Exit Strategies

The mission of the Alfred Mann Institutes is to develop biomedical technology to a later stage prior to an exit event, thus increasing both the probability of successful exit and the ability to obtain a higher valuation. Corporations prefer to acquire technology with demonstrated performance, and thus decreased risk, and are willing to pay a higher price for such technologies. This is especially true when the technology has followed proven industry standard development processes since such activity supports an easy transition into a commercial entity. The outputs of the AMIs are potential products that have overcome technical/clinical hurdles, completed verification and validation, outlined a manufacturing plan, determined the accurate cost of goods, been appropriately positioned within their competitive landscape, established a regulatory pathway, and clinical practicality. The AMI covers funding of the higher risk stage of development, providing an improved risk-benefit profile.

Reference: Windhover’s Strategic Transactions Database

The later stage development prior to licensing or sale increases the price and thus increases the revenue to the university and the investigators. The AMI bridges the funding gap and brings development resources before the technology exits the University umbrella, to minimize the post transfer development funding need and optimize the acquisition opportunities for successful commercialization.

There are numerous times in a development cycle when exit strategies are possible for a technology in development. The developing entity may consider the following exit points (but are not limited to):

Licensing of the basic Intellectual Property (IP) portfolio which would include patents and/or trade secrets.

Licensing of the technology early on in the Planning phase when a business plan is put together, with some technology prototyping as an early indication of proof of concept, or Feasibility.

Licensing of the technology after some Development has occurred with bench or lab testing supporting more formalized proof of concept, and reduction to practice.

It is possible to delay exit until the completion of animal studies to show clinical safety and or efficacy in an animal model. A group may continue with the development, progressing with completed bench tests on refined engineering prototypes perhaps even with formalized Verification and Validation tests on pilot production units.

A late stage exit occurs when regulatory approval has been received to enter a small scale human clinical study under an IRB or IDE agreement.

A second more advanced late stage exit may occur where the engineering design and manufacturing process development have been completed and formally evaluated with statistically significant testing. This is sometimes referred to as the Transfer manufacturing phase. It would precede a submission for regulatory approval of product (510(k), PMA and/or CE mark), with an intent to produce and market a finished product.