Transcript Academia to Industry: Dr. Munro Marx Unistel Medical Laboratories (Pty) Ltd.

Academia to Industry:
The support of the University Stellenbosch in this process
Dr. Munro Marx
Unistel Medical Laboratories (Pty) Ltd.
Interaction: Academia and Industry
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Academic institutes are primarily committed to
creation and growth of technology and knowledge
Growing realization exists that mechanisms for
meaningful interaction between academia and
industry should be fostered and encouraged
Question arises….how meaningful has this
interaction been and what is the way foreword?
An answer can be found in the case of UML
Academia and Industry Interaction
Domain of the academia:
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Facility continuing education and
process utilization
Support for basic research and
knowledge creation
Academic intervention in specific
industry needs
Create a “third stream” income
Vested interest in the intelectual
property generated by staff
International relationships
fostered
Domain of Industry:
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Provide a cost effective service of
a world standard
Retain academic ties
Employ correctly qualified staff
Be financially independent
Foster and cement ties world
wide
Broaden horizons in different
areas (locally and internationally)
Make a profit
A vision of University Stellenbosch:
Commercialize IP
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Vision to commercialize intellectual property that could be
successfully patented
By licensing and production agreements between the US,
researchers and industry a “third money stream” may be
created
Researchers can then be rewarded financially for their
endeavours
US could retain academics usually lost to industry
Support of University Stellenbosch for the
commercialization process
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To successfully commercialise IP, the commercial activities
of the US would have to be conducted “at an arm’s length”
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Facilitated by a registered private company, wholly owned by
the US
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Unistel Group Holdings (Pty) Ltd. was registered as vehicle
for this purpose
Support of University Stellenbosch in the
commercialization process: The UML Story
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State and University budget constraints painted a clear picture in 1993
...the Department of Human Genetics would have to provide for itself
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An opportunity to provide a these services on a contract basis to the
medical fraternity was identified
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This service could be financially attractive and viable
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In 1993 no means existed to accomplished this under the “unbrella” of
the US
Support of University Stellenbosch in
the commercialization process: The
UML Story
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The concept was presented to the Vice-Rector ( Prof. H. C. Viljoen)
and was favourably received.
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With his initiative the commercialization process leading to the private
company, Unistel Medical Laboratories (Pty) Ltd. was started under
the supervision of Mr. Willem Agenbach.
The Cost Centre: Step 1
(Service Laboratory for Human
Genetics)
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A cost centre within the financial system of US made it possible to meet all legal
requirements:
Issue VAT invoices and pay VAT
Purchases managed in US financial system
Permission for use of US equipment was obtained
Staff appointments and pay rolling managed in US financial system
Equipment could be purchased and registered on an asset register
Monthly financial management statements could be provided
Cost centre would be audited on yearly basis
The Cost Centre: Step 2
(Conceptualization of an Idea)
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To realize a the concept of a commercial genetic service laboratory the
idea had to be “sold” private medicine and pathology practices
Availability of intellectual property vested in qualified staff and the
continued provision of a world class service was essential
Participation in service provision by an attractive partnership made
the concept acceptable to private pathology practices
Their participation ensured favourable support from the US
management
The Cost Centre: Step 3
(Independence of the Cost centre)
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Financial independence was essential as US could not be held responsible for
the cost of service provision to private medicine
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Additional equipment requirements had to be met
Staff had to be appointed and paid
Approval for PAWC employees to provide and after hours ad hoc had to be
obtained
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To finance the laboratory, a loan was raised (Loan repaid within two years)
Finally a commercial diagnostic genetic service could be offered on contract
from March 1993 (Service Laboratory for Human Genetics)
Step 4
(The UML Story)
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Functioning of SLHG marked the start of a long journey down
the road of full commercialization
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This process would be wholly over seen by the US
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Process started in 1994 and was completed in 1998
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The model should apply to all similar processes in the future
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Provide clear guidelines
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Accepted and approved by US management, the US senate and
the US council
The UML Story
( Viability of a private company?)
To determine the viability:
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Future patient referrals were accurately projected
A related income projection, considering year on year growth,
was made
Cost analysis based on price and salary escalations
Capital budget requirements to ensure progressive world class
service delivery was projected
Final report presented to the US management late in 1998
The UML Story: Step 5
( Finally… Commercialization!!)
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On 1 January 1999 Unistel Medical Laboratories (Pty) Ltd was
registered as an independent associated company of Unistel
Group Holdings (Pty) Ltd.
To convert SLHG to UML, a comprehensive valuation was
performed by PWC and included all asset requirements
All assets were purchased from the US by UGH
The purchase sum (R3 mil.) was financed by the sale of shares
to invited investors who would contribute to UML
This process culminated in the signing of a share holders
agreement in October 1999.
FINALLY, Unistel Medical Laboratories (Pty) Ltd opened its
doors for business on 1 November 1999
The UML Story
( Realization of an opportunity!)
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UML has been providing a world class genetic diagnostic and
testing service for 6 years
Turn over has increased from R3 mil in 2000 to over R7 mil in
2005
Human sample referrals have increased from 8000 in the year
2000 to 18000 in 2005
Animal referrals from 800 in 2000 to 5600 in 2005
Staff compliment increased from 9 to 18
This sustained growth made it possible for dividends to been
paid 5 years consecutively
(To date amounting to 73% of the original capital investment)
The UML Story
( The end)
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Quote from final proposal in 1998 relating to the original Dept. of
Human Genetics :
“Geen argument kan gevoer word teen die stelling dat niemand ‘n
organisasie soos die bestaande Mensgenetikalaboratorium kan
bekostig nie. Dit is ‘n hartseer saak om personeel te verminder, maar
ongelukkig is dit die enigste aksie wat sal verseker dat die huidige
kliënte die noodsaaklike diens ontvang wat tans deur die laboratorium
gelewer word. Die Universiteit moet ook nooit betrokke raak by
oorneem van afdelings wat, soos die Mensgenetikalaboratorium,
gesmoor word deur ‘n oorvoorsiene roetine personeelkontigent nie.
Nog minder moet die Universteit ‘n kans laat glip om
voordeel te trek uit ‘n potensiële “money spinner”. ‘n Goedgestruktureerde privaat laboratoriun is ‘n moet”.
The UML Story
( The end)
• Unistel Medical Laboratories would like to thank a
bold University Stellenbosch for the farsighted help
and courage in realizing an opportunity
• This was a first for South Africa and set the standard
to be followed by various Universities nationally
• Thank you for this exciting ride!!