LONDON - The Bioscience Innovation Centre plc (BIC), of Cambridge, which claims to be Europe's first purpose-built biotechnology incubator offering in-house mentoring services, has proposed raising £1 million via an offer on OFEX.
It will use the money to fund identification, selection and mentoring of companies to be housed in its building, and will take an equity stake in those firms.
OFEX is an unregulated trading facility for shares dealing in unquoted companies. It is operated by J. P. Jenkins Ltd., a London Stock Exchange member firm.
The £4.5 million to build the incubator, which will provide office and laboratory accommodation for 12 companies, has come from the life assurance company Scottish Life, of Edinburgh. Construction of the building, on St. John's Innovation Park, in Cambridge, will begin in October 1998 and is due to be completed in October 1999.
David Best, CEO, told BioWorld International the process of selecting suitable start-ups is already in hand, and he expects two or three will be ready to move in as soon as the building is finished. The companies will come from the U.K., the U.S. and Europe.
“We have begun the screening process to select the companies and believe we will swiftly fill the building,“ Best said. “We have had a great deal of interest because Cambridge is the leading bioscience center in Europe. However, at present there are virtually no labs for small companies to move into.
“But the main reason we have attracted so much interest is the mentoring skills we provide in areas such as patent attorneys, finance, and sales and marketing skills,“ he added. BIC currently employs 14 such specialist staff, all with pharmaceutical industry experience.
The companies will cover a range of technologies. “We want to ensure a spread of activities,“ Best observed. “We would like companies to rub off against each other and don't want them to be in direct competition.“
BIC will vary the size of its equity stake depending on the merits of each company, but Best said it will be a non-controlling interest, typically in the 10 to 25 percent range.
“Once the companies no longer need the specialist skills provided by the incubator, we hope to move them out and onwards,“ Best noted.
BIC is in discussion with other property companies to find or develop suitable accommodation. It is expected companies will stay in the incubator for about three years, after which they will be expected to obtain a public listing.
Similarly, there is no fixed schedule for when BIC will sell its share in companies it fosters. “We may seek to realize our investments over a period once a company has floated,“ Best said.
The £1 million to be raised on OFEX will be sufficient to take BIC through until construction of the building is finished. “We don't want to raise more money at the moment because it would just be sitting in the bank,“ he observed, “and once the incubator is complete, BIC will have a higher value.“
For investors, BIC will have the attraction that its risk profile is different from traditional biotechnology companies. It will have an early income stream from rent and payments for services, and will spread its risk across 12 companies. *