Licensing Executives Society (U.S.A. and Canada) Announces 2011 Deals of Distinction™ Awards
Wednesday, October 19, 2011
Winners include Boeing, Pratt & Whitney, Bristol-Myers Squibb, Oncolys BioPharma, Yale University, Cephalon, Mesoblast, Liquid Metal Battery Corporation, Massachusetts Institute of Technology, Total S.A. and Disney
SAN DIEGO, CA, October 19, 2011—Historic deals have stolen headlines this year and awakened businesses, challenged by increasingly tough economic times, to the growing power and value of leveraging intellectual assets to create capital and sustainable competitive advantage. Five of this year's most compelling licensing and intellectual property-related deals were honored today with the Licensing Executives Society (U.S.A. and Canada), Inc. Deals of Distinction™ Awards.
Now in their 7th year, the awards are presented annually to companies that orchestrate the most outstanding IP-based licensing and business deals in five industry sectors, including Chemicals/ Energy/ Environment and Materials, High Technology, Industry-University-Government Interface, Life Sciences, and Consumer Products. Here are the 2011 winners:
Chemicals, Energy, Environment and Materials (CEEM) Sector Winner
Liquid Metal Battery Corporation, Massachusetts Institute of Technology, and Total S.A.
The Deal of Distinction being recognized by the LES Chemicals, Energy, Environment and Materials Sector (CEEM ) is unique in the number of parties it brought together, according to MIT Technology Licensing Officer Christopher Noble. Each party is playing a distinct role in bringing this renewable-energy technology from a university lab to commercialization.
The process started with MIT professor Donald Sadoway, who is the lead inventor on a portfolio of patent applications for batteries composed of liquid metal electrodes. This type of battery is designed to store megawatt hours of electrical energy, at a low-enough cost to allow the electric grid to eventually be powered entirely from intermittent energy sources such as photovoltaic panels and wind turbines. Research funding was initially provided by the MIT Deshpande Center. Presently, the research is funded by the Chesonis Family Foundation, the Department of Energy's ARPA-E research agency and by multinational energy company Total S.A.
Liquid Metal Battery Corporation (LMBC) was formed in 2010 as a spinout company from MIT focused on commercialization of the liquid metal battery technology. Its investors include both Total and a venture investment.
Through MIT, Noble negotiated the IP terms of the initial sponsored-research agreement with Total, and the subsequent license agreement with LMBC. The combination of technology funding by a large entity, venture investment, and specific commercial diligence milestones allow each party to both manage risk and have the potential to extract value on a time horizon that fits that party's business model and culture. This type of agreement also bridges the gap between industrial sponsored research and startup companies turning that research into commercial products, two areas with limited previous overlap.
High Technology Sector Winner
Boeing and Pratt & Whitney
The LES High Technology Sector Deals of Distinction™ Award went to Boeing and Pratt & Whitney.
Traditionally, Boeing and suppliers like Pratt & Whitney have created separate licensing deals with flight simulator suppliers. This created confusion amongst suppliers regarding royalty payments and administration of the multiple license agreements.
"This licensing agreement, undertaken by Boeing and Pratt & Whitney, has streamlined the management and administration of activities that had historically required multiple negotiations, approvals and agreements," said Allen Vaughn, Chair of the High Technology Sector. "This approach is important to optimize visibility and control of the licensed activity associated with flight simulators for multiple airframes and engine types. As a result of this comprehensive deal, both parties have achieved a higher level of oversight regarding the use of their technical data and have greatly reduced the number of individual licenses required to regulate such use."
Industry-University-Government Interface (IUGI) Sector Winner
Bristol-Myers Squibb, Oncolys BioPharma and Yale University
The 2011 Deals of Distinction™ Award in the Industry-University-Government Interface Sector (IUGI) was presented to Bristol-Myers Squibb Company (NYSE:BMY), Oncolys BioPharma and Yale University for a global licensing agreement for the compound festinavir, now known as BMS-986001, a once-a-day, orally available nucleoside reverse transcriptase inhibitor (NRTI) in Phase II development for HIV.
Early preclinical studies suggested that the compound could have an improved safety profile over previous generations of NRTIs. Oncolys licensed the compound from Yale in 2006 and developed it from pre-clinical to Phase II. In 2010, the Yale-Oncolys license was amended to help pave the way for a sub-license agreement that would enable the continued development of the compound by Bristol-Myers Squibb. The agreement is the largest sub-license to date by a Japanese biotechnology company.
"This agreement was the culmination of an intricate dance between the three parties over various agreements," said IUGI Sector Chair Cheryl Cejka. "The negotiations required crossing time zones, as well as cultural, and language boundaries. The transaction illustrates the integral relationship between academia, biotech, and pharma. The coordination of their respective strengths exemplifies what the IUGI Sector is really about."
Life Sciences Sector Winner
Cephalon and Mesoblast
The Life Science Sector Deal of Distinction™ Award went to Cephalon and Mesoblast for their strategic alliance to develop and commercialize novel adult mesenchymal precursor stem cell therapeutics for degenerative conditions in the cardiovascular and central nervous systems. The deal was in large part driven by very impressive Phase II results obtained by Mesoblast from trials of its proprietary product Revascor™ for the treatment of congestive heart failure.
"What made the Cephalon/Mesoblast deal really stand out was the overall size of the deal and the fact that it was in the relatively "young" therapeutic area of stem cells/regenerative medicine," said Life Science Sector Chair Michael Samardzija. The deal is said to be the largest ever in the regenerative medicine sector.
The financial aspects of this deal are impressive, including an upfront payment from Cephalon to Mesoblast totaling $130 million, obligations to fund Phase llb and Phase 3 trials, regulatory milestone payments of up to $1.7 billion, and an undisclosed revenue split between the companies. Mesoblast will retain the responsibility to conduct certain Phase IIa trials and for commercial supply of the products in the alliance, while retaining the manufacturing rights. Signaling a wider interest in accessing Mesoblast's cutting edge technology platform and broad product offerings, Cephalon additionally made an equity investment in Mesoblast and purchased a 19.99% stake at $4.35/share, totaling approximately $240 million.
Mesoblast is using the proceeds obtained from the deal on further clinical and preclinical stem cell product development for a range of major indications, including type-2 diabetes, osteoporosis, inflammatory lung conditions, macular degeneration, and intervertebral disc repair.
Events subsequent to execution of this transaction, including the acquisition of Cephalon by Teva Pharmaceuticals and a strategic global manufacturing alliance between Mesoblast and biologics manufacturer Lonza, have only served to confirm and further reinforce the strategic nature and critical importance of this deal.
Consumer Products Sector Winner
Disney Consumer's Fresh Produce Initiative
The LES Consumer Products Sector presented its 2011 Deals of Distinction™ Award to the Disney Consumer's Fresh Produce Initiative.
In 2006, Disney announced new food guidelines aimed at giving parents and children healthier eating options. Under these guidelines, Disney committed to using its name and characters on kid-focused food products that meet specific criteria, including limits on calories, fat, saturated fat and sugar. To amplify this message, last year Disney introduced the Magic of Healthy Living, a national multimedia initiative designed to help parents with their quest to raise healthy, happy kids. Disney Consumer Products (DCP) demonstrates the company's commitment to helping families eat healthier foods by engaging licensees to create affordable, convenient and nutritious food options for families.
Disney Produce is a cornerstone of DCP's food portfolio that promotes consumption across a broad range of categories including fruits and vegetables, low-fat dairy and whole grains. From whole fruits to convenience packs like sliced apples, Disney-branded produce is available year-round at grocery stores and national retailers. In order to make these healthy food options easy for families to identify, Disney-branded produce includes prominent placement of favorite Disney characters, a stylized green leaf bearing the Disney logo, and the placement of nutritional information on the front of packaging. Leveraging key entertainment content including new film and DVD releases, DCP and its licensees work with retailers to create branded-statements in stores and unique promotions as incentives for consumers to embrace healthier habits.
"We wanted to recognize the out-of-the-box thinking demonstrated by adding multiple levels of value to commodity items such as fruits and vegetables," said Sector Deal of Distinction Chair Susan Levy. "Disney not only ensures that certain quality standards are met for their licensed produce, in many cases they have also added interactive packaging. As a result, over two billion servings of Disney-licensed fresh produce have been consumed, providing a fun way for children to eat nutritiously."
About the LES Deals of Distinction™ Awards Program
Started in 2005, the LES Deals of Distinction™ Awards Program recognizes worthy transactions involving licensing and transfer of intellectual property and promotes creative and innovative solutions to business and licensing issues involving contracts. Nominations with the support of a LES member are considered and, with input from that industry, recommended by the LES Deals of Distinction™ Awards Committee and ratified by the LES Executive Committee. The criteria for the 2011 awards included distinctive deals in structure or objective, consummated in the 2010-2011 time period with at least one party having a presence in the U.S.A. and Canada. The physical award is hand sculpted glass by the artisans of Parris-Roché Design Studios, consisting of a pair of entwined blue glass ribbons encased in a clear conic pinnacle, symbolic of parties coming together and obtaining superior results through collaboration. The awards were announced in connection with the LES Annual Meeting in San Diego, California, USA, held October 16-18, 2011, which included participation of nearly 1,200 licensing executives. For more on the LES Deals of Distinction™ Awards, see http://www.lesusacanada.org/dda
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About the Licensing Executives Society (U.S.A. and Canada), Inc.
Established in 1965, the Licensing Executives Society (U.S.A. and Canada), Inc. (LES) is a professional society comprised of over 4,000 members engaged in the transfer, use, development and marketing of intellectual property. The LES membership includes a wide range of professionals, including business executives, lawyers, licensing consultants, engineers, academicians, scientists and government officials. Many large corporations, professional firms, and universities comprise the Society's membership.
Licensing Executives Society (U.S.A. & Canada), Inc. is a member society of the Licensing Executives Society International, Inc. (LESI), with a worldwide membership of more than 10,000 members in 32 national societies, representing over 90 countries. For more information on LES, see www.lesusacanada.org.