BioWorld International Correspondent
LONDON - The quoted technology management company BioFusion plc sealed its second deal, agreeing to a 10-year contract with Cardiff University, which will see it taking ownership of seven spinouts and setting up a £8.2 million (US$16.2 million) fund to invest in these and future start-ups.
At the same time, the company raised £7.5 million in a placing of about 5.3 million shares at £1.45 pence per share.
Cardiff is the UK's seventh ranked research university, with an estimated research and development budget of £1 billion over the 10-year life of the agreement.
In return for granting BioFusion 10 years of exclusive access to the intellectual property it generates, Cardiff will receive a stake in BioFusion worth about £17 million.
David Baynes, CEO of BioFusion, told BioWorld International that the deal demonstrated the attractions of the BioFusion model for commercializing university IP. "In effect, it is a way to float the IP portfolio, by taking a stake in us as a public company."
The vice chancellor of Cardiff University, David Grant, agreed, saying, "The model is an extremely attractive one, making the university a significant shareholder in BioFusion, providing access to BioFusion's investment funds and management team, and also incentivizing academic researchers through significant shareholdings in the spinout companies."
The agreement with Cardiff builds on an identical partnership with the University of Sheffield and means that UK-based BioFusion now has 21 companies.
Although there has been interest in the company's commercialization model from universities in mainland Europe and the U.S., Baynes said it was likely to be some time before BioFusion looks to complete another deal.
BioFusion has the right to commercialize all of Cardiff's research-generated IP for 10 years and initial ownership of 100 percent of all future Cardiff portfolio companies. In return, the university will receive about 11 million shares, plus about £180,000 of the money raised in the placing and re-imbursement by BioFusion of up to £80,000 of costs incurred in setting up the agreement.
The university's technology transfer arm, UC3, which has a pipeline of 134 projects with commercial potential, will continue to operate, as will the Cardiff Partnership Fund, a £4 million seed fund set up by the university in 2000. In the future, the fund may provide proof-of-concept financial support for early stage projects prior to them being considered as potential new BioFusion portfolio companies.
The companies acquired by BioFusion as part of the deal include Abcellute Ltd., which is developing a cell-stabilizing platform for the preservation and transport of live organ-derived cells without freezing them and with no loss of viability or function; Art of Xen Ltd., which holds a number of patents and patent applications for delivery systems for the anaesthetic Xenon and is developing the noble gas as a potential neuroprotectant; and Cardiff Protides Ltd., which is developing a platform technology for enhancing the intracelluar delivery of nucleoside compounds.
Although some of the companies have turnover, Baynes said none of them represent immediate exits. "Based on our experience in Sheffield, we will need two to three years to progress them."
Within the first year of the deal, Baynes hopes to set up three further companies, but he said it is unlikely that BioFusion will complete another university agreement for some time. "We need to settle down the 21 companies that we've got."