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Annual Review

19 December 2016

2016: year in review

Editor Thierry Heles looks back on the highlights of the past 12 months and talks to some of the people who have made it a record-breaking year to remember.

Author: Thierry Heles, editor

This year is likely to be remembered as a bad year by much of the world. The election of Donald Trump as president of the US, dreaded by a vast majority in Silicon Valley, and the UK’s decision to abandon the EU, dreaded by a vast majority of universities and researchers, have caused geopolitical upset that will last for years.

So far, however, none of these things appears to have made much of an impact. In fact, technology transfer seems to remain on an upward trajectory and many of its leaders are looking ahead optimistically.

Over the past 12 months, Global University Venturing has tracked more than 50 new funds, including university venturing funds, third-party vehicles backed by higher education institutions and combined efforts by several partner universities. Both public and corporate investors were also involved on a number of occasions.

The sheer number of vehicles makes it impossible, of course, to sum them all up in this article, even though the majority have at least one distinguishing feature that would justify in-depth analysis.

Among the funds that stood out, arguably more than others, primarily for its breath-taking size, is the $7.6bn initiative unveiled by Tsinghua University in June. The vehicle, with a lifespan of five years, will supply research funding and put $1.5bn into commercialisation efforts. The money is also being used to set up 1,000 incubators across China and another 50 in the US, the UK and Germany by 2021.

Earlier in the year, Tsinghua Unigroup, a fabless semiconductor manufacturer owned by conglomerate Tsinghua Holdings that is in turn funded by the university, had already partnered electronics producer TCL for a $1.5bn fund to invest in sectors such as electronics, media and telecoms, and smart manufacturing.

TUS Holdings, the enterprise arm of Tsinghua University’s Science Park, then joined forces with the Russia-China Investment Fund, backed by sovereign wealth funds Russian Direct Investment Fund and China Investment Corporation, in November for a $100m fund. That followed a $100m partnership between TUS and Russian conglomerate Sistema in March.

Not to be outdone by its Chinese peer, however, Massachusetts Institute of Technology (MIT) in May revealed it had already secured $2.6bn for a $5bn fund to accelerate the pace of its research. Dubbed MIT Campaign for a Better World, the institute hopes to tackle global problems such as climate change and access to clean water, and treat diseases such as HIV and Alzheimer’s.

MIT has had an eventful year overall. Lita Nelsen, who had been with the technology licensing office for 30 years and was its director for 23 years, retired in April and was replaced in July by Lesley Millar-Nicholson, former director of the office of technology management at University of Illinois at Urbana-Champaign.

In October, MIT unveiled the Engine, a $150m initiative to provide long-term patient capital and workspace to fledgling spinouts. MIT has put $25m of its own cash into the fund, which will primarily target research-intensive innovations that have struggled to secure capital in the past.

Nelsen was not the only luminary to step down this year. Tom Hockaday, head of Oxford University’s commercialisation arm, then known as Isis Innovation but rebranded to Oxford University Innovation in June, announced he was stepping down in January, giving his final interview in that position to GUV the following month.

One of the key points to which Hockaday, who was replaced by Matt Perkins as chief executive in October, drew attention in that interview was the creation of university venturing fund Oxford Sciences Innovation (OSI), which he dubbed “a very significant immensely positive game-changer for commercialisation at Oxford”.

At the time, OSI was already armed with an impressive £320m ($400m), which it extended to £580m only a week ago. The university’s own endowment fund provided part of that extension, with the remainder coming from IP Group, Wellcome Trust, Woodford Investment Management, Lansdowne and Invesco Asset Management.

The fundraising, and a £100m funding round for portable DNA and RNA sequencer developer Oxford Nanopore Technologies only a couple of days later, capped a hugely successful year for Oxford University Innovation.

Matt Perkins told GUV: “With 19 spinouts launched in the past calendar year, 2016 has been one of Oxford University Innovation’s most active periods on record. The momentum behind the Oxford tech cluster is strong – exemplified by Oxford Nanopore’s £100m round and OSI’s extra £230m – and is set to continue well into 2017 and beyond.”

Momentum appears to have been similarly strong across much of the tech transfer world. Alta Innovations, the tech transfer office of Birmingham University, began the year by ramping up its media presence thanks to the vision of chief executive James Wilkie – as GUV reported in its two-part, in-depth profile in April.

Wilkie’s ambitions have continued to pay off over the course of the year. He told GUV: “2016 has been another strong growth year for Alta Innovations. We have moved Birmingham University to fourth place in the UK for identifying and protecting intellectual property (IP).

“More importantly there is growing acknowledgement of the quality of our IP. The pipeline has been showcased in many media reports covering applications such as cancer, antibacterial surfaces, transport, and computer manufacture and recycling.

“We recruited four new members of staff during 2016 and developed a number of strategic partnerships such as that with Cancer Research Technologies. These actions have substantially increased the number of our academics we are able to interact with in 2017 as well as raising our profile at a national level.”

Wilkie has set Alta Innovations on a strong path for next year. He continued: “Early in the new year we will be announcing the first two investments from our £5m seed fund, and we will be working closely with five other Midlands universities throughout 2017, to raise the profile of the investible propositions coming out of the Midlands. I am anticipating that there will be substantial increases in the amount of third-party investment funding available for our collective spinout opportunities.”

This year also put more remote places on to GUV’s radar. South Africa announced a national university venturing fund in May, and in June, Chile announced it was bringing together 26 universities and 12 science laboratories to set up tech transfer hubs supported by a $19m fund. The country hopes increased collaboration will boost the number of spinouts, patents and licensing deals, particularly by giving smaller institutions the resources to conduct such deals.

Chile has undoubtedly followed the example set by France, which launched its regional tech transfer program in 2012. The 14 Sociétiés d’Accélération du Transfert de Technologies (Satts) are united under national umbrella organisation Réseau Satt and have been increasingly successful.

In early December, Laurent Baly, who spoke to GUV when he became president of Satt Sud-Est last year, became president of Réseau Satt, replacing Norbert Benamou, head of Satt Nord.

While numbers for individual Satts’ successes in 2016 alone were yet to be published as of the time of publication, Baly took the year’s end as an opportunity to sum up the ambitious program to date. “The aim of Réseau Satt is to transform the power of public research into innovation for companies.

“The Satts exist to accelerate tech transfer, to save socio-economic actors time by simplifying access to the know-how of the 185 public research institutions that they represent. This time-saving is made possible thanks to each Satt enjoying a privileged operational role to help industry discover the scale of innovation by public laboratories. They also exist to provide access to a substantial investment capacity, with nearly €900m ($940m) invested in research programs.”

Baly continued: “While the Satts are relatively new instruments in the French landscape – having been created between 2012 and 2014 – many researchers have quickly relied on them to disclose multiple inventions. That trust has allowed us, in a few short years, to protect nearly 1,400 inventions, invest in more than 1,000 maturation projects and sign more than 400 licensing deals, including the creation of 130 spinouts.”

Back in the UK, Russ Cummings, chief executive of Imperial Innovations, the commercialisation firm spun out of Imperial College London, was also optimistic. The company has had an exceptionally strong year even by its own high standards with the launch of the £50m UCL Technology Fund, and the £40m Apollo Therapeutics fund in January giving Imperial Innovations a great start to the year.

The University College London fund is made up of a £24.75m commitment from Imperial Innovations and matching funding from EU agency the European Investment Fund, with £500,000 from fund manager Albion Ventures. Apollo, meanwhile, brought together Imperial Innovations, UCL Business – the tech transfer arm of University College London, Cambridge Enterprise – the TTO of Cambridge University, and pharmaceutical firms Johnson & Johnson, through CVC arm Johnson & Johnson Innovation, AstraZeneca and GlaxoSmithKline.

Russ Cummings said: “During 2016, we significantly increased our visibility of new investment opportunities in the golden triangle, with the completion of two new initiatives.

“The first of these was in the creation of the new UCL Technology Fund and the second was our commitment to Apollo Therapeutics – a new £40m joint venture. Many of our portfolio companies made significant technical, clinical and commercial progress during the year, and whilst Circassia suffered a setback with one of its late-stage clinical trials, this is a feature of biotech investing and our strategy of supporting UK science and ambition to create world-class businesses remains undiminished. We raised a further £100m to strengthen our balance sheet, which will enable us to put more money to work in our exciting portfolio.

“We are particularly pleased by the growing evidence of strong partnership interest in these businesses, increasingly from the pharma industry, the recently announced collaboration and licence agreement between Crescendo Biologics and Takeda Pharmaceuticals being a prime example – this potentially could be worth up to $790m subject to achieving preclinical and clinical milestones. Psioxus Therapeutics also announced a significant partnership with Bristol-Myers Squibb. Both deals represent important validation of our maturing therapeutics portfolio.”

Looking ahead to next year, Cummings added: “We are excited about the opening of our second office in London early in 2017. This will coincide with a corporate rebranding exercise that will see Imperial Innovations Group renamed as Touchstone Innovations.

“We are making this change to reflect the broader supply base of opportunities we are supporting across the golden triangle. The term ‘touchstone’ has also come to represent a standard against which the genuineness or quality of something is judged. Touchstone Innovations thus has an interesting resonance with the  science focus and many positive connotations relevant to our operations.”

At Cambridge Enterprise, chief executive Tony Raven, shared Cummings’s enthusiasm. He said: “December 2016 marks Cambridge Enterprise’s 10th anniversary and with it another record year.  

“Thanks to the innovativeness of our academic colleagues and the excellent work of the Cambridge Enterprise team, 2015-16 has been another exceptional year. We made 14 investments totalling £5.3m in promising spinouts, another record for Cambridge Enterprise Seed Funds.

“Among our many successes this year, we celebrated Carrick Therapeutics raising a $95m A round – a UK spinout record – following a seed investment by Cambridge Enterprise and Arch Ventures, the sale of our portfolio companies, Cambridge CMOS Sensors to AMS, a global leader in environmental sensing and the sale of spoken dialogue spinout VocalIQ to Apple.

“Since 2011, 11 companies have either been sold or listed for a combined exit valuation of £1.3bn. That cumulative economic impact of the university is just one of many things that make us proud as we mark the 10th anniversary of our incorporation as Cambridge Enterprise Limited.”

Raven also picked up on Apollo and the continuing success of Cambridge Innovation Capital, adding: “2016 also saw the launching of the £40m Apollo Therapeutics fund in partnership with GSK, Astra Zeneca and J&J together with Imperial Innovations and University College London.

“With our sister organisation, Cambridge Innovation Capital, an investor in high-growth Cambridge technology companies that was established as a £50m follow-on fund, and subsequently fundraised a further £75m, we have the resources to provide spinouts with long-term patient capital for ambitious growth.

“The pipeline for this year is already very busy and we are looking forward not only to investing in a number of new and exciting spinouts from the university but also watching the continued progress of our investee companies.”

Other institutions across the world also had reason to celebrate. Keio University established an $84m fund aimed at space technology, life sciences and regenerative medicine in February, Delft University of Technology's Robovalley Centre co-created a $112m robotics fund in June, and in July three New Zealand institutions joined a $150m Australia-based fund already involving more than 50 research institutes and hospitals.

In June, University College Dublin and Trinity College Dublin partnered growth equity firm Atlantic Bridge, the European Investment Fund, state-owned development agency Enterprise Ireland, and financial services firms AIB and Bank of Ireland to launch a $68m vehicle.

In the US, commercialisation firm Allied Minds boosted its coffers with a £64m placing that included a £15m contribution from asset manager Woodford Investment Management. And in Israel, Ramot, the tech transfer office of Tel Aviv University, helped established the $20m investment consortium I3 that also attracted Microsoft Ventures, GE Ventures and Qualcomm Ventures, the respective corporate venturing units of software company Microsoft, conglomerate General Electric and semiconductor manufacturer Qualcomm. I3 is focusing on internet of things and industrial internet-of-things technologies.

This year was undoubtedly great for many tech transfer offices across the world and 2017 looks set to break even more records. Global University Venturing looks forward to covering these and much more, and has some great projects in the pipeline – one of which, of course, is our annual event GUV Fusion, which will take place in May 2017 at the Grange St Paul’s Hotel in London. You have until December 31 to secure early bird tickets for only £995.

– Global University Venturing will be taking a break over the holiday season and will return on January 3. We would like to thank all of our readers for the continued support and wish you a merry Christmas and a happy new year.

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