previous February, when Dr. Jörg Schreiber, Vice President of Special Products for Roche Diagnostics, approached Fuentek for assistance in determining the feasibility of out-licensing Roche’s flagship biosensor technology. His selection of Fuentek came at the recommendation of the Roche Protein Expression Group (RPEG), a business unit within Roche Applied Science, with whom Fuentek had provided strategic market research and analysis in November and December of 2002.

The request to explore out-licensing Roche technologies stemmed from President and CEO, Dr. Martin Madaus’ desire for Roche Diagnostics to become involved in the newly created Central Indiana Life Science Initiative, today BioCrossroads—a bio science initiative to attract and create jobs, companies, and entrepreneurial opportunities to the Central Indiana area with the goal of creating a hub for innovation in the area of life sciences.

This goal was brought to fruition with the successful licensing to Theron, Inc. of Roche’s biosensor technology platform that is the basis of Roche’s preeminent Accu-Chek® Advantage® blood glucose monitoring systems for Theron’s field of interest. This agreement with Theron perfectly matched the goal of BioCrossroads, which according to David Goodrich, president and CEO of the Central Indiana Corporate Partnership and co-founder of BioCrossroads, is to “foster collaborations between institutions within the region to identify commercialization opportunities.”

Fuentek’s Role

Fuentek played a key support role in the licensing activities, providing Roche with crucial data for industry, application, and partner selections as well as key data and innovative ideas for the final negotiations.

Traveling the Road to Success

Strategy discussions were begun in February 2003, to answer the question of whether Roche’s biosensor technology could be out-licensed to a noncompeting industry for a noncompeting application. And, if so, what was that industry?

Roche Diagnostics already possessed feasibility data for several fields and applications outside of its strategic focus. Fuentek’s assessment of the technology provided an unbiased opinion with validated data for these new and innovative uses for the biosensor technology. In addition, Fuentek produced technical marketing materials to assist in the marketing efforts. The Web site Fuentek developed to market Roche’s technology recently won an award from the Society for Technical Communications.

Through Fuentek’s assessment results and further strategy discussions with Dr. Schreiber, it was determined that food safety and environmental testing would be suitable industries in which to seek a potential licensing partner.

Beginning with a list of potential partners from Dr. Schreiber, Fuentek researched the companies within the selected industries to assist Roche in choosing the best match for the biosensor technology. Throughout the process, they also worked with business students at Purdue University Krannert School of Management to further develop ideas and business plans for the biosensor technology.

As a potential partner, Theron was the most promising. Once negotiations began with Theron, Fuentek provided assistance with terms for the license such as range of royalties and upfront payments typically paid, pro forma statements, and other data useful at the negotiating table—including a novel idea for efficiently transferring critical knowledge of the technology from Roche to Theron.

A Novel Approach to Knowledge Transfer

While researching and negotiating the spinout of a technology from one industry to another is never easy, it’s a lot simpler than the actual transfer of knowledge. Because of these known difficulties and the desire to make the technology transfer more efficient, the idea was developed that select scientists involved with the technology be contracted to work with Theron to facilitate a more effective and faster transfer of critical knowledge about the biosensor technology. By putting in place this hands-on collaboration of scientists, Theron can more quickly move forward in developing their new product.

This creates a win-win situation for everyone involved: the scientists get to see their technologies come to fruition as new products, Roche earns revenues from the license without competitive implications for their own products, Theron gets a jump-start on development of their new product, and BioCrossroads sees their goals become reality with Theron’s new 300-employee business added to their roster. Dr. Schreiber continues to work to help Theron find venture capital, and Fuentek has assisted him with these efforts by fine-tuning his VC presentation to give it a stronger marketing slant and more effectively communicate the message.

Fuentek and Roche Diagnostics will continue to work together to spinout other Roche technologies for further enrichments to both Roche’s bottom line and the BioCrossroads goal of creating a hub for life sciences innovations in Central Indiana.

Dr. Schreiber commented, “I can envision that we will start at least three new companies. Then we will nurture them.”