Jackson thrives as scientist composes another thriller!
Raising Venture Capital for his first company – KuDOS Pharmaceuticals – took such a strain on eminent Cambridge scientist Professor Steve Jackson that it left him utterly drained.
He took his family on a 10-day holiday to the Lake District after finally clinching the cash but couldn’t raise the energy to leave his hotel room for the first six days and in the entire stay never ventured outside once. Looking back, Steve is glad he persevered – a decision handsomely rewarded by success with his new enterprise, MISSION Therapeutics – but he still believes more could be done in the UK to ensure other exciting life sciences ventures are not put through the same mangle.
He says that tax relief for entrepreneurs and investors – allied to other incentives – must be engendered by the Government to ensure that life science startups in the UK receive the same, much larger, cash injections from Day One that their US counterparts routinely obtain. Here is Steve’s story in his own words...
I have always considered myself a scientist rather than a business person. Having said this, I have for many, many years had an interest in business – an interest that was even evident when I was a child.
Apparently, at the age of 12, I told my teacher that I had a scientific idea I would like to patent! It was, of course, quite some time later that I really had the opportunity to seriously consider business – the first example being back in 1994 (I was 32) when I had an idea for a company, but, at that stage, nothing came of it.
I became actively engaged in forming my first business in 1996 and began formulating my plans and seeking advice in earnest early the following year. The main reason I took this initiative was to try to make a difference. I had been researching the causes of cancer for several years and had identified a potential way of developing a new strategy for cancer therapy. I wanted to turn this into reality!
I was a ‘Younger Group Leader’ at what is now the Gurdon Institute of the University of Cambridge, based in central Cambridge. I was heading a research group focused on understanding how cancer arises through the accrual of mutations in DNA.
This research had identified a potential new approach of treating cancer through developing drugs to inhibit cellular DNA repair processes. One key DNA repair factor I had identified was the protein Ku – indeed, my career has been based on what ‘Ku does’ – hence the company’s name!
KuDOS Pharmaceuticals, was incorporated on December 12, 1997 when I was 34. I was the sole scientific founder and the founding institutions were Cancer Research Campaign (now Cancer Research UK) and the University of Cambridge. This brought in some seed funding and allowed us to establish the company’s platforms but it took us until May 1999 to secure venture capital funding and to get the company properly up-and-going.
It was not easy getting funds for a drug discovery company and these fundraising efforts were really gruelling for me, particularly since I had a young family and was also restoring a property.
The business model was to establish KuDOS as a drug discovery company. Arising from my academic research, we had cellular and biochemical assays and detailed knowledge of DNA repair pathways in cancer cells and in normal cells.
The goal was to translate these assets into new drugs for cancer, taking advantage of a new strategy – termed ‘synthetic-lethality’ – that we felt would allow us to kill cancer cells but not normal cells of the body. To do this, Barrie Ward (the CEO) and I employed a group of excellent biologists and drug-discovery scientists, and later evolved the company to possess its own in-house chemistry and early-stage drug development expertise. This business model is now being repeated in my second company, MISSION Therapeutics.
Cancer Research Technology provided £327,000 of seed funding which allowed KuDOS to get the show on the road and leverage further investment of £5 million (tranched) from a syndicate of venture capital groups: Advent, Schroder Ventures and 3i.
Two subsequent funding rounds (with the initial investors plus others) brought in £29.5 million and £8 million, taking the company to acquisition by the international pharmaceutical company, AstraZeneca.
Securing funding for the enterprise was extremely problematic and stressful. I had never worked so hard for so long – and I knew that the success of the company and the prospects of the initial employees we had taken on with the seed funding were essentially all down to me, a young academic with no prior business expertise, getting hard-nosed business investors to part with large sums of money.
In the end, I somehow managed to convince them to believe in the concept and in me and to make what turned out to be a great investment. However, the whole process – coupled with family and academic work pressures (I was running a growing research group and needed to pull in major grants to keep it going) – left me absolutely drained.
Indeed, on securing the VC investment, I took a 10-day vacation in the Lake District with my family but could not summon the energy to leave the hotel room until day 6 and never had the energy to venture outside of the hotel premises during my stay!
Raising funds for high-risk new biotech ventures is never easy, particularly in the drug discovery arena. Having said this, the experience and contacts I formed during my KuDOS experience proved extremely valuable when founding and establishing my second company, MISSION.
At KuDOS we faced lots and lots of challenges. A key one was to hire a suitable CEO but, luckily, our investors identified a person who turned out to be ideal: J. Barrie Ward. Barrie as CEO, and I as Chief Scientific Officer (part time, as I also retained my University role), then got the company going.
Other challenges included finding suitable premises (which we found at Cambridge Science Park) and identifying other key personnel. Luckily, the contacts that I, Barrie and our expert investors had allowed us to recruit very well, establishing a truly great team of scientists, drug developers and business people.
A further major challenge for me was to find a balance between my business, academic and personal roles and I really struggled with this for some time. From time-to-time, I did question why I bothered – particularly because of the stresses and issues arising from me simply not having enough time to do all that I should have been doing at KuDOS, in my University lab and at home.
But in the end, I somehow managed to get through all this and end up in a position where I had a reasonable balance and was very happy with the exciting and diverse life that I was leading.
Another issue that led me to question why I bothered was the fact that my equity stake in the company was, in my opinion, far lower than it should have been, given my key role in establishing the company and taking it forward.
Fortunately, the KuDOS board recognised this and provided me with some additional equity. Nevertheless, while I did not establish the company to make money for myself, I did end up feeling rather short-changed, particularly when I learned that I had to pay nearly 50 per cent of my entire proceeds in tax.
Nevertheless, I am really, really pleased that I did bother! Establishing KuDOS took me into exciting new dimensions, allowing me to acquire new skills and interests, and introducing me to lots of inspiring people, many of whom I am still in contact with today.
I am also happy to know that my colleagues and I did, in fact, make a difference: providing high quality employment for many, bringing in funds from various international organisations and deriving compounds that will hopefully soon become registered drugs to improve the lives of cancer sufferers and their loved ones.
I hope to do it all again through another anti-cancer drug discovery company that some of my ex-KuDOS colleagues and I recently co-founded – MISSION Therapeutics.
While it was my hope that KuDOS would remain a going concern long-term, perhaps through an IPO or merger, it turned out that when looking into potential collaborative partnerships, several large pharmaceutical companies expressed an interest in an outright acquisition.
The board, which included myself, was eventually persuaded to accept an offer from AstraZeneca (AZ) of $210 million in early 2006. This not only allowed our investors to exit but also provided KuDOS – operating as an AZ subsidiary on the Milton Road Science Park – with resources to take our products into many clinical trials.
I am really excited by the fact that these trials have now taken KuDOS drugs to a stage where they seem set to establish a totally new approach to cancer therapy. Nevertheless, with hindsight, this means that KuDOS would have turned out to be an even better investment for our backers if we had resisted acquisition for a few more years.
In 2010, AZ closed KuDOS and moved all of its assets, and some key personnel, to its main site in Alderley, Cheshire. It is good (although somewhat ironic) that these assets – and many of the same personnel – now seem set to move back to Cambridge when AZ completes its relocation here.
After the KuDOS closure I realised that I no longer had the potential to explore exciting new therapeutic possibilities arising from my academic work at the University of Cambridge.
To address this issue, I conceived a new company, MISSION Therapeutics (so named because the company’s aim, to develop drugs to alleviate human disease, is aligned with my personal mission).
I then spent some months formulating the basis for the company and writing the initial business plan, describing how MISSION would use synthetic-lethality and related therapeutic concepts arising in the arena of ubiquitin biology to deliver new anti-cancer drugs.
Importantly, I managed to persuade three key ex-KuDOS colleagues to join me in this venture – Niall Martin, Xavier Jacq and Keith Menear – as co-founders. Their involvement, together with the knowledge and contacts that I had developed over the preceding years has meant that, while establishing and running MISSION has been challenging, it has been nowhere near as stressful as it was for KuDOS.
I should point out that we have also benefited from valuable advice and encouragement from CRT and the technology arm of Cambridge University (Cambridge Enterprise), both of which are also founders and equity-holders of MISSION.
MISSION received its initial venture capital investment of £6 million in August 2011 and in November 2013, received further investment of £20 million ($32 million). Our investment group is led by Soffinova partners and also includes Imperial Innovations, SR One, Roche and Pfizer Venture Investments. As for KuDOS, we at MISSION have benefited hugely from the high quality of our investors’ business acumen and the contacts and networks that they have helped us to establish.
In my view, the physical infrastructure and extent of relevant personnel and companies in the Cambridge area are now significantly superior than they were 10-15 years ago, making establishing and running a technology company here a little easier than it was before.
If I had known in 1997 what I know now, I would have done some things more efficiently and perhaps a little differently, but not much would change. In the end, founding and running a technology-based company is largely about having the right ideas, having the commitment, energy and passion to pursue these ideas with vigour, and finding the right investors, premises and personnel to allow you to achieve your goals.
It is never going to be easy to establish a successful business, but in a place like Cambridge and also certain other areas within the UK, it is certainly eminently possible.
My advice to startup life science entrepreneurs would be to identify a business opportunity that you believe in and feel passionate about in terms of it being able to deliver something for which there is a tangible market/customer-base and then really go for it!.
You should also seek and act upon advice from others whenever you can, be generous to others and try to establish not only a physical company entity but also a cooperative workforce that shares your passion and vision. If you have all these things, and a little luck, success is likely to ensue.
The UK, particularly the Cambridge area, is a good place to be an entrepreneur but more could be done to nurture entrepreneurship further. In addition to government and local actions to enhance the physical infrastructure through further development of incubator space and science parks, additional events/venues that nurture networking and interactions would be useful.
Changes to the tax structure to benefit entrepreneurs and their investors would also help, particularly those that reward those not looking for quick profits but are aiming to yield strong, long-term businesses.
Finally, efforts such as yours – to bring together experiences and advice in a coherent and accessible way – will certainly help to lower the psychological “activation barrier” that can impede a novice entrepreneur taking the plunge in establishing an exciting new business!
Looking at the broader picture, it would be beneficial if the UK could find ways of further enhancing incentives for longer-term investment models that would help nurture sustainable, often larger, businesses.
I had personal experience of this with KuDOS, which was sold after seven years of existence. While this gave our backers a significant return on their investments, I believe that the up-side would have been much, much larger if we could have somehow secured scale-up funding to allow us to move into expensive clinical trials.
In this regard, I note that there is generally much less appetite for such things in the UK/EU than in the US, where sustainable – and valuable – biotech’s have been established. Having said this, I am optimistic about the way things are moving here in Cambridge and in the UK more generally in terms of infrastructure and funding opportunities.
In particular, I feel that if we can further engage large pharmaceutical companies in Cambridge at various levels, this could provide ways to complement, and perhaps hybridise with, more traditional government, venture capital and angel investment models.