BioWorld International Correspondent
LONDON - Oxford University struck a £12 million (US$22 million) deal with hedge fund Sloane Robinson Group to fund construction of its new Institute of Biomedical Engineering (IBME) and promote commercialization of research carried out there.
The agreement also involves providing assistance with technology transfer, including further equity investments in start-ups, in return for a half of the university's holding in any company spun out from the institute and a share of the profits.
The technology commercialization elements of the deal are similar to other agreements struck by UK universities, such as those set up with the quoted companies Amphion Innovation plc, IP Group plc and Biofusion plc. But this is the first time a hedge fund has become involved directly in the area of biotech investing.
Sloane Robinson Group, a £10 billion London-based firm, made the investment through SPRE, its independent private equity arm. The deal will be managed by Technikos, a new legal entity set up by SPRE to focus on investments in academic institutions.
Fred Cornhill, director of IBME, said the collaboration was part of an active development program and would make business expertise available to researchers in the institute.
"We are in an increasingly commercial age, and to ensure the IBME is at the forefront of the business of biomedical engineering, as well as at the forefront of R&D, we need deals like this," he said.
The IBME's new £50 million building is due to open late in 2007.
Technikos will work with Isis Innovation Ltd., the technology transfer arm of the university, to identify intellectual property or projects with potential, and will assist commercialization by making equity investments, advising management, and handling sales and marketing, and subsequently planning and executing its exit from the spin-out companies.
George Robinson, chairman of SRPE, said, "While this new venture is organized along commercial lines, we strongly believe that deals undertaken by Technikos will only work if there is a balance between financial and academic goals."
Meanwhile, Imperial College London announced a partnership with Johnson and Johnson to establish a proof-of-concept fund that will develop biomedical research projects to the point at which they can attract external investment.
The fund will be jointly administered by the college's technology transfer arm, Imperial Innovations Ltd., and COSAT, J&J's corporate office of science and technology. A joint steering committee will decide in which projects to invest.
It is the first time that J&J has made this kind on investment in a European University, Susan Searle, CEO of Imperial Innovations, told BioWorld International.
"We are not disclosing the size of the investment, but it is a good-sized fund, and the intention is to build it further."
Investments in individual projects will range from £25,000 to £50,000. "An example of a typical project would be an idea for a medical device, which we have patented. With the proof of concept fund, we will develop the prototype, and then do some preliminary clinical testing," Searle said.
All intellectual property generated will be owned by Imperial Innovations.
"J&J will not have any rights, but they do get to see a number of exciting projects. While these projects are likely to be relevant to one or other of their businesses, they are much more interested in being involved and building a relationship with us," Searle said.
The fund will be open for applications from Imperial scientists from August 2006.