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Barr Ellison Solicitors – commercial property
25 February, 2019 - 10:49 By Tony Quested

Cambridge life science cluster a $10 billion powerhouse

The Cambridge life science cluster has become a $10 billion powerhouse in the last 12 months and is attracting record levels of interest from investors and potential acquirers across the globe.

Acquisitions, fundraisings, cash realised via IPO and milestone & royalty payments for which the amounts were disclosed hit $7.4 billion in 2018 but there were almost as many transactions involving global giants backing Cambridge enterprises where figures were not revealed.

A total of $2.4bn to cover the deals for which considerations were estimated or undisclosed is considered conservative by professionals working in the sector.

The turnkey significance of the cluster on the global stage is further informed by the amount our companies spend in their various supply chains, their cumulative wage bills and the sums staff spend in their local economies on housing, food, transport and so on. And the wider world is taking notice, according to John Dow, business development manager at PwC.

He told Business Weekly: “PwC has seen increasing interest in the Cambridge life sciences community from a wide range of players based outside of the UK, particularly from the USA and China.

“This is due to a number of factors, with the biggest drivers being the quality of science and IP generated in Cambridge. This is proving extremely attractive for businesses and venture capital and is increasing levels of investment into funding rounds and the number of full business acquisitions.

“This is also helping local businesses with their global expansion plans, providing them with access to networks in key target markets.”

John Dow

Disclosed fundraisings by Cambridge-based biotechs last year totalled $536.8m. Two high profile IPOs brought in a further $403.2m. Disclosed acquisitions totalled $237.8m, mainly triggered by deals where outside companies bought Cambridge players rather than the other way around.

For example, Astro Bidco paid $44m for Abzena plc, Japanese firm Astellas Pharma laid out $109m for Quethera and Vernalis went to Ligand Holdings for almost $33m.

The real riches came in the form of milestone and royalty payments secured by our best bio businesses from global Pharma giants – these accumulated to $5.6bn.

In terms of fundraising, the standout deals were easy to identify. CMR Surgical, which is developing a revolutionary robot arm for keyhole surgery, raised $100m, including cash from China, and CEO Martin Frost said he could have raised the entire haul from China had he been so inclined.

Artios Pharma raised $84m led by Andrea Partners; Crescendo Biologics hauled in $70m in a Series B round that proved exotic with French and Chinese backers coming fresh to the party.

Other major deals saw NodThera raise $40m, Owlstone Medical $35m, Fluidic Analytics $31m, CellCentric $36m and Morphogen $23.2m.

Looking at the deals where totals were disclosed, we estimate that Babraham Research Campus businesses raised the most with more than $212m. 

Chesterford Research Park ($91.1m) was second most successful in terms of money raised by tenant businesses.

Our computations on deals within the Cambridge life science environment do not include the $261m investment by Chinese player Tus-Holdings in a new building at Cambridge Science Park, or other property-related investments locally by overseas players, although these clearly add considerable value to the cluster while – encouraging scale-up by existing businesses and helping to attract newcomers to the Cambridge scene.

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