Prof. Mei-Hsin Wang,PhD, LLM, DIC, CSci, CChem FRSC Intellectual Property Office ,

Graduate School of Materials Science National Yunlin University of Science & Technology

Current Progress on Patent Securitization

Current position: Associate Professor at Graduate School of Materials Science , National Yunlin University of Science & Technology, Taiwan Adjunct Professor at Overseas Chinese University, Finance & Economic Law department, Taiwan CEO of China BioMedical Technology Application Association, Taiwan Adjunct professor of HuNan University, Visiting Professor of XiangTan University Visiting researcher of Hunan Provincial Intellectual Information service Center Adjunct Researcher at Intellectual Property Research Center in Zhongnan University of Economics & Law, China Honorable member at Professional Technical Committee in ShangHai Executive Agents Association, China Researcher at Center of Intellectual Property Development at NanJing U of Science &Technology and Foundation of JiangSu High Education for Humanity and Social Science Previous experiences: Patent analyst & engineer in the JC IP Group LLC Adjunct Professor at Preston University for MBA Adjunct Assistant Professor at National Taipei University of Science & Technology, Molecular Science & Engineering Regulatory and Medical Affairs department manager, Product manager (Takeda, MSD, AstraZeneca…)

Prof. Mei-Hsin Wang

Association Membership & Academic history: CChem FRSC from Royal Society of Chemistry, UK Research Member of Cosmetic Society of Chemists, UK Chartered Scientist from British Council, UK • Academic committee of International Trademark Association Member of Licensing Executive Society, New Zealand; Korean Commercial Cases association; Intellectual Property Association Japan ;Society of Indian Criminology; American Chemical Society BSc at National Taiwan university, outstanding scholarship from the Ministry of Education, Taiwan LLM at SooChou University, Graduate School of Law PhD from Imperial College at University of London, DIC in Chemistry at Imperial College , UK Visiting Scholars at the United State Court of Appeals for the Federal Circuit, National Law University in

Jodhpur-India, National Law University in Dehli-India, Max Plunk Institute of Intellectual Property, Competition and Tax Law, Universite de Strasbourg-Centre d’etudes Internationales de la Propriete Intellectuelle,

N.D.Zelinsky Institute of Organic Chemistry in Russian Academy of Science

Major industries in Taiwan

Well known trademarks on high Tech products

Rank Amount Parties/Subject 1. 3.4 Billion USD Diabetes Product Portfolio R&D Collaboration

Bristol-Myers Squibb, AstraZeneca, Amylin Pharmaceuticals 2. 1.754 Billion USD Antibody Development Collaboration Using Duobody Technology

Janssen Biotech, Genmab 3. 1.5 Billion USD MP0260 & DARPin Products License & R&D Collaboration

Allergan, Molecular Partners

4 1.35 Billion USD R&D and Licensing Collaboration for GLPG0634 Abbott, Galapagos

5. 1.15 Billion USD Dual-Affinity Re-Targeting (DART) Products Collaboration Gilead Sciences, Macrogenics

6. 1.135 Billion USD Licensing Agreement for Daratumumab Janssen Biotech, Genmab

7. 1.1 Billion USD Dual-Affinity Re-Targeting (DART) Products Collaboration Servier, Macrogenics

8. 1 Billion USD Development and Marketing Agreement for Vintafolide Merck & Co, Endocyte

9. 1 Billion USD Antibody-Based Anticancer Drugs Development Collaboration Menarini, Oxford BioTherapeutics

10. 945 Million USD ASP015K Products Development & License Agreement Janssen Biotech, Astellas

Licensing-2012 top 10 pharmaceutical deals

Source: Current Agreements 29 January 2013/ Kevin Nachtrab©2013

LITIGATION

Polaroid v Kodak $873.2 million

IGEN v Roche $505 million

Hope v Genentech $500.1 million

Haworth v Steelcase $211 million

Hughes v Smith $204.8 million

P & G v Paragon $178.4 million

Exxon v Mobil $171 million

Sanofi Aventis Patent no:1085 Sanofi-Aventis Patent no:1015

Sanofi-Synthelabo

Patent no:793

Aventis Patent no:1180

HMR Patent no:250

Hoechst Patent no:9562

Marion Patent no:388

Roussel Patent no:1698

Rhone-Poulenc Patent no:2790

in total:15868

During Merger & Acquisition

INTANGIBLE V TANGIBLE ASSETS

03,0006,0009,000

12,00015,00018,00021,00024,00027,00030,00033,00036,000

2001 2002 2003 2004 2005

years

in m

illi

ons o

f euro

s Proprety,plant and

equipment

Goodwill

Intangible assets

VALUE OF INTENGIBLE ASSET

PATENT VALUE EXAMPLE Patent Issued Est Value ($) ASSIGNEE 6,517,866 Sertraline salts sustained released dosage forms

2/11/2003 1,797,722,689 Pfizer

6,500,987 Sertraline HCl Polymorphs抗憂鬱劑(提升情緒)，用在治療憂鬱症，情緒(妄想-. 強迫)失調，突然的慌張

12/31/2002 1,570,968,527 Teva

6,465,496心衰竭與肝腎相關疾病水腫及高血壓

10/15/2002 1,408,931,126 Teva

6,452,054止痛藥 9/17/2002 1,220,308,695 Teva 6,221,640單離酵素encoded t-RNA分離蛋白質製作抗體測試藥品

4/24/2001 1,294,927,644 Cubist美國

6,071,970 活化鈣離子通道新接受器位址治療神經性病變

6/6/2001 1,107,999,343 NPS美國

6,319,919 Galanthamine 衍生物治療愛滋海默症

11/20/2001 1,081,784,355 Syosset, NY (Bonnie davis)

5 610 034免疫球蛋白by Trichoderma 3/11/1997 1 071 288 767 Alko芬蘭

Based on “PatentValuePredictor”, 3/11/2004

SECURITIZATIONS ON BIOMEDICAL PATENTS BASED ON ROYALTY STREAMS

Company/University Product Amount

AstraZeneca Humira $700 million

New York University Remicade $650 million

Emory University Emtriva $525 million

Memorial Sloan-Kettering Neupogen/Neulasta $263 million

NPS Pharmaceuticals Sensipar $175 million

Alkermes Risperdal Consta $170 million

Yale Zerit $115 million

IP SECURITIZATION BY INDUSTRY Industry Issuance

$MM % of total issuance

Number of transactions

% number of transactions

Film 865 42 2 10

Music 446 22 14 70

Sport 315 15 1 5

Fast Food

290 14 1 5

Pharma 100 5 1 5

Apparel 24 1 1 5

Source: David Edwards in “From Ideas to Assets”, p. 605;

Principal and Interest

Proceeds of Bond Purchase

License Rights to Patents

Rights to Royalty Stream

Purchase Price of Royalty Stream

Royalty Payments

PATENT SECURITIZATION

Patent Owner/Licensor (ex: Yale University)

Licensees Ex: Bristol Meyor

Squibbs

Special Purpose Entity (Subsidiary of Licensor)

Ex: Royal Pharm

Investors (Bondholders)

Credit evaluation companies

Famous Securitization food chain

PATENT SECURITIZATION

• A new financial product: a new option for investors to broaden options for their investment portfolios.

•A simplified asset: investors only need to focus on the securitized patent, patent pool or royalty stream; there is less need to worry about the credit record, financial performance, operation or management of the IP owner.

•An asset with a risk management mechanism: the system provides a vehicle that shields the IP assets which have been securitized from the bankruptcy of the IP owner. The securitized IP is isolated from the owner, and there is a credit- enhancement mechanism.

Identification and investigation of the underlying asset

Monitoring asset management and services

Underlying asset transfer

Securities issuance and sale

The establishment of special purpose

Identification and investigation of the underlying asset

Credit Enhancement

Credit rating

KEY PLAYERS

Sellers Inventors Private Companies Research Institutions

Purchasers Private Equity Hedge Funds Investment Companies Focused on Royalty

Streams (e.g., Royalty Pharma)

General public

Benefits of the funding from Securitization

•Tax free: investment not income •Bigger amount comparing to loan: •Evaluated based not only on current but also future value •IP owner can still retain the right after the completion of securitization •Goof for start up or independent inventor not to losing all the right •Credit enhancement mechanism for better chance for success • Many purposes rather than just fund raising:

•prior launch promotion, •seeking for strategic allience, •dilution of the weakness from the inventor, •protection of investor (special purpose vehicle, bankruptcy remote control mechanism, risk management mechanism….

Traditional Loan process

Securitization process

Mortgages are resold to the investment banks, then repackaged for selling to general public

When investment banks receive the payment from debtors, then the general public will be paid back with

interest based on their contract

Investment Bank paid professional agency to evaluate the securitized assets

If the situation got worse, the insurance company will pay back

Insurances were bought for risk management of the securitized assets

REVIEWING THE VALUE OF IP 1. Understand IP: learn how this IP is different from other existing IP in the market. 2. Who are the current and future competing companies? 3. Where are the current and possibly future competing technologies? 4. How does the IP specifically add value? 5. What are the unmet market demands? 6. How to assess IP strength: How powerful is this IP compared to the existed IPs? 7. What is the possibility of invalidation by competitors? 8. How expansive is this particular IP, comparing to competing technologies, is it a

major advancement or minor adjustment? 9. Quality issues regarding how broad are the Patent claims. 10. Coverage of this IP regarding jurisdiction and where this IP is applicable. 11. What is the life cycle of this IP current stage? 12. Are there any policy government rules or political risks associated with the IP? 13. Identifying the market for IP: What is the market for the technical domain in the

specific jurisdiction. 14. What is the growth trend of the market? 15. What is the lifecycle of the IP? 16. Sensitivity of the estimations used in the model.

IP securitisation in Taiwan & China Patent as pledge In Taiwan, though under the policy – “Intellectual Property

Rights pledge for fund raising” in 2011 by Taiwan Economic Affairs, there is not much progress due to the lack of mature evaluation mechanism for IP and open/transparnt database for IP exchange information. Legislation on Patent securitization can be a motivation for future promotion.

However, in China, IP securitization is promising with government full support. China State Intellectual Property Office (SIPO) started patent securitization promotion from 2008, urged government banks to cooperate and support industry. There are 3399 items undergone IP securitization till 2012, the value is over 25 billion US dollars, with over 74% growth rate based on capital size.

HuNan IP office further announce the guideline of IP implementation and Patent securitization promotion, request JiaoTung Bank, ChangSha Bank and ChoShan Bank to provide funding for IP securitisation. http://news.sina.com.tw/article/20130426/9482118.html

Current progress on IP securitisation in China

China Policy support In 2010, SIPO announced the regulation for IP Securitization registration

system In 2012, there are over 6 provinces announced local regulation and

policies to promote IP pledge for fund raising. In 2012, there are 22 regions in china to implement IP pledge for fund

raising and IP investment services. Mar. 2013, SIPO coordinated with Bank Monitoring committee, National

Industry and Business Bureau and National Copyright office to announce the “guideline for IP Pledge in Business Bank”, under Bank monitoring document no 2013-6.

Trial Models Securitization on patent Securitization on patent combined with company share Securitization on patent combined with other assets

Current progress on IP securitisation in China Insurance

Dec 2011, SIPO authorise “China People Insurance company” to start IP insurance promotion and implementation.

Apr 2012, “IP execution insurance” was launched. BeiJing Zhuang-Guang-Tusn中關村 area is the trial area for 3 years.

In 2013, there are 20 area started the second trial period of IP insurance. ZhenChiang 鎮江 area achieved 107 cases to proof the success for future IP pledge promotion.

China Patent Analysis and Operation menu ware completed by China Technology Exchange institute, with the hope to be the world standard.

Country Strategy : SIPO signed agreement in 2011 with Business Bank, such as JiaoTong Bank to promote IP securitization, soon followed by local governments and many banks

June 2011, ChangSha fund the first IP investment and Pledge service union to support innovation and Ip implementation with convenient cash flow.

In 2012, there are more than 60 administration , technology and education organizations involved on IP securitization on agricultural technology.

More than 10 province, 5 independent economic area and 8 high tech parks are focus on supporting the IP with cash flow from Banks and investing agencies.

Current issues on IP Securitization in China Difficulties on pay back control from companies: Credit evaluation system

is not yet mature , therefore, the risk on credit evaluation is rather high Difficulties on monitoring during the securitization: inexperience on

monitoring and auditing of the whole implementation process realted to activities for IP securitization.

Insufficiency on IP evaluation: only 10 institutions with abilities to evaluate IP, demands are great but the servicers can not meet the needs.

Different from the developed countries- relatively smaller scale of capital but higher expanses on the prior securitization review process (credit evaluation, IP evaluation, securitization plan evaluation, technology evaluation, administration fee and servicer fees…etc,

securitization will create 10-30% cost higher than traditional loanwhich is normally 15% cost of traditional loan, and not much higher amount of capital received from securitization,

Banks in China are forced by government policy to pro IP securitization but limit the amount on each case which will hesitate IP securitization.

CASES STUDY

PATENT SECURITIZATION ON BIOMEDICAL PATENT CASES 1-1 BioPharma Royalty Trust with Bristol-Myers Squibb Co the licensee (BMS) will pay the royalties to the assignee on

the “Zerit ” patent (Yale University) during Aug., 2000; the credit totaled US$ 115 million,

including US$ 57.15 million in senior debt, US$ 22 million in mezzanine debt US $ 22.16 million in equity;

Standard & Poor’ report rated the senior debt single A in October 2000

Case was completed and the transaction could lay for future patent royalty securitizations

Royalties estimated based on the past track records from 1992 to 2000, with 24% compound annual growth rate

PATENT SECURITIZATION ON BIOMEDICAL PATENT CASES 1-2

The rating based on several foundations,: strong legal structure that segregates the revenue stream, credit support provided by subordinate debt and equity

investors, strength of the historical and projected performance of Zerit

patent royalty revenues, the AAA credit rating of Bristol-Meyers Squibb Co.- a leading

international pharmaceutical company. The underwriter/issuer of Biopharm Royalty Trust was Royal

Pharma AG and the senior holder was Westdeutsche Landesbank Girozentrale in London

PATENT SECURITIZATION ON BIOMEDICAL PATENT CASES 2-1

progress made on a pool of patents. Royalty Phamra Finance Trust closed a

securitization of US$ 225 million of variable funding notes, structured by Credit Swiss First Boston in 2003

with AAA rating by Moody’s and Standard & Poor’s, based on the insurance by MBIA Insurance Group and trustee by Deutsche Bank Trust Co. Americas.

This transaction is a three years revolving borrowing period with a seven years expected maturity, in combined with quarterly amortization.

PATENT SECURITIZATION ON BIOMEDICAL PATENT CASES 2-2 This vehicle issued securities including 13 drugs innovated

from various companies Genetech’s and Biogen Idec’s Rituxan, Celegen’s

Thalomid, Eli Lilly’s /Johnson & Johnson’s and Centocor’s PrePro, Centocor’s Retavase, Chiron’s TOBI, Norvatis’ Simulect, Roche’s Zenapax, Ligand’s Targretin Capsules, Memorial Sloan Kettering’s Neupogen/Neulasta, Organon’s Variza, Glaxo Smith Klemin’s and Adolor’s Entereg, Pfizer’s lasofoxifene, Wyeth’s Bazedoxifene),

all the listed companies are either prestigious biotechnology innovation companies or leading international pharmaceutical companies.

Clinical Trial Stage

阶段 Preclinical test

File IND

Phase I Phase II Phase III

File ND

A/B

LA

FDA approval Phase IV

Time frame（年）

~3.5 ~1.5 ~2 ~3.5 ~2 共10~15

purpose

Laboratory, animal test, safety, bioactivity

20~80 volunteers;drug safety; Phase II dosage

100~300 pts；potential toxicity、side effects

1000~ 3000 pts；confirme efficacy、long term side effect

Evaluation process审核程序

Post marketing suvelliance；adverse effect monitoring

IND passed

% 100% 70% 33% 27% 20%

Source: Pharmaceutical Research and Manufacturing Association

PATENT SECURITIZATION ON BIOMEDICAL PATENT CASES 2-3

Positive new opportunity: In Jan. 2004, a portion of Memorial Sloan Kettering Cancer Center’s royalty interest in Neupogen/Neulasta added US$ 263 million into the bankruptcy-remote vehicle and made US$ 7 million dollar investment into Royal Pharma.

Before this transaction, the royalty assets were owned by offshore, owned by Royalty Pharma AG,

at closing, the assets were sold to an Irish Trust, a new formed bankruptcy-remote Delaware business trust established for the purposes of securitization.

Nine of drugs were launched in the market in 5 years, patents expire between 2005 to 2015, this portfolio generated US $ 4.4 billion in sales and about US$ 49

million in royalty and contingent payment rights for Royalty Pharma AG in a calendar year.

The licensees of the contingent payment rights are a diverse group of investment-grade companies.

Neupogen/Neulasta

RITUXAN® (RITUXIMAB) Targeted B-Cell Therapy Rituxan® (Rituximab) is a unique therapy that selectively targets CD20-positive B-cells, shown to play an important

role in non-Hodgkin's lymphoma and rheumatoid arthritis. Rituxan continues to redefine B-cell therapy with more than 10 years of clinical experience and more than 1,000,000 patient exposures across approved indications. Our journey continues.

INDICATIONS AND USAGE Non-Hodgkin's Lymphoma

Rituxan® (Rituximab) is indicated for the treatment of patients with relapsed or refractory, low-grade or follicular, CD20-positive, B-cell, non-Hodgkin's lymphoma.

Rituxan® (Rituximab) is indicated for the first-line treatment of follicular, CD20-positive, B-cell non-Hodgkin's lymphoma in combination with CVP chemotherapy.

Rituxan® (Rituximab) is indicated for the treatment of low-grade, CD20-positive, B-cell non-Hodgkin's lymphoma in patients with stable disease or who achieve a partial or complete response following first-line treatment with CVP chemotherapy.

Rituxan® (Rituximab) is indicated for the first-line treatment of diffuse large B-cell, CD20-positive, non-Hodgkin's lymphoma in combination with CHOP or other anthracycline-based chemotherapy regimens.

Rheumatoid Arthritis RITUXAN® (Rituximab) in combination with methotrexate is indicated to reduce signs and symptoms in adult patients with moderately- to severely- active rheumatoid arthritis who have had an inadequate response to one or more TNF antagonist therapies.

WARNINGS Fatal Infusion Reactions: Deaths within 24 hours of RITUXAN infusion have been reported. These fatal reactions

followed an infusion reaction complex, which included hypoxia, pulmonary infiltrates, acute respiratory distress syndrome, myocardial infarction, ventricular fibrillation, or cardiogenic shock. Approximately 80% of fatal infusion reactions occurred in association with the first infusion

Patients who develop severe infusion reactions should have RITUXAN infusion discontinued and receive medical treatment.

Tumor Lysis Syndrome (TLS): Acute renal failure requiring dialysis with instances of fatal outcome has been reported in the setting of TLS following treatment of non-Hodgkin's lymphoma (NHL) patients with RITUXAN.

Severe Mucocutaneous Reactions: Severe mucocutaneous reactions, some with fatal outcome, have been reported in association with RITUXAN treatment.

Progressive Multifocal Leukoencephalopathy (PML): JC virus infection resulting in PML and death has been reported in patients treated with Rituxan.

THALOMID

MULTIPLE MYELOMA多發性骨髓瘤 THALOMID® (thalidomide) IN COMBINATION WITH DEXAMETHASONE IS INDICATED FOR THE TREATMENT OF PATIENTS WITH NEWLY DIAGNOSED MULTIPLE MYELOMA.

ERYTHEMA NODOSUM LEPROSUM結節性紅斑 THALOMID® (thalidomide) IS INDICATED FOR THE ACUTE TREATMENT OF THE CUTANEOUS MANIFESTATIONS OF MODERATE TO SEVERE ERYTHEMA NODOSUM LEPROSUM (ENL).

THALOMID® (thalidomide) IS NOT INDICATED AS MONOTHERAPY FOR SUCH ENL TREATMENT IN THE PRESENCE OF MODERATE TO SEVERE NEURITIS. THALOMID® (thalidomide) IS ALSO INDICATED AS MAINTENANCE THERAPY FOR PREVENTION AND SUPPRESSION OF THE CUTANEOUS MANIFESTATIONS OF ENL RECURRENCE. Celgene provides the System for Thalidomide Education and Prescribing Safety, (S.T.E.P.S.®), a proprietary education and restrictive distribution program for THALOMID® (thalidomide). Learn more about S.T.E.P.S.®

PREPRO (Anti-biotics) Stabilized Allisureallicin has now been formulated into an active product for treat

digestive and gut disorders®. PrePro powdered capsules contain 270 mg. of Allisure®. 5 strain probiotics, digestive enzymes and Inulinâ„¢ immune stimulating enhancer. These products have shown great promise in eliminating symptoms of I.B.S. (irritable bowel syndrome), H-Pylori (helicobacter pylori), candidiasis, parasites and colitis.

In addition to the above AllisureÂshows highly significant activity against M.R.S.A. Methacillin Resistant Staphylococcus Aureus. The mechanism of action of allicin may be due to inhibition of certain thiosulfinates with thiol groups. Allicin also displays extreme anti-viral activity.

Probiotics are a necessary part of optimal good health. PrePro is blended with probiotics and enzymes which are proteins that are broken down by stomach acid. This formula will aid with increased nutrient absorption. PrePro can help eliminate symptoms of indigestion, heartburn, reflux, diverticulitus, dysbiosis and provide increased digestive activity.

PrePro contains Allisure® allicin a formed stabilized Allicin extract. We are the only product that can GUARANTEE a 100% yield of active Allicin. NO transformation needs take place in your body unlike traditional garlic supplements. We DO NOT make false claims of Allicin POTENTIAL. Traditional garlic supplements are unlikely to produce any Allicin at all due to being inactivated by your own stomach acid. Allisure® has been proven by independent research to deliver results.

The quality of every batch is guaranteed using HPLC and a unique scientifically validated microbial assay that demonstrates every batch will KILL mutant drug resistant bacteria. (M.R.S.A.)

Here is the breakdown of Allimax PrePro:

Retavase is indicated for use in the management of acute myocardial infarction (AMI) in adults for the improvement of ventricular function following AMI, the reduction of the incidence of congestive heart failure, and the reduction of mortality associated with AMI. Treatment should be initiated as soon as possible after the onset of AMI symptoms.

Important Safety InformationBecause thrombolytic therapy increases the risk of bleeding, including internal bleeding (such as intracranial, retroperitoneal, gastrointestinal, genitourinary, or respiratory), Retavase should be used only in those patients for whom its use is indicated in the prescribing information (see "Indications" in the prescribing information). In addition, thrombolytic therapy increases the absolute risk of stroke, including hemorrhagic stroke, in patients of advanced age. Cholesterol embolism has been reported rarely in patients treated with thrombolytic agents. Coronary thrombolysis may result in arrhythmias associated with reperfusion (see "Warnings" in the prescribing information).

Targretin ® (bexarotene)-immune related skin disease

Targretin (bexarotene), Ligand Pharm

aceuticals,

口服維生素A

衍生物,

第三期.

Tazorac (tazarotene), Allergan,

美國測試中乾癬用藥

April 22, 2003

ulect (anti-resistance for organ transplantation

Simulect 最高行政法院判決 (轉載自司法院資料庫)

新睦樂與樂益新屬近似商標，兩商標圖樣皆為單純之中文，且皆有新、樂二字，外觀極相彷彿，異時異地隔離觀察，易使消費者產生混同誤認之虞。

【裁判字號】90年度判字第 1130 號【裁判日期】90/06/22【案由】商標註冊 【裁判全文】

最 高 行 政 法 院 判 決 九十年度判字第一一三○號 原 告 瑞士商．諾華公司 代 表 人 席拉．寶德摩 克利絲汀．比斯卻芙 訴訟代理人 林鎰珠律師

被 告 經濟部智慧財產局（承受原經濟部中央標準局業務） 代 表 人 陳明邦

右當事人間因商標註冊事件，原告不服行政院中華民國八十八年十月二十二日台八十 八訴字第三九一○一號再訴願決定，提起行政訴訟。本院判決如左： 主 文 原告之訴駁回。 訴訟費用由原告負擔。 事 實 緣原告於八十七年三月二十七日以「新睦樂」商標，指定使用於商品及服務分類表第五類之西藥商品申請註冊。被告以其商標圖樣之新睦樂與日商．山之內製藥股份有限公司之註冊第四九○二○號「樂益新」商標中文近似，且指定使用於同一或類似商品，乃依商標法第三十七條第十二款之規定予以核駁，發給第○二四五六六○號商標核駁審定書。原告不服，循序提起一再訴願，遞遭決定駁回，遂提起行政訴訟。

GSK-ENTEREG: 2008 年3月17 日 (PAIN KILLER)

GlaxoSmithKline受股票行市挫折，因發展夥伴Adolor Corp 的新腸藥物Entereg 懸浮試驗在對心血管風險的恐懼引起Adolor Corp 的股票行市崩潰。

GSK 撤出了對Entereg 其它階段臨床試驗的管理申請和並且中止一項研究

關於15 名癌症患者在OPD(out patient department)接受強止痛藥的試驗。

Adolor 暫停了Entereg申請研究患者使用於carpal tunnel syndrome operation的術後止痛。

GSK繼續準備對問題回應，美國FDA在11月授予了對Entereg有條件的認同作為一種治療手術後腸塞痛,用於其它類型腸混亂。

Adolor 股價直落了44% 到$7.69 ，在那斯達克更直落56% 到$3.90後關閉。

lasofoxifene (osteoporosis)

FDA refused to approve Pfizer’s asofoxifene，Oporia ...

輝瑞公司（Pfizer）9月13日表示，其收到了美國FDA就骨質疏鬆症治療藥拉索昔芬（lasofoxifene，Oporia）發的拒絕批准函。FDA拒絕批准輝瑞骨質疏鬆症治療藥拉索昔芬（lasofoxifene)

BAZEDOXIFENE (HORMONE REGULATOR) 惠氏製藥獲得FDA發出的第

二封核准信 12/24/2007 06:43am - 醫療保健 相關股價 NYSE:WYE 44.930 1.12

惠氏製藥Wyeth(NYSE:WYE,新聞,圖表)發佈消息稱，公司收到了美國食品藥品管理局FDA發出的第二封關於bazedoxifene的核准信。Bazedoxifene是一種選擇性雌激素受體調節劑，可用於防止婦女更年期的骨質疏鬆症。惠氏製藥表示，FDA要求公司提供更多有關該藥物的作用範圍以及靜脈内的血栓情況分析，並且對數據收集和報告程序作出進一步的解釋。

SECURITIZATION CASE 3 Cambridge Display Technologies (CDT) • http://www.cdtltd.co.uk/ • 1987 first patent filed (light-emitting polymers) • 1992 Cambridge co. created (seed) • 1996 First license agreements • 1997 US$ 10 million (series A) • 1999 US$ 133 m + US$ 16 m R&D • 2001 US$ 28 m (internal round) • 2004 NASDAQ flotation “OLED” (approx 150 employees) • July 2004 capital restructure of US$15 m in debt capital “CDT raised cash by collateralising its IP portfolio via a credit enhancement and

debt facility arranged through Lloyds TSB Bank and IPI Financial Services. In taking this route.

This case shown that it is possible for small companies with top-class intellectual property but few fixed assets to raise the money they need in order to grow. The CDT experience demonstrates that a strong IP portfolio not only can help a small or medium sized company operate successfully in a global market, it can also be a way into the financing so necessary for continued business growth.”

Source: “Intellectual property is a shareholder issue” Joff Wild (http://www.buildingipvalue.com/06intro/008_011.htm 2006)

SECURITIZATION CASE 4 Eli Lilly’ Semagacest at for Alzheimer's Disease: Securitization

through famous service provider and law firm the mentioned medicine was under a process of US 300 million

dollars monetization through TPG-Axon Capital Management, LP and NovaQuest to pay Quintiles, a world class clinical trial organization for two candidate drugs’ clinical trial fees.

For the 300 million US dollar, TPG-Axon provided 90% of development fund while NovaQuest provided only 10 % of the funding, backed by royalties and mile stones fees from three of Lily’s Alzheimer’s drug candidates

17Aug 2010 on Eli Lily’s website:[1] “Lilly Halts Development of Semagacestat for Alzheimer's Disease Based on Preliminary Results of Phase III Clinical Trials”, including the one through securitization due to stopped clinical trial.

[1] Eli Lily’s official website news on 17 Aug., 2010, http://newsroom.lilly.com/releasedetail.cfm?ReleaseID=499794

SECURITIZATION CASE 4 Eli Lilly is one of the top ten pharmaceutical companies, TPG-Axon Capital Management is a globally famous private hedge

fund-providing services to high net worth individuals, pension funds, and banking institutions, main interests in healthcare, pharmaceuticals, financial services, technology, energy, basic materials and retail.

NovaQuest is an unique value-added-resellers (VARs) and distributors, focused on small-to-medium enterprise customers to build upon company charter and improve experience for its customers, expertise involved in industrial equipment, life science, consumer goods, high-tech, ..etc.

After professional supervision and carful evaluation, biomedical product can still be out of market for unexpected medical outcome, even reached phase III trail (norally 95% success rate). This case demonstrated the needs for the complicated securitization mechanism, such as bankrupcy remote vehicals to resolve the unmet obligations and pooled assets security to provide higher guantees for buyer sides.

SECURITIZATION CASE 5 Securitization through litigated assets :Under Citigroup’s profound

knowledge for asset management and potential buyers assisted valuation, significant final interest was made and also created competition to expedite signing and closing. Emtricitabine (FTC) discovered and patented by Emory University , in 1996, licensed to Triangle Pharmaceuticals - later on, acquired by Gilead Sciences to complete development and market the product-approved by FDA on July 2, 2003.

FTC is a fluorinated version of lamivudine (3TC). FTC and 3TC are improved synthesis of BHC-189, which was licensed to

Burroughs Wellcome-later on acquired by Glaxo. Emory University filed a law suit against Glaxo, as Wellcome

misappropriated Emory’s inventors’ property and the IP as Burroughs Wellcome had used for their patent was from Emory university.

Glaxo refused to return clinical trial data conducted under FTC’s Wellcome’s licenses back Emory university.

Shire pharmaceutical also receive a FTC license from Emory university after lost a patent dispute.

SECURITIZATION CASE 5 BioChem pharmaceutical also developed similar technology,

patented and licensed to Glaxo, therefore, BioChem tried to invalidate Emory university’s U.S. patent

In US, patentability is based on first to invent rule, after 6 years litigation process and 40 attorneys involvement, the lawsuit and counter lawsuit were finally reach an agreement and settled.

Triangle pharmaceutical remain FTC license which commercialized to Gilead science after merger.

Glaxo and Shire received 3TC exclusive right from Emory university, Emory university and Triangle pay an undisclosed payment as the exchange of exclusive worldwide rights for the test data and FTC Intellectual property.

In the end, Emory university was able to maintain the rights for both 3TC and FTC.

This case was the largest sale of royalty interest in pharmaceutical sector till date, with significant interest from royalty investors, sponsors and hedge funds. Gilead’s stock went up about 3% , in value $625 million created for Gilead shareholders on the announcement day.

SECURITIZATION CASE 5 Feb – Sept 2004, Emory university internal discussions decided to monetize FTC

and/or 3TC royalty streams for securitization. Oct 2004 – Feb 2005: Emory university employed experienced financial advisor

Citigroup and Covington & Burling as outside legal counsel March – June 2005: Due Diligence process was conducted with various parties July 2005: Emory university conducted final negotiations in New York, sale

contracts with Amended and Restated License Agreement were executed. At the end of closing of the transaction, Gilead and Royalty Pharma paid Emory

university 525 million for all FTC royalties. In addition, Gilead also paid 15 million to for the amending and restating the license agreement to Emory university.

Regarding the 525 million, Gilead and Royalty Pharma will pay 65% and 35%, respectively, to Emory university and the Inventors within 30 days of closing date- July 21, 2005

Emory University and the Inventors may acquire interest in Royalty Pharma approximating 25% of the proceeds paid by Royalty Pharma in the transaction

Gilead obligated to pay to Royalty Pharma royalty revenue based on future FTC net sales.

IMPORTANCE OF LEGISLATION & GOVERNMENTAL MONITORING ON FINANCIAL DERIVATIVES

Ex: Ice land Greek Lehman Brothers in USA Asian culture

ICELAND FIANACIAL CRISE

Population 320K GOP: 31 billion USD 3 Privatized Banks lost 100 billion USD

without proper monitoring

Media never mentioned –those Billionaire used the money which were borrowed from the bank

EX: GREEK

•Goldman Sachs’ involvement to cover Greek’s financial situation in order to join EU •Oil gas resources

Lobby the US congress to free the monitoring of Financial derivatives

Politicians, Bankers and scholars

Consequensies

Will IP Securitization open an additional fundraising or

create more risk?

CURRENT DEBATES ON IP SECURITIZATION IN TAIWAN

Apply existed Financial Securitization Act

New IP securitization Act

Liability on Evaluation of Intellectual Property Rights

Implementation on Protection for investors

Regulation & monitoring mechanism, how to plan risk management

Government involvement on Monitoring IP securitization

Apply existed Financial Securitization Act : Arguments: Is the future royalty an asset? Bookkeeping for

accountants (off- balanced) How can a future licensing opportunity to be incorporated into

the current true value? How to present on balance sheet? How to deal with “True sale” issue? Need to amend certain definitions in existed acts, , such as

assets

New law: Difficulty to pass the new Act in the congress Awful situation in Legislation Yuan, Taiwan Even students can take over Legislation Yuan-Democracy or

shame?

Legislation proposal in Taiwan:

Chapter 1 defines how securitization shall be dealt and the parties involved with the responsible authority in the government.

Chapter 2 interprets the special purpose trust, including the details of the securitization plan and special purpose trust in Articles 9-14, how to issue beneficial Securities and transfer the securities in Articles 15-22,

beneficiaries meetings in Articles 23-27, trustee supervisor in Articles 28-33, obligations for trust in Articles 34-35, management of special purpose trust and tax in Articles 36-42, alternation and termination of special purpose trust in Articles 43-53.

Chapter 3 is related to special purpose company, the general principal in Articles 54-55, how to set up a special purpose company in Articles 56-58, rights and duties for shareholders in Articles 59-61, organization of special purpose company in Articles 62-72, securitization plan in Articles 73-74, how the securities shall be issued and traded in Articles 75-82, conveyance and management of the assets in Articles 83-84, business scope of the special purpose company in Articles 85-90, the accounting of the special purpose company in Articles 91-94, alternation and liquidation of the special purpose company in Articles 95-101.

Chapter4 concerns the credit rating and enhancement in Articles 102-104. Chapter 5 is about the monitoring in Articles 105-107. Chapter 6 mentions the punishment for violating the law in Articles 108-117. Chapter 7 governs the attachment in Articles 108-117.

Taiwan Finance Asset Security Act

Chapter 1 defines general provisions in Articles 1-5. Chapter 2 clarifies the real estate investment trust: including section

one- public offering and private placement of Real Estate Investment Trust (REIT) Funds in Articles 6-16; section two-utilization of Real Estate Investment Trust Funds in Articles 17-25; section 3-accounting of REIT funds in Articles 26-28.

Chapter 3 elaborates the real estate asset trust in Articles 29-36. Chapter 4 sets forth the issue, delivery and transfer of beneficial

securities: including section one-issue, delivery and transfer of beneficial securities in Articles 37-46; section 2-benificiaries’ meetings and trust supervisors in Articles 47-48.

Chapter 5 is about the taxes and relevant matters in Articles 49-53. Chapter 6 concerns about the administrative supervision in Articles

54-57. Chapter 7 mentions the penalty provisions in Articles 58-65. Chapter 8 is the supplementary provisions in Articles 66-68.

Taiwan Real Estate Securitization Act

The main parts of the Finance Securitization Act are the chapter 2 special purpose trust and chapter 3- Special purpose company.

Under the Finance Asset Securitization Act, a special purpose company is a limited liability company, it is only acting as a mediator for the specific securitization, therefore, the design is different from the traditional companies set up under the Corporate Act, but within a simple and flexible scale.

In addition, this special purpose company is also required to be

free from the risk of bankruptcy and only the business related to this specific securitization can be allowed. Furthermore, the management board shall be independent to avoid the influence from the originator and the risk of money washing purposes.

Discussions:

The important task shall be how to fulfill the true-sale between the originator and the special purpose company.

In the Clause of the Real Estate Securitization, the main purpose is to further develop economics and improve the liquidity of real estate by an innovative fund-raising channel.

How to design the securitization, the detailed process with guidelines, the administration and application of the raised funding, accounting and information disclosure, government involvement for protect the investors are all well-defined.

If IP securitization is approved to be legislated, there is already the legal frameworks to be followed.

Discussions:

CURRENT MYTH IN TAIWAN IP evaluation IP right issues:

IP Quality IP life cycle generic competitions, emerging technology…

Patent troll Competition Law issue Legal instability: compulsory licensing However…. implementation based on good faith is

important Legal framework Protection Mechanism Government involvement

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MY NEXT STEP?

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FOR WHAT WE FIRMLY BELIEVE.