BioWorld International Correspondent

LONDON - IP2IPO Group Ltd. has agreed to invest £5 million (US$8 million) in spinout companies from King's College London over five years, in return for a 20 percent equity share in each company.

At the same time, London-based IP2IPO, a subsidiary of The Evolution Group plc, an investment bank and fund management group, has raised £6.1 million in a placing of 3.8 million shares at £1.60, valuing IP2IPO at £48 million.

Under the deal IP2IPO will work with KCL Enterprises Ltd., the technology transfer arm of King's College, to help identify and commercialize suitable technologies.

Malcolm Sims, managing director of KCL, told BioWorld International, IP2IPO "will be providing staff for our technology transfer unit, so they will get first look [at available technologies]. But they will then be doing deals in collaboration with other funders."

Sims said the deal reflected the current difficulties of getting early stage funding. "The general message of the venture capitalists and seed funding community at the moment is quite cold." There already are two seed funds associated with King's, and the agreement with IP2IPO will help draw in further investors.

King's College, which includes Guys and St Thomas' hospitals and the Institute of Psychiatry, is currently spinning out five or six companies each year, and doing a similar number of licensing deals. Sims said the £5 million will support a further 20 companies over the next five years.

IP2IPO made a similar agreement with the University of Southampton in March 2002 that has backed five spinouts to date, and with the chemistry department at Oxford University in August 2001 that also has supported five companies.