News Item

Academia Outpaces Corporate Biotechnology, But Europe Lags US and Asia

7 May 2007

·           Academic patents outpace corporate biotech by fifty per cent  
                 – but  European universities trail US and Asia
·           Biotech matures and becomes more commercial, focusing on specific technologies
·           Strong growth from Asia poses threat to Europe
 
Academia and the public sector are driving the advances in biotechnology, forging ahead of corporates, claims a new report by Marks & Clerk. The report, however, highlights a major global disparity, with the academic advantage almost entirely enjoyed by the US, whilst Europe’s institutions lag behind Eastern Asia.
 
In its Biotechnology Report 2007, Marks & Clerk explores worldwide patent activity in biotechnology, focusing on the world’s largest firms and academic institutions, as well as the fastest-growing and most specialist biotechnology players.
 
The report finds academic filing outpaced the commercial sector by 51 per cent between 2002 and 2006 in a comparison of the top 20 patent filers. Only one corporate, US-based Genentech, makes it into the top five patent assignees overall.
 
Table 1:Top patent applicants in biotechnology

	Top assignees: 2002-2006	Number of patent families
1	Japan Science and Technology Agency	1022
2	University of California	543
3	Government of the United States	334
4	Genentech Inc.	421
5	University of Texas	277

 
The academic lead reflects badly on Europe, however, with Europe’s leading universities entirely failing to make it into the top 20 academic filers. The academic list is dominated by the US-based institutions, with the exception of the Japan Science and Technology Agency and the University of Tokyo. This is in spite of the EU having the highest per-capita number of science and engineering graduates in the world. The nearest European entrant is the University of Oxford, in the form of Isis Innovations Ltd, with 65 patent families to Harvard’s 75.
 
Table 2: Key patent applicants in biotechnology (academia)

	Key academic assignees: 2002-2006	Number of patent families
1	Japan Science and Technology Agency	1,022
2	University of California	543
3	Government of the United States	443
4	University of Texas	277
5	Johns Hopkins University	154
6	Stanford University	148
7	Columbia University	137
8	University of Pennsylvania	133
9	University of Florida	132
10	Duke University	110
11	Wisconsin Alumni Research Foundation	102
12	University of Michigan	100
13	University of Tokyo	100
14	Massachusetts Institute of Technology	100
15	University of Washington	96
16	Yale University	93
17	University of Minnesota	84
18	New York University	80
19	University of Illinois	79
20	Harvard University	75
	TOTAL	4,008

 
Dr. Gareth Williams, Partner at Marks & Clerk and co-author of the report, says:
 “The academic performance from Europe reflects badly on its leading institutions, which are still failing to translate their enormous skills base into a commercial reality. Although Europe is making strong advances in this area through the development of spin-out companies and increased patent licensing, it needs to move from a position of growth to being a challenger on the international stage. Academic patents are very valuable and are often highly cited as they cover fundamental technologies. Yet Europe is still missing out enormously to the US in this area”.
 
For the key corporate assignees, Europe fares slightly better, with Novozymes coming fifth in a list of the top 20, which also includes US/UK GlaxoSmithKline. 
 
Table 3: Key patent applicants in biotechnology (corporate)

Overall position (vs. academia)	Key corporate assignees: 2002-2006	Number of patent families
4	Genentech Inc.	421
6	Millennium Pharmaceuticals Inc.	272
7	General Hospital Corp.	201
8	Applera Corp.	195
9	Novozymes	162
10	Zymogenetics	161
13	Human Genome Sciences	141
17	PE Corporation	131
18	Amgen Inc.	124
20	Takara Bio Inc.	106
25	Curagen Corp	98
28	Biogen Idec	88
31	Merck	85
33	Exelixis Inc	81
36	Genzyme	79
37	MedImmune, Inc.	68
38	Maxygen, Inc.	62
38	GlaxoSmithKline	62
39	Immunex Corp	58
40	Syn X Pharma, Inc.	55
	TOTAL	2,650

  
Gareth Williams adds:
“Whilst corporate Europe fares much better than its academic counterpart, corporate filing is necessarily more sporadic, focused on certain technologies, compared with the more sustained filing from the academic sector. Now that the regulatory environment has improved at the European Patent Office, there is frankly no excuse for Europe not to make more commitment to overcome this historic gulf.”
 
Other findings from the Marks & Clerk biotech report include:
 
Industry matures and becomes more commercial
The Marks & Clerk report also finds that the biotechnology sector is becoming much more mature and less speculative, focusing on specific technologies in a display of increasing commercialism. In 2002, patenting activity spread across a variety of patent classes, and included a high level of speculative, sequence-based inventions relating to genetic engineering. By 2006, this figure falls by 78 per cent, and the focus of research becomes much more concentrated. Almost half (45 per cent) of patents published in 2006 relate to the A61K class (peptides, antigens, antibodies and gene therapy).
 
Gareth Williams comments:
“This is great news for industry as it suggests that lessons have been learnt as to what is patentable and, more importantly, commercially worthwhile. Better informed business decisions are being made, which should translate into more biomedicinal products being made available to the public in the future”.
 
As a result of this more focused and commercial activity, biotechnology patents are in fact seeing a slight global decline. This is led by a decline in international patent applications filed through the international (PCT) route, which have fallen 55 per cent from approximately 2,200 in 2002, to 1,000 in 2005.
 
However, this decline is offset by a greater number of patents being filed at national patent offices, and an increase in the number of patents granted (up 18 per cent between 2002 and 2006). This supports the picture that the industry is becoming increasingly mature and commercial, with a smaller number of stronger filings being filed more widely across the globe, aiming to capture a greater market.
 
The report also attributes the rise in patent grants to better clarity from national patent offices, which is helping to reduce pendency times. Europe has benefited from this the most, seeing an increase in its patent grants by 54 per cent from 2002 to 2006.  This is due to the European Patent Office (EPO) issuing a number of Appeal decisions in recent years which have clarified the grounds for patentability of biotechnology inventions.
 
Gareth Williams adds:
 “Investment in biotechnology has been seriously challenged in recent years by a lack of regulatory certainty from the patent offices, particularly the EPO. It is therefore highly encouraging to see this surge in patent grants, as clarity is crucial for biotechnology to continue to attract vital capital. Hopefully, with the maturity that the industry is now displaying, investors may also start to see better return on their venture as biotechnology becomes more selective and commercial”.
 
Strong growth from Asia poses threat to Europe
The report also highlights the emergence of Eastern Asia as a major force to be reckoned with for Europe. Whilst filing activity in Europe is substantial, it is showing little growth other than from Denmark, which has trebled its filings, from 75 in 2002 to 225 in 2006.
 
Consequently, Japan is now the single largest filer outside of the US, having seen its filings rise by 250 per cent between 2002 and 2006. Of the fastest-growing patentees overall, the Japan Science and Technology Agency is the only organisation to challenge a list otherwise wholly comprised of US-based entities. The report also notes the emergence of China, which has grown its patent filings from almost zero in 2002 to around 50 in 2005.
 
In the context of East Asian growth, the report finds that talent migration is starting to affect the biotechnology sector. Whereas Chinese inventors historically operated outside of China, increasing alignment between China’s patent filing and its inventors suggests that China is now drawing back its home-grown talent. By contrast, Denmark’s growth in filings is mainly attributable to a large pool of non-Danish inventors.
 
Gareth Williams comments:
“The astonishing level of growth from Japan is indicative of its commitment to putting serious investment into the biotechnology industry to broaden its technological expertise. The single largest patent filer, the Japan Science and Technology Agency, is making a consistently large number of filings year-on-year. Looking ahead, it will be interesting to see the extent to which Europe and Japan retain their talent, or whether the talent migration we are already witnessing will start to define a new and important form of global competition within the biotechnology industry”.  

The Marks & Clerk Biotechnology Report 2007 receives endorsement from Professor Christopher Lowe, Director of the Institute of Biotechnology and Professor of Biotechnology at the University of Cambridge. He comments:

“I welcome the publication of Marks & Clerk’s report, not least the encouraging sign that the biotechnology sector is showing signs of maturity and more focused, strategic development. However, this maturity now needs to be acted upon at a European level, with greater commitment from venture capital and government to ensure that Europe remains at the forefront of this important industry. Europe still needs to overcome the gulf between its academic and corporate sectors, with the strong showing from Asia acting as a pertinent reminder that complacency cannot be afforded”.