How Toronto General Hospital Balances Innovation and Commercialization with Nearly CNY 300 Million R&D Investment in 2021

Public opinion on Canada’s healthcare system and environment is mixed. While the policy of free healthcare helps address access to medical services, the severe imbalance in the allocation of medical resources has caused considerable concern among Canadians.

However, this does not diminish Canada’s significant position in the global healthcare system. According to the “2021 World’s Best Hospitals” ranking released by the authoritative media outlet Newsweek,Four Canadian Hospitals Ranked Among the Global Top 100, whereinToronto General Hospital(“Toronto General Hospital”) ranks fourth, followingMayo Clinic, Cleveland Clinic, Massachusetts General HospitalAfter the “Big Three,” it is the only non-U.S. hospital among the top four.

This is no easy feat, as institutions on this prestigious list must not only possess first-class clinical service capabilities but also demonstrate significant achievements in medical innovation and translation.

For example, the one ranked firstMayo Clinic, it has incubated nearly140,000 Medical Innovation Achievements, and currently there are12,000+ Innovative Technologiescurrently in the research and translational stage; followed by the second-rankedCleveland Clinic, it successfully commercialized an innovative project in 202092 cases, attracting over $1.3 billion in investment;Finally, the third-rankedMassachusetts General Hospital is the largest research hospital in the United States., boasting the largest hospital-based research program in the United States, with annual revenue from innovation and translation accounting for one-quarter of the hospital’s total revenue.

What achievements has the University Health Network, which follows closely behind, made in innovation and translation? To uncover the answer to this question,VCBeat Orange BureauConducted in-depth analysis.

Toronto General Hospital, founded in 1812, is the flagship institution among the five hospitals of the University Health Network in Canada.

As its logo suggests, the three profile silhouettes each face one of three commitments—Patient Care, Medical ResearchandMedical Education, they are connected like leaves, forming a coherent circle, symbolizing collaboration and completion.

First, in patient care, that is, clinically, Toronto General Hospital boasts numerous specialists in internal medicine and surgery, with its emergency department aloneIt receives more than 30,000 patients annually.

In addition, Toronto General Hospital is alsoThe Largest Organ Transplant Center in Canada and Even North AmericaIt is reported that the hospital ranks first in North America in the number of multi-organ transplants, performing 639 transplant surgeries in 2017 alone. The large volume of real-world cases has not only validated its clinical capabilities but also provided a substantial foundation of primary data for scientific research.

Then, in the realm of medical research, or scientific research, Toronto General Hospital has been ranked as Canada’s top medical research institution for 11 consecutive years by the renowned consulting firm Research Infosource, and it is alsoCanada's Largest and Best-Funded Research Institution. According to publicly available statistics, Toronto General Hospital's research expenditures reached $480,000 in 2020, an increase of nearly 20% from the previous year.

Finally, in terms of medical education, Toronto General Hospital is affiliated with the University of Toronto, a globally renowned university.Train thousands of medical graduate students and postdoctoral fellows annually, the vast majority of whom are active in academic and clinical medical fields, providing ample physician resources for Canada and even the whole of North America.

Just as we previously analyzed Mayo and Cleveland, “"Clinical-Research-Education"The innovation incubation system is no longer a secret; over nearly half a century of practice, it has been proven to be the most efficient operational model for healthcare institutions focusing on innovation and incubation. However, the key to maximizing value between innovation and commercialization lies in the healthcare institutions’ own execution capabilities and their understanding and insight into the market.

For Toronto General Hospital, which is already positioned on this innovation and translation continuum, how exactly does it deliver innovative outcomes under a standardized model?

In 2021, which has just concluded, Toronto General Hospital delivered a satisfactory performance in innovation and translation.

According to official data, Toronto General Hospital had a total of80 intellectual property disclosures, 147 patent applications filed, 123 licenses, options, and glossaries signed, 368 material transfer agreements executed, with research funding reaching CAD 49 million (approximately RMB 240 million).

These figures collectively underscore Toronto General Hospital’s success in innovation and translation, which is closely tied to its emphasis on and understanding of the market. Unlike most healthcare institutions, Toronto General Hospital’s technology transfer process constitutes a conceptualizable, sustainable cycle, namelyLicensed products on the market help fund future research and innovation.。

How should this be understood? Specifically, inOffice of Technology TransferWith the assistance of this functional department, the research translation pathway at Toronto General Hospital can be broken down into the following 10 steps:

Step 1 is research, namely by triggering new discoveries and inventions through observation and experimentation in research activities. In the early stages of research, the hospital established an Innovation Acceleration Fund, stipulating that each proposal could receive up to $250,000 in funding, thereby helping to alleviate financial pressures for inventions with innovative potential during their initial phases.

Step 2: Intellectual Property Disclosure, marking the beginning of the technology transfer process. Ideally, if the invention has not been disclosed or presented to audiences outside the University Health Network (UHN), the inventors need only submit an online disclosure form that comprehensively describes the novel aspects of the invention, including the key solutions it offers and its advantages and benefits over existing technologies. If the invention has already been disclosed, the inventors should promptly contact the Technology Transfer Office for further discussion; in certain cases, patent protection may still be obtainable.

Step 3 is evaluationThe Technology Transfer Office first reviews invention disclosures through patent searches, then analyzes their market and competing technologies to assess the commercialization potential of the inventions. Following a rigorous evaluation, a licensing strategy can be formulated, including whether the discovery will be licensed exclusively or non-exclusively, or whether it will be licensed for different fields of use.

Step 4: Intellectual Property Protection. Since the costs of patent applications are borne by Toronto General Hospital itself, but not all invention disclosures are eligible for patenting, the Technology Transfer Office must carefully evaluate the commercial potential of each invention before entering the patent commercialization process, and propose two sets of solutions based on its assessment.

The first set targets inventions with commercial potential. The Technology Transfer Office collaborates with dedicated attorneys to seek patent protection for these inventions. However, since it is sometimes necessary to initiate patent applications before securing a commercialization partner (licensee), the Office seeks creative and cost-effective ways to obtain early protection for as many promising inventions as possible.

Conversely, for inventions with limited commercial potential, it is advisable to pursue other common forms of intellectual property protection, primarily copyright and trademark. Furthermore, unique biological materials and software can often be successfully licensed even without formal intellectual property protection, thereby achieving the objective of safeguarding the invention.

Step 5 is marketingAt this stage, the Technology Transfer Office is dedicated to promoting inventions to companies that may be interested in their commercialization. It first collaborates with inventors to jointly create a marketing overview of the technology, then identifies and contacts candidate companies—i.e., potential licensees—that possess the necessary expertise, resources, and business partnerships to bring the technology to market.

Step 6: Select the Optimal Licensee. After promoting the invention to the market, the Technology Transfer Office will attract multiple licensees interested in licensing. At this stage, the office should adhere to the principles of fairness and impartiality by granting non-exclusive licenses or field-of-use licenses.

However, if the needs of all licensees cannot be met, the Technology Transfer Office will license the invention to the company that demonstrates the greatest commitment and capability to bring the technology to market.

Especially when dealing with start-ups, given that the invention will be sold to other potential licensees who may be interested in its commercialization, the Technology Transfer Office requires start-ups to provide a viable plan for the commercialization of the invention in order to obtain a license, and must demonstrate the ability to raise investment. However, if launching a new enterprise is the best option for commercializing the technology, the office will also negotiate with representatives of the company to grant a license to the new company.

Step 7: Licensing, i.e., after negotiations with the licensee, the Technology Transfer Office executes the licensing agreement. These agreements grant companies certain rights to invention disclosures in exchange for financial and other benefits. Notably, option agreements are sometimes used to allow companies to evaluate the technology within a limited period before entering into a formal licensing agreement.

Step 8 is Commercialization. Since most research inventions are in the very early stages, further research and development efforts are required before they can be brought to market; therefore, licensee companies typically invest significant time and capital to commercialize products or services. Throughout this process, the Technology Transfer Office provides support in regulatory approval, sales and marketing, customer support, training, and other activities.

Step 9: Royalties. As consideration for the license grant, royalties include cash and equity received from the licensee. After receiving royalties from the licensee, the hospital distributes them equally between the inventors and the hospital in accordance with its policies, to fund additional research and operations.

Step 10 is reinvestment, which will be returned to the hospital as royalties for reinvestment, jointly fostering invention and creation by the next generation of researchers and innovators.

From an overall perspective, the Technology Transfer Office (TTO) provides comprehensive support to innovative projects throughout the entire commercialization process, accompanying them from inception to maturity. Specifically, in the early stage, the TTO is responsible for ensuring the “security” of the outcomes; in the middle stage, it engages with enterprises to identify potential partners; and in the later stage, it facilitates the equitable distribution of proceeds, ensuring that each link in the innovation chain receives commensurate compensation.

Among these, the most significant highlight lies in the “reinvestment” model of Toronto General Hospital, which has unlocked and unleashed greater innovative potential on the hospital side, further enabling a sustainable development pattern characterized by a virtuous cycle in both clinical practice and scientific research.