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Biotech bonanza hits UK

Three new UK venture funds are bringing a total £350 ($543) million to support long-term investments in early-stage companies. The largest is £200 million from Syncona Partners, launched by the Investments Division of the London-based biomedical charity Wellcome Trust. Meanwhile the Welsh Life Sciences Fund has £100 ($155) million, with £50 ($77.5) million of it coming from the Welsh government, and the balance raised by Arthurian Life Sciences, a company set up by biotech veteran Chris Evans to bid for the contract to manage the fund. Completing the trio, venture capital investor Sinclair Dunlop, co-founder and managing partner of Rock Spring Ventures, of Bethesda, Maryland, is returning to his native Scotland to launch a European fund.

Syncona will be operating as an independent entity. Its investment philosophy is not only different from that of the Investments Division of the Wellcome Trust, which spends over £20 ($31) million in later-stage companies, but also from conventional venture capital funds, explains Martin Murphy, CEO. “The key difference is that ours is an evergreen fund that can take a long-term view and support technologies all the way through to market,” Murphy says. Syncona is prepared to invest for 10–12 years, if necessary. The approach also is distinct from the Wellcome Trust's philanthropic grant programs, such as Seeding Drug Discovery, in that there must be potential for commercial returns. “We will look for unmet medical needs, but there has to be a market,” Murphy says. Syncona's first investment in Cambridge EpiGenetix, a Cambridge University startup that aims to commercialize tools and techniques for detecting nucleotide modification, exemplifies the fund's intentions. Following the seed funding, Murphy says Syncona expects to invest in a Series A and subsequent investment rounds.

The Welsh Life Sciences Fund also wants to make large, long-term investments. “The plan is to invest in 10–12 good companies and then stay with them, rather than randomly trying to put money into as many firms as possible,” says Martin Walton, a director of Arthurian Life Sciences. Rock Spring Ventures' fund is inspired by the need for more sector-specific financial backing, with the life sciences sector in Scotland and other parts of the UK representing what it describes as “underventured” markets. It plans to form syndicates with other early-stage investors, including funders from outside the UK. To date, Rock Spring Ventures EU has received commitments for £25 ($387.7) million of a proposed £50 ($77.5) million, from investors, including the universities of Aberdeen, Edinburgh and Glasgow, and the EU's European Investment Fund.

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Moran, N. Biotech bonanza hits UK. Nat Biotechnol 31, 183 (2013). https://doi.org/10.1038/nbt0313-183

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