June 17, 2009Ottawa, Ont.

New Models for CommercializationFPTT 2009 Annual Conference

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AAFC activities and financial programs work together along the Innovation Continuum

ADOPTION/COMMERCIALIZATION PHASE

Agri-Foresight, Innovation Fora - Enhancing capacity to anticipate challenges and opportunities and to proactively take collaborative action

Promoting Agri-based Investment Opportunities -Bringing entrepreneurs and investors together – Innovation Symposia

Science to Support Commercialization of New Agri-Based Products -Mobilizing science capacity to address pre-commercialization challenges

Agri-Science Clusters - Industry-led applied science

Greater Government Funding Jointly Funded Greater Industry Funding Public-Private Collaborations

INNOVATION CONTINUUM

DISCOVERY PHASE

PRE-ADOPTION / PRE-COMMERCIALIZATION PHASE

AAFC in-house Science Research •Strategic alignment with government and sector priorities•Public good and high-risk discovery science•Applied/Production Science

Growing Forward Growing Forward CollaborationsCollaborations

Innovation Commercialization Centres -Enhancing the access and delivery of commercialization services that support business development activities of agri-based entrepreneurs

Supporting Innovative Capacity of Farmers - Supporting innovators and early adopters of new technologies and practices

Agri-Opportunities -Accelerating Commercialization of new market ready products, processes and services

ecoABC – Biofuels production

Advancing Canadian Agriculture and Agri-food – Path finding, new opportunities, responding to emerging issues and knowledge transfer

ABIP - Interdisciplinary, multi-sectoral collaboration along the innovation chain for the development of non-traditional products from agricultural feedstocks

CAFI - International Market Development

FCC Venture Capital - for growth to commercialization

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AAFC research works across the food value-chain; we pursue an integrated system-based approach to R and D for supporting innovation

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Current active licenses for commercialization

• AAFC has 689 active licenses which together generated $7.6 million of royalties in 2008-09

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AAFC Transfers Technology to 100 Canadian Companies (location of licensees)

Alberta 13 British Columbia 3 Manitoba 12 Nova Scotia 3 New Brunswick 2 Ontario 26 Prince Edward Island 5 Quebec 23 Saskatchewan 12

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Distribution of variety licenses by crop

Cereal 245 Fruit 80 Forage 55 Oilseed 36 Ornamentals 10 Other 15 Pulse 79 Vegetable 21

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Technology Licenses

AAFC also develops technologies in areas of biotechnology, food products, animal health, grain quality assurance, food processes, biocontrol products, health food products, monoclonal antibodies, proteins.

Currently, there are 79 technology licenses; 32 of them generated about $ 1 million in royalties 2008-09.

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How we’ve done tech transfer for commercialization

• Formal competitive RFPs based on the most anticipated benefit to Canada arising from the investment proposal for the IP right

• The MII Program which commenced in 1994 stimulated the use of CRDA’s incorporating either an option to a licence for FIP (results are pre-sold), or ownership vested with the other party– About 25% of our gross direct patent costs were recovered

last year.– About 48% of our 441 patents are encumbered

• The PICO precedent.

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The AAFC-BCTFA-PICO partnership

• AAFC has possibly the only sweet cherry breeding program in the World (it takes about 15 years to develop a new variety)

• Our cherries are self fertile, producing large firm fruit that matures later than that of the main N.A. commodity cherry producer (Washington); they command premium prices around the World

History• 1990 Canada introduces PBR. Act.• 1994 The N-F-P BCTFA creates F-P subsidiary Plant Improvement

Corporation of the Okanagan (PICO) and a licence agreement is signed (renewed and expanded in 2005).

– Over 90% of new BC plantings since then have been to AAFC varieties, which have also been commercialized in complementary southern hemisphere markets

– Cherry exports have increased from $1 million to $20 million; cumulative royalties exceed $2 million.

– PICO generates revenues from sale of fruit as well as from budwood. •

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The Growing Canadian Agri-Innovations Program components support the innovation continuum and build on existing programming

Agri-Foresight - Enhancing capacity to anticipate possible challenges and opportunities and to proactively take collaborative action

Promoting Agri-based Investment Opportunities - Bringing entrepreneurs and investors together – Innovation Symposia

Developing Innovative Agri-Products - Mobilizing science capacity to address pre-commercialization

challenges

Canadian Agri-Science Clusters - Industry-led applied science

Greater Government Funding Jointly Funded Greater Industry Funding Public-Private Collaborations

INNOVATION CONTINUUM

DISCOVERY PHASE PRE-ADOPTION / PRE-COMMERCIALIZATION PHASE

AAFC in-house Science Research •Strategic alignment with government and sector priorities•Public good and high-risk discovery science•Applied/Production Science

ecoABC – Biofuels production

ABIP - Interdisciplinary, multi-sectoral collaboration along the innovation chain for the development of non-traditional products from agricultural feedstocks

ADOPTION/COMMERCIALIZATION PHASE

Growing Forward Collaborations

Agri-Opportunities -Accelerating Commercialization of new market ready products, processes and services

New Growing Canadian Agri-Innovations Program Initiatives

Existing AAFC Programs

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Canadian Agri-Science Clusters

Not-for-Profit (NFP) Agricultural Corporation• develop and submit the proposal

• sign the Contribution Agreement with AAFC - Innovation• sign one Collaborative Research and Development Agreement with AAFC – Science

• be the eligible recipient that will be reimbursed for eligible expenses

Board of Directors (BOD)• represents management

• consists of agri-industry stakeholders

Industries nationally assembled into a NFP

Finance Science Tech Transfer / Commercialization

Applications are industry led meaning that applications must come from industry clients

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Developing Innovative Agri-Products

Scientific Expertise

and/or

and/or

Industry Applicant(Farmers, agricultural organizationsentrepreneurs and agri-business)

University Research

Industry and other NGOResearch

AAFC Research

Developing Innovative Agri-Products Initiative

Applied S&T Pre-commercialization

Projects

Agri-Sector Profitability and competitiveness

Development of new agri-products,

processes and practices

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Federal Canadian S&T funding comes in different colours

Departmental Appropriations

(Vote 1)

EnvironmentCanada

Other Departments & Agencies

Health Canada

Natural ResourcesCanada

Industry Canada

Agriculture and Agri-Food Canada

Department ofFisheries & Oceans

NSERC

GenomeCanada

National ResearchCouncil

CanadaFoundation for

Innovation

Canadian Institutesof Health Research

(CIHR)

Public Health Agency of Canada

Extramural Grants & Contributions

Clusters/DIAPAgri-ScienceClusters/DIAP

Vote 10

Canadian Food Inspection Agency

Atlantic CanadaOpportunities Agency (ACOA)

Western EconomicDiversification (WD)

IRAP

Technology PartnershipsCanada (TPC)

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Developing Innovative Agri-Products

*CRDA – Collaborative Research and Development Agreement or service contract$ - Federal Government Contribution Funding$$ - Private Cash Funding (=>.33$)

Developing Innovative Agri-Products Initiative

$

AAFCResearch

Industry, NFedGOs, Universities

Non AAFC Federal Labs

Agricultural Industry Applicant (farm groups, agri-business) provides at least 25% of the

direct project costs ($$)

CRDACRDA

$$CRDA $,and/or$$

Applied science, technology development and pre-commercialization projects

leading to the development of new agri-products, processes and practices.

Contribution Agreement

Vo

te 1

- N

PO

$$

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The benefits of these new models

• These programs will support technology transfer and commercialization– Focused business management of technology projects– Governance framework allows for better access to early

stage financing, and R and D tax credits– Robust risk management rather than simple risk transfer.