Presentation for "Driving Open Innovation in Food, Drink & Nutraceuticals" Conference London, 16-17 April 2013

1. Exploring the big picture of open innovation –
concept, approach and value
Marcelo Bravo
Oxford PharmaScience Group Plc

2. What is Open Innovation?
Is it just a buzz word or are there tangible
results?
Why should you do it?
What can you learn from open innovation in
other industries? i.e. pharma

3. "Open Innovation is the term that refers to
the current thinking that companies cannot
afford to rely entirely on their own research,
but should instead buy or license processes
or inventions from other companies. In
addition, internal inventions not being used
in a firm's business should be taken outside
the company."

4. - Transfer your inventions or other assets
externally, i.e. opensource
- Collaborate with a range of partners to
innovate, i.e. consortia
- Crowdsource innovation
- Crowd-outsource innovation
- Collaborate with a range of competitors to
innovate

5. “Open innovation is the use of purposive inflows and outflows of
knowledge to accelerate internal innovation, and expand the
markets for external use of innovation, respectively. [This paradigm]
assumes that firms can and should use external ideas as well as
internal ideas, and internal and external paths to market, as they
look to advance their technology.”
Henry Chesbrough, Open Innovation: Researching a New Paradigm
"...Companies can no longer keep their own innovations secret unto
themselves; ... the key to success is creating, in effect, an open
platform around your innovations so your customers, your
employees and even your competitors can build upon it, because
only by that building will you create an ongoing, evolving community
of users, doers and creators."
Randall Rothenberg, editor, strategy+business (published by Booz
Allen Hamilton)

6. Open Innovation is about bridging internal and external resources via
collaboration at any point in the innovation process.
• highly effective use of connections and networks to exchange
knowledge, expertise and ideas
• external partners being involved at any stage, not just idea
generation
• equitable win-win business relationships where issues are tackled
together
• openness towards new business models to maximise the value of IP
and other assets
Stevenage Bioscience catalyst

7. Is it just a buzz word or are there tangible results?
Open Innovation Choices –
What is British Enterprise doing?
Andy Cosh and Joanne Jin Zhang, June 2011
(sample of c 1,200 UK business with up to 999
employees between June 2010 and November 2010)

8. Traditional companies: those that made no
external transfers, had few formal collaborations
and were in the bottom half of firms in terms of
their use of external knowledge.
Hunting‐cultivating firms: had made no external
transfers, but had engaged in external sourcing of
knowledge and in formal collaborations more
actively.
Ambidextrous firms: those that had transferred
knowledge and technology externally, but were
found to also have engaged in hunting and
cultivating

12. Why should you do it?
Companies that leverage OI innovate more
and grow more, significantly more.
In some industries, i.e. pharma, OI is essential.

13. Pharma industry facing a triple curse...
Time to market...10+ years (IP life is only 20
years)
Cost... $1bn+ expense of bringing a new drug
to market
Risk…at Phase 1 a drug has a 91% chance of
failing
OI Reduces risk and increases efficiency –
ultimately increasing the bottom line

14. A day in the Life of the Pharmaceutical
industry
The pharma/biotech symbiosis
A deconstructed value chain..networks
An industry geared for partnering

15. OI in the Pharmaceutical Industry
Big Pharma companies in symbiosis with smaller
biopharma.
Funds that can would normally be spent internally
are instead spend externally via partnerships or
acquisitions.

16. Pharma
Company
Biotech
Patient
/PayorBiotech
Biotech
Biotech
Biotech
Biotech
Pharma
Company
Pharma
Company
Biotech
Biotech
Biotech
Biotech
Biotech
Biotech
But it is much more complex than this..

17. A Deconstructed Value chain
CRO’s
CMO’s
Pharma
Companies
Regulatory
Consultancies
Market Access
Consultancies
R&D/Clinicaly
Consultancies
Universities
R&D
Institutions
Drug
Delivery Cos
Biotech Cos
CSO’s
Patient
/Payor

18. Partner, Partner, Partner
Big Pharma geared up for partnering
Partnering Industry
- i.e. Bio speed-dating conferences, PLX, etc
New Models
- Consortia
- OI catalysts (ie Stevenage Bioscience catalyst)
- Crowdinnovating (i.e. Marblar)

31. Emerging business models for Pharma
“What competes in the market place is the
network of cooperating companies”
- Partners with complementary capabilities
that meet the needs of the market being
addressed
- Shared interest
- Cultural diversity…cultural tolerance
(Professor Brian Smith, SDA Bocconi)

32. Open Innovation?
Unusual Business?
Business as Usual.. in a rapidly changing
industry

33. Thank You
marcelo.bravo@pharmascience.co.uk
marcelo@dreamdesignsurf.com