turning world class research into business 0 slide cardiff/caerdydd turning world class research...
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Turning world class research into business 1
Slide
CARDIFF/CAERDYDD
Turning world class research into
business
CARDIFF/CAERDYDD
Turning world class research into business 2
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CARDIFF/CAERDYDDBackground
• Fusion Cardiff is a wholly owned subsidiary of Biofusion plc
• Biofusion was formed in 2002 to commercialise university IP
» Formation and exit of spin-out companies
» Licensing
• We’re a small team from a variety of backgrounds who have all turned
technology into business
• We sign long term exclusive pipeline agreements with top ten UK
universities
• We are listed on the London Stock Exchange on AIM
• Currently have 23 companies in our portfolio
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CARDIFF/CAERDYDD
Biofusion model – working in partnership
PORTFOLIO COMPANY
Long-term pipeline agreements with
universities. Directly align
University interest with equity position in Biofusion
Existing tech transfer offices use their
relationships with academics to mine for and protect IP with commercial
potential
Biofusion makes investment in the Portfolio Company
and aligns academic with an equity
participation in the Portfolio Company
Biofusion selects best IP with commercial
potential and transfers it to a new Portfolio Company,
initially 100% owned by Biofusion
UNIVERSITY
TECH TRANSFER
IP CREATION
COMMERCIALISATION
Turning world class research into business 4
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CARDIFF/CAERDYDDWhat’s in this for all parties?
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CARDIFF/CAERDYDD
• In 2005 signed exclusive agreement with University of Sheffield» Leading UK research intensive university and member of Russell Group
» Ranked 6th in last RAE rankings
» Current annual research spend of £93m
» 10 year pipeline agreement for all medical life science IP
» University of Sheffield own 24% of Biofusion
• In 2007 signed exclusive agreement with Cardiff University
» Leading UK research intensive university and member of Russell Group
» Ranked 7th in last RAE rankings
» Current annual research spend of £82m
» 10 year pipeline agreement for all university IP
» Cardiff University own 30% of Biofusion
Our university agreements
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CARDIFF/CAERDYDDOur investment partners
• NPI Ventures» Formerly part of Nikko, recently acquired by Citigroup
» First look option to invest in Biofusion portfolio
» Acquired £2m stake in Biofusion as part of investment agreement
» Exclusive £10m+ side fund to invest in Biofusion portfolio
• Finance Wales
» Welsh regional investment body
» MOU offering the option to co-invest in Cardiff based portfolio companies
» Access to £130m fund
Turning world class research into business 7
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CARDIFF/CAERDYDD
plc
Sheffield
University of Sheffield
24%Institutions
Ring fenced £8m
fund
Cardiff University
30%
Cardiff
Ring fenced £8m
fund
Structure
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CARDIFF/CAERDYDD
How does this work in practise?
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CARDIFF/CAERDYDD
From IP creation to company formation
Inventor contacts
RACD
Initial meeting
with RACD
RACD conduct initial screen
RACD Kill?
N
YRACD
present disclosures to Biofusion
Close out record and
inform inventor
Spin out?
N
Y
License or kill project
Fusion Cardiff and RACD meet
Inventor
Spin-
out?
Trigger patenting process
Fusion Cardiff and
RACD discuss spin-out
with Inventor
Due diligence kick-off meeting
Conduct due
diligence and draft
investment case
Review and sign-off
Present to Fusion Cardiff
Investment Committee
Hold and review
options (PoC,
SMART)
N
Y
?
Set up NewCo
University
Joint Fusion Cardiff
PIPELINE DISCLOSURESPIN-OUT, LICENSE OR
KILL?COMPANY CREATION
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CARDIFF/CAERDYDD
New Co Limited
Academic is given
significant shareholding
in New Co
The New Co at start-up
University transfers
IP into New Co
Fusion Cardiff set up New Co1
2
3Fusion Cardiff work
with academic to
build commercial
business plan and
milestones
4
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CARDIFF/CAERDYDDFunding the New Co to exit
Start-Up Investment Exit strategy
Assign research contracts or recruit RAs
Provide management expertise & contacts
Provide initial funding
Recruit management
Develop business
Raise third party funding
Reduce involvement
IPO or trade sale
Up to £200k Up to £500k
Investment Partners
Cardiff Fund
5 6 7
Third Party Investors
Later stage Investment
Investment as required
Investment as required
Fusion Cardiff New Co
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CARDIFF/CAERDYDD
• In terms of IP ownership nothing has changed
» Cardiff University still owns its IP
» Fusion Cardiff has the right to set a company up from that IP
» But we would only do that if all parties agree and are happy
» We recognise that not all research has commercial applications and we don’t force people to work with us
» We stand in place of the University so we only own whatever the University would own
• Research grants and industrial collaboration remains the same
» Again we only have the right to whatever the University ‘s share of IP would be
» It doesn’t stop funded research from industry partners and we would never seek to stop this
• It will not stop departments working
» RACD receive 50-100 disclosures pa across the whole University
» We will only do 4 – 10 start-ups pa
Intellectual property
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CARDIFF/CAERDYDD
How are we doing?
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CARDIFF/CAERDYDDKey events in the year
• Completed the agreement with Cardiff University in Jan 2007
» Integrated with RACD team
» Presenting to all key departments
» Full review of pipeline
» Four potential spin-outs
• Signed MOU with Finance Wales
• Sale of Cardiff Biologicals and Cardiff ProTides to Morvus
» Acquired Fusion Cardiff’s shareholding for 20% of Morvus
» Fusion Cardiff holds13,698,630 Morvus shares
» At last funding round in July 2007, Morvus was valued at £11.6m (30p
per share)
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CARDIFF/CAERDYDDOur growing portfolio
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CARDIFF/CAERDYDD
Potential ‘blockbusters’ and advanced stage exits
Developed a range of man-made
hormones that mimic the actions of
natural hormones . It has a multi
million research programme with
Ipsen on GH and is expanding its
pipeline to include 4 new target
hormones including EPO and Leptin
Enables pharmaceutical companies
to predict how the human body
interacts with the drugs under
development “before” running
clinical testing programmes
Turnover up to £2.0m and net profit
up to £500k
Developed a ‘once a day’ drug that
mimics the circadian rhythm and
releases replacement hormones in
exactly the same way the natural
cycle would . First product entering
Phase III and three new products in
development pipeline
New start up in 2007
developing vaccines and
therapeutic antibodies to treat
infections caused by MRSA
New start up in 2007 developing a
metabolically engineered microbial
production method that is capable
of producing hydrogen from sugar
solution media through
fermentation
Developing a CCD camera
microscope that is not only cheaper
but has a better performance than
existing microscopes.
New start up in 2007 developing
new ‘monoclonal antibody’ drugs
that stop cancerous tumours
growing and have less side effects
than currently available therapies
Developed a range of novel drugs
and technologies, primarily in the
field of oncology. It has 3 products
in pre-clinical studies of which the
first is expected to enter Phase I
clinical trials in 2008
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CARDIFF/CAERDYDDSummary
• Progressing well
• Excellent relationship with RACD and University
• Need to do more to reach out to non-life science and to
continue to communicate with all academics
• Focus on creating spin-outs over next six months
• Delighted to be in partnership with Cardiff
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CARDIFF/CAERDYDD
Turning world class research into
business
CARDIFF/CAERDYDD