Business and Service Overview

1
Food Drink Innovation Network Creating an
Intrinsically Innovative Company Emma
Hughes Managing Director, yet2.com Europe Ltd
2
yet2.com open innovation, technology transfer
and patent trading company.

• 10 years of experience in supporting companies
  develop their business through Technology
  Transfer and IP transactions.
• Yet2.com bridges the gap between industry needs
  and sources of innovative technology. Trusted
  advisors and experts.
• Global cross industry and relationship based
  network. Yet2.com offices in US (Boston), Europe
  (UK, Liverpool) Asia (Japan, Tokyo)
• Expert Hands on Professional Services Proven
  Experience in -
• Technology and Technology Needs Identification /
  Prioritization
• Technology Scouting, Acquisition Open
  Innovation Strategy
• Technology Licensing
• Patent Trading

? yet2.com Inc, 2009
Page 2
3
Example Members
Advisory Board inc AGFA, Avery Dennison, Bayer,
DSM, DuPont, Philips, PG, Takeda
? yet2.com Inc, 2009
Page 3
4
Open Innovation - Internal External Activities
Chesborough - well known but what does it
actually mean for your company?
5
Implementing an Innovative Culture Getting
Started

• Define what innovation means for your company.
  Question perceptions of open innovation
  internally
• Various organization structures funding,
  internal v external, central scouts v integrated
  within BU. Inherent tension
• Creating an intrinsically innovative culture
  needs to be strategic across all levels (top
  management, project and individual)
• Requires mid and long term innovation initiatives
  - Review IP strategy
• Requires committed finances and resources
• Look at internal, existing processes AND external
  scouting activities

? yet2.com Inc, 2009
Page 5
6
Open Innovation Company Challenges

• Trying to change company culture is an ongoing
  common problem
• The right resource and a budget is required
• Reallocation of budget for external
  collaborations
• Easier to spend internal resource than cash
  outside
• Who evaluates?
• IP issues contamination, NDAs
• Lack of modern communication media next
  generation has different view to openness (its
  not everything!)
• Defining the real needs of the company needs
  clarity
• What solutions are internal,
• When in the process do you look externally
• How do you articulate the real problem
• What tools and when!

7
Open Innovation Requirements
COMPANIES UNMET NEEDS COMPANIES UNMET NEEDS
Missing feature / performance issue / legislation change Improve an existing product
Improve price Reduce cost / identify manufacturing efficiencies
Step function change in performance Monitor next generation technology curves
Wholly unmet need Expand into new white space
8
External Technology Acquisition Program

• External Innovation - building on existing
  capabilities competencies within the
  company.
• WFGM Practice-
• Identifying Needs/Articulating/Prioritizing
• Tools, Sourcing Marketing
• Screening / Engaging/ Closing deals
• Implementing / Integrating

9
Process Example- Techneed Identification

• Guided Techneed discussion session
• Involve RD and Marketing/Business professionals.
• In house OI or technology leaders eg Dupont or
  external consultants
• Data Collection
• Need-Prioritizing Tool produces a collection of
  technology needs in template format, create
  tangible inventory.
• Build corporate innovation support network and
  illustrate potential of external tech acquisition
  internally
• Acquisition Option Recommendations
• Place technology needs into action-oriented
  groups through Triage process, using proprietary
  methodology.
• Understand what should be solved internally,
  sourced externally, needs partnering
• Prioritization
• Small-group Triage to set priorities that will
  most impact key business drivers
• Team consensus to BU leadership decision makers
• Ensure strategic direction what links to
  company competency and strategy, understand
  business strategy

10
Considerations for Technology Needs

• Urgency
• Current Status of impacted products
• Risks of not solving
• External Development Factors
• Known solutions
• Known IP Positions
• Uniqueness of solution(s)

• Financial Impact
• Benefit of solving the need
• Size of affected revenue streams
• Cost/Effort to Implement
• Internal Capabilities available to develop v
  implement

11
Technology Needs Prioritized
Highest rated Needs for both Urgency and
Financial Impact, across 4 BUs.
Apples to apples comparison enabling
prioritizing across the company
12
Internal v External

• New technology or existing solution in another
  area, start up business or established partner.
• Research Tools
• Patent mining, publications, company news,
  research papers etc
• Internal Sourcing Tools
• Customers, suppliers, business partners, lab
  networks, internal experts
• External Sourcing Tools
• Brokers, consultants, technical experts, online
  networks

13
Why use an innovation broker?

• Unique insight in to cross industry open
  innovation best practices
• How are other companies organising for Open
  Innovation
• What is required internally before working
  externally
• What skills resources are required
• What processes and tools are available (ID,
  prioritizing, articulating)
• Experienced practitioners with diverse cultural
  and industrial sector collaboration experience
• Network beyond your own
• Real Market Knowledge of who has what
• Deal experience what works what doesnt

14
How an innovation broker can help.

• Implementing a strategy and process (review best
  practice)
• Gathering understanding of what you need -
  external perspective tools
• Articulating that need to the outside world -
  confidential description
• Marketing to a broad network networks beyond
  your own
• Scouting evaluating external solutions key
  questions
• Increasing speed to engagement - existing
  relationships
• Understanding expectations and differences across
  diverse companies
• Flexible entrepreneurial deal facilitators
  understands nuances

15
Technology Need Retain anonymity
16
Why use other networks brokers?

• OTHER NETWORKs
• Regional and subject expertise beyond comfort
  zone
• Geographically broad
• Solutions from other industries
• Direct access to a large population of SMEs
• Broad reach to universities/research institutions
• Connect through private equity
• Network of affiliated brokers

• YOUR NETWORK
• Suppliers
• Select university relationships
• Conferences/trade shows
• Industry journals

Quality Diversity of the networks that is
important. A constant stream of good ideas
relies on forming great external connections
17
Key value add of Innovation Brokers

• Connectivity
• Deep reach into corporate technical staffs not
  just size of network but diversity and
  relationships
• Access to key gatekeepers (tech transfer tech
  acquisition)
• Relationships with venture capital and SMEs
• Confidentiality
• Opportunity screening and initial discussions
• Protect client name and application
• Expertise
• Support best practice and upfront preparation
• Evaluation and communication methods
• Market and buy-side knowledge
• Business formation and commercialization skills
• External perspective
• Unbiased evaluation and critical thinking
• Understand nuances between different types
  organisations
• Flexible in what a deal looks like

18
Company Best Practices intrinsically innovative

• Look at defensive use of Open Innovation dont
  get to end of a project and find youre already
  in competition with someone else
• Change IP strategy to support open innovation
• Peer reviews integrate alumni of the company
• Not just about looking outside develop existing
  suppliers and educate sourcing resource
• Implement a process to identify and review (WFGM)
• Incorporate internal and externally sourced
  technology within projects reward both
• Use new innovative and varied communication media
  to engage all the organisation

19

• Thank you
• For further details please contact
  ehughes_at_yet2.com
• 0151 705 3540

20
Appendix
? yet2.com Inc, 2009
Page 20
21
Yet2.com.Experts in Bringing all the Pieces
Together
Global Market Knowledge
Technology/IP
Yet2.com
People Experience
Capital
22
yet2.com links Ganeden BioTech to DSM
Ganeden BioTech Developer of a highly efficacious probiotic (microbial digestional aid), which is sold through retail drug stores and supermarkets and can be incorporated into foods and beverages
DSM Holds leading positions in the Nutrition sector, particularly the markets for ingredients for human and animal nutrition and health and personal care
Purpose May enable many new probiotic applications in both food and feed that DSM wants to follow closely as an area of potential future business
Deal Size DSM joined a private equity partner in a 12 million financing round
Date November 2007
HIGHLIGHTS SINCE TRANSACTION
HIGHLIGHTS SINCE TRANSACTION

• Ganeden products were featured on Oprah Winfreys
  syndicated radio program in November (as a result
  of an introduction from rede4).
• DSM evaluating possible future partnering with
  Ganeden for the development of specific
  applications

? yet2.com Inc, 2009
Page 22
23
Yet2.com links ElectroPetroleum to Customers and
Raises 10 Million
ElectroPetroleum (EPI) developed a technology to
extract heavy oil. 2/3 of the worlds oil
supplies are heavy oil, so this technology has
broad implications. The technology uses 1,000
watts of DC electricity to heat the oil and cold
crack it. The technology competes favorably
with steam and an AC technology. Field tests
showed a 10 times improvement in oil output per
well at a cost of 4 per barrel. October 2007 -
EPI retained yet2.com to find partners and
capital. July 2008 - Yet2.com got 3 term
sheets for investment and closed a 10 million
round from DFJ Element. Yet2.com also sourced
the first customer, Deloro, who gave EPI 10 of a
63 million barrel field.
? yet2.com Inc, 2008
? yet2.com Inc, 2009
Page 23
Page 23
24
IP-based Spin-out NaturNorth auction
NaturNorth Subsidiary of Potlatch maker of IP-protected bioactive birch bark-derived materials for pharma, ag, cosmetics, paints. Derived from birch bark
Buyer Small Pharma company in clinical trials for a new formulation with a NaturNorth derivative as a key ingredient
Purpose Couldnt afford to switch/re-qualify supplier in the midst of Phase III trials, and greatly strengthened their monopoly through acquisition of 30-patent portfolio
Deal Size Winning auction bid was 7-figures, with several other bidders lined up ot buy non-critical patent families for 6-7 figures
Date February 2008
And, a Library of 1000 Derivatives
Outer bark unique chemistries yield pure Betulin
? yet2.com Inc, 2009
Page 24
25
Yet2.com links Axela Biosensors Inc. and
Kimberly-Clark on biosensors deal
January 11, 2006 Axela Biosensors has
completed a significant exclusive in-licensing
agreement with Kimberly-Clark. The agreement
includes exclusive rights to approximately 150
world-wide patents and applications, as well as
transfer of significant immunodiagnostics assay
technology. As part of the agreement, K-C will be
acquiring an equity interest in Axela. These
technologies are are a significant contribution
towards our execution of product offerings in the
diagnostic market, including our Diffractive
Optics Technology (DOT) products planned for
product launch in 2006 said Rocky Ganske, CEO,
Axela Biosensors.
August 2006 Axela launches new real-time
analytical device (8 months from deal).
? yet2.com Inc, 2009
Page 25