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28 February, 2014 - 11:07 By Tony Quested

Cambridge tech deals bust $27.5bn milestone

Justin Gover, CEO at GW Pharmaceuticals

More blockbuster life science deals in February have taken transaction value in the Cambridge UK technology cluster to $27.5 billion in the last 11 months.

Another surge of deals worth at least $400 million in the short month of February were recorded in Business Weekly’s Cambridge Cluster Deals Digest.

That figure could rise substantially if Science Park company Discuva delivers more than one product for Roche at $175m a throw!

Even as things stand, the Cambridge Cluster has averaged $2.5bn worth of deals every month over the last 11 months – that’s well over half a billion dollars a week! Nor does the total take account of 13 February transactions for which figures were undisclosed.

Cambridge’s life science cluster remains a global honeypot. Stand-out piece of business was Discuva’s collaboration with Swiss pharma giant Roche to combat life-threatening infections caused by multi-drug resistant bacteria.

They have entered into a worldwide collaboration and licence agreement for the discovery and development of new antibiotics to treat life-threatening infections caused by multi-drug resistant Gram-negative bacteria using Discuva’s proprietary SATIN technology platform.

Discuva will receive an upfront payment of $16 million, research fees and payments on multiple programmes of up to $175m per product, upon achievement of certain development, commercialisation and sales milestones.

The Cambridge Science Park company will also receive royalties on sales of products originating from this collaboration, which can reach double digit if products are based on Discuva’s proprietary early-stage antibiotic programs.

Horizon Discovery’s upcoming IPO – revealed first by Business Weekly and the FT this week – has a provisional target of £25 million but that will be entirely new money in what will be a heavily over-subscribed gold rush. It will probably generate more than that with existing investors facing the dilemma of whether to ‘hold ’em or fold ’em.”

A bonus windfall from its Nasdaq float enabled GW Pharmaceuticals to accelerate a development programme for childhood epilepsy in the US. CEO Justin Gover revealed that GW’s successful follow-on offering actually raised $101 million

Wireless company CSR’s amazing cash-generation capability continues apace and along with its Q4 and full year results it announced a bonus $50m shareholders buy back.

Other deals that caught the imagination for their significance rather than any eye-watering values included the £1.325m acquisition of Opus Instruments by digital imaging technology business SDI.

New applications for Opus’ hi-tech camera – currently used to examine works of art – are being explored by the new owners. The Osiris cameras have been used predominately in art galleries and museums around the world to examine work by artists such as da Vinci, Rembrandt and Watteau. Now SDI wants to stretch the legs of the technology.

Wireless business Zinwave, a leader in its segment, was sold to US multinational McWane Technology for an undisclosed but significant sum but maintains its Cambridge IP and will be handed cash to fund global expansion in a boom market. Virginia born family firm McWane is a division of one of the largest privately-held companies in the US.

Bourn Hall – the world’s first IVF clinic – raised expansion capital and is seeking acquisition opportunities in the field of fertility technology. It teamed up with Mobeus Equity Partners to secure an initial minority investment of £3.5 million. The war chest will be supplemented by a commitment to invest significant follow-on financing to further its expansion. Mobeus is keen to do more business and make further investments in the East of England; it recently funded an MBO of Norwich based Virgin Wines.

Let’s leave the last word to life sciences. Just as Horizon Discovery was commercial from Day One, so Vectura Group plc is a cash-generating machine. Vectura reaped €4.5 million (£3.6m) through fresh milestone payments in Germany, Romania and Belgium. The cash-rich company outlined the strength of its drug pipeline in an interim management statement which suggests that milestone payments and royalties will continue to flow.

Much the same could be said for the Cambridge life science cluster in general as it continues to mature at a rate that has made Big Pharma sit up and take notice. Some potentially major acquisitions are on the radar for 2014.

• PHOTOGRAPH SHOWS: Justin Gover, CEO at GW Pharmaceuticals

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