Cancer Research Technology (CRT), charity Cancer Research UK’s subsidiary to commercialise academic research into oncology treatments, has set up a £50m ($80m) venture fund.
CRT and the European Investment Fund (EIF), a state-backed organisation that is the largest investor – called limited partner – in European venture capital funds, will equally split the commitments for the £50m fund, called CRT Pioneer fund.
The money will be committed in two tranches of £25m – now and in two years’ time – and managed by Sixth Element Capital, a new, independent general partner set up for the purpose and run by Robert James, Ian Miscampbell and Ralph Villiger. Law firm Reed Smith advised on the fund’s formation.
The CRT Pioneer fund will take potential cancer drugs from discovery through to entry to phase II clinical trials by licensing potential treatments to exisating pharmaceutical groups rather than creating separate companies that would then have to be sold to generate a return for the fund.
In a typical licensing deal, half the money is paid to the research institution and individual that made the discovery with the fund then paid as milestones are reached. This provides a potentially earlier and more long-term stream of payments back to the CRT Pioneer fund than waiting for a sale or flotation and so the fund is set up to run for 15 years rather than the traditional 10.
At least two thirds of the CRT Pioneer fund will be used for discoveries made by Cancer Research UK scientists at its own CRT Discovery Laboratories and Paterson and Beatson Institutes, the Institute of Cancer Research and Newcastle University. The remaining projects may come from other academic groups or industry in the UK.
Keith Blundy, chief executive (CEO) of CRT, said: "Investment from industry has moved away from early stage discovery and there’s less funding for small biotechnology firms [which] previously helped bridge the gap between academia and pharmaceutical companies."
CRT’s last spin out was in January, with Acublate developing a high intensity focused ultrasound surgery device to treat a range of solid tumour types. Cancer Research UK, Imperial Innovations and Imperial College Healthcare NHS Trust funded the original research to develop the technology while CRT owns the intellectual property to the technology and is Acublate’s largest equity holder.
Richard Pelly, CEO of the EIF, added: "This investment [in the CRT Pioneer fund] now becomes the largest technology transfer operation partnered by EIF to-date."
The EIF is also expected to commit to a €10m ($13m) tech transfer fund in France for digital investments and seed funds in Bulgaria and Greece later this year. In the UK, the EIF has already committed to the £32m UMIP Premier Fund to commercialise research from the University of Manchester, the IP Venture Fund working at 12 British universities and is expected to support the Enterprise Capital Funds, according to government officials.
Across the European Union, the EIF said it would develop its tech transfer to cover royalty funds, intellectual property funds, corporate venturing and a larger number of university seed funds. Its model for corporate venturing partnerships, called Bio-E in healthcare, has already been taken up by drugs companies GlaxoSmithKline and Johnson & Johnson with venture capital firm Index Ventures to create the Life VI fund last month.
