Most of the UK’s fast-growing life sciences industry is based in the UK’s regions says Warwickshire-based Mercia Asset Management PLC, “And we’re backing them”, it adds.
The regionally focused, specialist asset manager has said that in its financial year to date, it has invested £4.2million into six Life Sciences direct investments, with a further £1.6million invested by Mercia’s managed funds.
Life Sciences investments accounted for seven out of the top 20 direct investments as at 31 March 2020 and their cumulative fair value of £28.6 million represented 32.7 per cent of the total portfolio by value.
Mark Payton, Chief Executive Officer at Mercia, said: “The Life Sciences sector represents a significant growth area in the UK’s regions and is well positioned to benefit from current trends. We are excited by the progress we are seeing in both our direct investments and managed funds, and the potential of our portfolio demonstrates the value and innovation in the UK healthcare sector. Today’s update is an important indicator that the life sciences community is predominantly located outside of London and that not only is it resilient, but it is fast growing.”
All of Mercia’s Life Sciences direct investments originated from its third-party managed funds and in addition to these investments, Mercia has a further c.40 Life Sciences investments across its third-party managed funds.
Mercia’s investments include:
Oxford Genetics Ltd. OXGENE, based in Oxford, is a biotechnology company specialising in gene therapy, gene editing and antibody discovery. It has delivered a third consecutive year of 100 per cent plus revenue growth, more than doubling revenues in its financial year ended 30 April 2020. This continued growth has been fuelled by a combination of strategic licensing agreements and service delivery projects, including a strategic partnership with Fujifilm Diosynth Biotechnologies. The company’s continued growth has been recognised recently by The Sunday Times’ Fastest Growing Tech 100 at position 19.
Warwickshire-based Medherant, which was spun out of the University of Warwick, is a developer of transdermal drug-in-adhesive patches using a novel adhesive. In May 2020 the company announced that it had signed an agreement to develop and commercialise multiple products using the TEPI Patch® technology for the global commercial-stage pharmaceutical company Cycle Pharmaceuticals Ltd, which is based in Cambridge. As interest continues in Medherant’s platform technology, the company has recently secured an additional large pharma evaluation agreement. In parallel, Medherant is developing an internal candidate patch which is expected to go into clinical trials in 2021, addressing a market estimated at around $1billion per annum. In June 2020, the company completed on a syndicated investment round of £2.8million of which Mercia made a direct investment of £1.4million.
In July this year, Mercia sold its investment in The Native Antigen Company Ltd (NAC), achieving an 8.4x return on original direct investment cost. NAC, a leading producer of infectious disease reagents that include antigens for COVID-19 antibody test kits, was sold to global life sciences tools company LGC, which is based in Middlesex, in July 2020 for £18 million.
In April, OXGENE and The Native Antigen Company Announce collaborated in a project to Increase COVID-19 antigen production for diagnostic kits and vaccine development.
Mercia also has a list of promising businesses within its third-party managed funds, which represent potential future candidates for its direct investment portfolio. One of these is Oxford-based Sense Biodetection Ltd, which is focused on the development of instrument-free molecular diagnostics. Just under 12 months ago Sense raised £10.5 million in Series A investments and secured a grant of £1.8 million from Innovate UK. In March 2020 Sense announced an accelerated programme to launch the world’s first instrument-free, point-of-care molecular diagnostic test for COVID-19, partnering with Phillips-Medisize (a leading global medical device innovator, developer and manufacturer, owned by Molex) to scale up production of its testing to meet the growing demand for rapid diagnostics.
Mark added: “Mercia has demonstrated its ability to identify investment opportunities to which others do not have access. By continuing to invest and nurture early-stage regional Life Sciences businesses, we make it possible for the UK’s technology industry to have a real impact in tackling global issues, build regional employment and create demonstrable shareholder value.”