Mars Innovation: A Unique Model for Tech Transfer

Mars Innovation is a non-profit organisation set up in 2008 to handle commercialisation of discoveries made at its 15 member institutions in Toronto, Ontario, Canada, which include several universities, hospitals and research institutes.

Mars’ university members are University of Toronto, York University, Ryerson University. OCAD University was previously also a member, but dropped out in 2013.

The organisation is part of a wider programme dubbed Centres for Excellence in Commercialisation and Research (CECR, pronounced “Cesar”), made up of 21 such centres of which 10 are located in Ontario.

CECR is the result of discussions at the federal level, which began in 2006 and led to the realisation that while Canada ranked highly for academic research, it was struggling to commercialise those ideas. The programme funds centres for a period of five years but requires match-funding. It has awarded more than C$500m ($380m) in federal funding to date.

Mars Innovation was set up when institutions in Toronto decided to co-operate to secure funding through CECR. The members pay annual fees to match the public funding.

According to Raphael Hofstein, president and chief executive of Mars Innovation, the model solves the two weakest points of tech transfer: lack of dealflow and the ability to fund spinouts.

The five year period was an uphill struggle for Mars, however. Hofstein said: “Based on the fact that we have a substantial component of disclosures in the medical area, it was a bit of a challenge for us in the beginning because they said: ‘we will fund you for five years, but after five years we expect you to become self-sustainable’.”

Many of the ideas brought to Mars are still in the very early-stages, and do not lead to exits within in the given timeframe. Hofstein and his team therefore spent five years discussing further funding with the federal government, and in 2013 were granted an extension until 2018.

Interestingly, Mars is not interested in adding more members. Hofstein explained: “We are quite happy with that [number]. When I look back over the past eight years of operation, we are getting close to a total of 2,000 disclosures. I think that is a good vintage.”

Those disclosures are also getting increasingly more diverse. In the beginning, Mars received primarily discoveries in the medical sector, but the balance has since shifted to 60% medically-oriented research and 40% for other areas. The medically-oriented discoveries, Hofstein elaborated, are a diverse set of technologies and include everything from drug development and molecular diagnostics to medical devices and healthcare IT.

The remaining 40% meanwhile cover “a smörgåsbord all the way from alternative energies and solar energy, and water reclamation to all sorts of mobile apps”.

Hofstein explained that diversity by pointing out: “The reason why it is so versatile is one privilege that we do not have: if someone comes to us from a member institution and says here is something that deals with new techniques for gold mining, I cannot tell them that I do not have the skillset in the office. If I do not have the skillset, I have to make sure I do have the skillset. So I have to be attentive to everything, regardless of the fact that it is very versatile.

“But we are still a small team; we are 20 people doing everything, and to be able to address the versatility, we rely quite heavily on outsourcing.”

This also means that the vast majority of the 2,000 disclosures are sent back to the principal investigator or to the respective tech transfer office if the institution has its own (which is true in the case of University of Toronto and a couple of hospitals). Indeed, only about 15% of disclosures lead to licensing deals or a spinout, and Mars now has between 100 and 120 assets under management, of which 40 are spinout companies and the rest licensing deals.

Despite the success of Mars Innovation, the model remains unique in Canada and no other purely academic clusters have formed as part of the CECR programme.

Hofstein, however, noted that other types of clusters have been set up: “For example in Quebec there is a group called CQDM, which is a pre-competitive stage consortium that is funded by pharmaceutical companies, but has affiliations with the University of Montréal, McGill, Laval, and a few others.”

In fact, the model remains unique across the world. Although France’s network of SATTs are comparable as they also reunite academic institutions under regional tech transfer offices, that programme has been mandated from the political top.

According to Hofstein, the uniqueness of Mars is because the model “is not an easy one. To be able to do that, and to do that in a constructive way, people have to put aside the egos of individual academic silos.”

Hofstein actually tried to set up such a model in Israel, but remained unsuccessful. He said: “When I realised that there was a chance to do it [in Toronto], it motivated me to come over. Because I truly believe that over time, people will realise that this is the only way you can do tech transfer and remain meaningful.”

Looking ahead, Hofstein is confident that in a few years’ time Mars Innovation will be self-sustainable thanks to milestone payments and royalties from its licensing deals, as well as company exits. Indeed, Mars is entitled to 25% of profits gained from licensing deals.

Similarly, Mars is part of the commons when it comes to spinouts, and is guaranteed a 25% cut of profits on whatever percentage is retained by the spinout’s founders following dilution in the funding rounds.

Mars Innovation is also working with peers to establish a “mega-CECR”, with a view of further improving the quality of research disclosures.

To that end, in June 2014, Mars joined forces with other CECRs – namely the Centre for Drug Research and Development, the Vancouver Prostate Centre’s Translational Research Initiative for Accelerated Discovery and Development, the Centre for Commercialization of Regenerative Medicine and the Centre for Probe Development and Commercialization – to set up accelerator programme Accel-Rx Health Sciences Accelerator.

And with Mars Innovation also having established “a constructive and cordial relationship with the provincial government of Ontario and strong ties to global industrial players”, according to Hofstein, the future certainly looks bright for the organisation.