half year results 2016 7 april 2016 - imperial …...our valuation policy 9 imperial innovations...

Imperial InnovationsHalf year results 2016

7 April 2016

Agenda

01 Overview – Russ Cummings, CEO

02

03 University relationships – Tony Hickson, Managing Director, Technology Transfer

04 Summary – Russ Cummings, CEO

2 Imperial Innovations – Half Year Results 2016 All numbers as at 31 January 2016

Portfolio update – Dr Nigel Pitchford, CIO

Russ Cummings, CEO

1 Overview

Imperial Innovations - Full year results 20143

4

Main developments of HY16

Imperial Innovations – Half Year Results 2016 All numbers as at 31 January 2016

New strategic relationships build further Golden Triangle network

• UCL Technology Fund – formalises links with another world class university

• Apollo Therapeutics – linking three world class universities with three global pharmaceutical companies

Strengthened balance sheet through £100m placing

NAV at 31January 2016 £415.9m (pro forma including placing £512.9m)

Continuing momentum across the portfolio

Increased rate of investment £38.9m year to date

Three major private funding rounds into maturing portfolio

Delivering on commitment to build ICT & Digital portfolio

Continuing momentum across the portfolio


£10m invested in new companies

Six new companies added

Five in ICT & Digital sector

£17.5m invested in existing

portfolio

£31m committed

Three major funding rounds

completed

New investments Scale up Milestones

Wireless connectivity, oil well

instrumentation, cybersecurity,

machine learning, artificial learning,

augmented reality displays

£19.0m

Series A round

£60.0m

funding round

(post period)

£31.5m

Series A round

Achievements

Approaching soon

Cat Phase III

ARHL Phase II

FLIXOTIDE®

approval

Combination

studies

Phase I in UC

Customer wins

Financial highlights

6

£27.5m invested across 17 companies – further £60m of commitments

Net portfolio value up by £27.9m to £355.1m (FY 2015: £327.2m)

Net assets £415.9m (FY 2015: £420.1m) (pro forma including placing £512.9m)

Pre-tax loss £5.9m (H1 2015: pre-tax loss of £7.0m) reflects £9.8m decrease in value of

quoted portfolio

At 31January 2016 cash £91.6m (H1 2015: £152.8m, FY 2015: £128.1m)

£238.6m available for investment including £97.0m from Placing (February 2016) and

undrawn £50.0m second EIB loan


Key components of value (£m)

7

415.9

355.1

91.6

50.0 (50.0)

(28.7)

(2.1)

327.2

27.5 (12.2)

Other NAV

31 Jan 2016

Cash

31 Jan16 EIB Loan

Facilities

Opening Net

Portfolio Value

NPV

31 Jan16 Investment Realised

Gains

Fair Value

Losses

(0.1)

Unrealised

FV Gain

12.7

Second facility

First facility fully drawn


512.9

97.0

Placing

Feb 2016Pro forma

NAV

£238.6m

available

Key movements in portfolio value (£m)

106.8

220.4

8

100.0

255.1

24.5

3.0

12.7

(0.1)

(9.8)

Investment FV Gains Realised

Gains

FV loss

Quoted

Unquoted

31 July 2015 31 January 2016

0.0

(2.4)


0.0

Our valuation policy


Portfolio split by valuation policy

Net portfolio value £355.1m• Quoted £100.0m

• Unquoted £255.1m

Fair value of unlisted securities is based

on IPEVC guidelinesQuoted £100.0m

£5.8m at

multiple of

sales

£212.4m cost or last

funding round

£36.9m at last funding round

adjusted for milestones or

impairments

Cost Value

Quoted £47.6m £100.0m

Unquoted

Cost or last round £163.7m £212.4m

Last round adjusted £26.6m £36.9m

Multiple of sales* £0.0m £5.8m

Total £237.9 £355.1m

* Comprises three companies in which Innovations has Founding Equity but where no

investment has been made

Dr Nigel Pitchford, CIO

2 Portfolio update


Established portfolio – with exciting pipeline

Maturing portfolio comprises 45

accelerated growth companies

• Businesses we know intimately and can

grow with ambition

• Account for 98.9% of portfolio value

Added six new companies in H1

Focus on four key sectors

Top 10 companies valued at £232.6m

• 65.5% of total portfolio value (£355.1m)

Flexibility to allocate funds across sectors

and stages

With co-investors have invested >£1.3bn in

UK innovation since 2006


67.0%

10.2%

18.7%4.1%

Therapeutics Medtech &Diagnostics

Engineering &Materials

ICT & Digital

% of portfolio value represented by top 10 portfolio companies 31 January 2016

Scaling investment in technology


Company Invested Overview of the business

University of Cambridge spin-out that has developed technology used by oil well companies to

enhance oil recovery. Received initial funding of $3.0m from Innovations and Cambridge

Enterprise, together with grant funding from the UK government.

Company set up two years ago by an Imperial College Engineering graduate that is creating

wireless electronics kits that allow anyone to build their own smart inventions.

London-based cybersecurity firm which completed a £2.0m seed funding round in August

2015. Innovations committed £1.6m to the round alongside angel investors.

London-based machine-learning start-up addressing the data-as-a-service (DaaS) market.

Completed a $13.0m Series A round in January 2016, led by Innovations, with Wellington

Partners, Oxford Capital, Delin Capital and AME Cloud Ventures.

London-based start-up that uses artificial intelligence ("AI") to interpret the content of the

World Wide Web. Completed a £1.5m seed funding round in October 2015.

Oxford-based developer of Augmented Reality (AR) technology displays. Innovations led the

funding round in December 2015 alongside Robert Bosch Venture Capital GmbH, Octopus

Ventures, angel investors and existing investor Blippar.

£2.0m

£1.0m

£1.6m

£2.6m

£1.3m

£1.5m

Delivered on our commitment to increase our focus on technology

£10.0m

Putting our capital to work

13

Invested

H1 2016

Funding

round

Comments

£3.3m £31.5m

Series A

Jan 2016

£10.0m

committed

• Clinical cancer genomics company

developing using circulating tumour DNA

(ctDNA) analysis to develop blood test for

cancer

• Syndicate includes Cambridge Innovation

Capital, Johnson and Johnson Innovation

(JJDC) and Woodford Patient Capital

Funding will be used to accelerate clinical

studies to validate technology platform

and commercialise first product.

Invested

H1 2016

Funding

round

Comments

£0.4m £19.0m

Series A

Dec 2015

£6.0m

committed

• Developing novel therapeutics for

treatment of multiple myeloma and other

cancers

• Syndicate comprises Innovations and leading

venture investors SV Life Sciences and

Abingworth

• Funding to start clinical studies of lead drug

candidate KES-0001 in multiple myeloma

Invested

H2 2016

Funding

round

Comments

£3.9m

2 Feb 2016

£60.0m

2 Feb 2016

£11.3m

committed

• Developing first-in-class, small molecule

drugs that selectively target

deubiquitylating enzymes (DUBs) for

treatment of cancer

• Syndicate includes Sofinnova Partners, SR

One, Roche Venture Fund, Pfizer Venture

Investments and Woodford Patient Capital

• Advance series of first-in-class small

molecule drug candidates into the clinic

£27.5m invested in 17 portfolio companies

Led three major funding rounds in companies

identified for scale up

Six new companies added to accelerated growth

portfolio at a cost of £10m

Total investment year to date of £38.9m


Continuing momentum in portfolio


Successfully demonstrated therapeutic equivalence to GlaxoSmithKline’s FLIXOTIDE® pMDI for prophylactic

treatment of asthma. Will result in UK’s Medicines and Healthcare products Regulatory Agency issuing

national marketing licence.

Initiated study to assess the safety and efficacy of combining Merck's Keytruda ® (pembrolizumab) with EnAd

to treat patients with carcinomas. Announced first treatment of a patient combining EnAd with paclitaxel

in ovarian cancer (March 2016).

Successful completion of Phase I trial of lead product TOP1288 in ulcerative colitis.

Signed licensing agreement with listed US biotech for the development of Antibody-Drug Conjugates ("ADCs")

based on its ThioBridge™ technology. Abzena will receive initial licence and target nomination fees, with the

potential to receive further licence and milestone payments of up to $150 million. Also strengthened its

position in the US through acquisitions of PacificGMP and The Chemistry Research Solution.

Initiated second programme in clinical trials with the start of a Phase I clinical evaluation of AUT002006 in

schizophrenia.

New customer wins including a five-year agreement with UK mobile payment innovator Zapp and new

project with Camelot, the UK National Lottery operator.

The performance of the portfolio continues to be encouraging

Key portfolio news flow next 12 months

• Publication of results of CAT-SPIRE Phase III registration study

• Start of grass allergy registration study

• Results of house dust mite Phase IIb study

• Start of manufacturing at 20 tonne plant in Oxfordshire

• New laboratory in Asia

• Extension of the MIMICS-2 study to include Japan

• Commercial sales in Europe

• Phase I combination studies: EnAd & Merck’s Keytruda® (PD-1); EnAd and paclitaxel

• Collaborations around Armed-EnAd next-generation platform

• Broadening of product pipeline

• First results from Citadel Phase II study

• Phase IIa clinical study in Ulcerative Colitis

• Start of Phase I clinical study in ophthalmology

• Candidate selection for a broad series on novel first-in-class therapeutics

• Implementation at the company’s 100th customer (both Universities and Corporate

head offices)


Key portfolio news flow next 12 months

• Completion of Phase II study in age-related hearing loss

• Start of cochlear implant study

• Commencement of clinical development

• Growing commercial sales and expansion in the US

• First two drug candidates expected to commence clinical trials


Tony Hickson, Managing Director, Technology Transfer

3 University relationships


Golden Triangle - cream of UK university research

‘Golden Triangle’ – unrivalled cluster of

outstanding academic research and talent

Innovations’ strategy – focus on quality and

research volume, benefit from proximity

Cambridge

£493m

Oxford

£612m

UCL

£498m

Imperial

£449m

King’s

£229m

Queen Mary

£120m

QS World University Rankings 2015

* Source: QS World University Rankings 2015/16


1 MIT

2 Harvard

3 Cambridge

4 Stanford

5 Caltech

6 Oxford

7 UCL

8 Imperial

9 ETH Zurich

10 Chicago

19 Kings College London

21 Edinburgh

33 Manchester

62 Glasgow

109 Queen Mary

Aggregate research income of >£2.0bn pa

Sourcing opportunities across the Golden Triangle

• Technology pipeline agreement (‘TPA’) until 2020

• Exclusive commercialisation rights

• Outsourced Technology Transfer Office (TTO)

• 50:50 share of IP equity with College

• 2006-10: Innovations worked exclusively with ICL (34 accelerated growth companies as of 31 July 2010)

• 2011-16: 13* new accelerated growth companies inc.Kesios, Inflowmatix, Sub Salt Solutions, TopiVert, Pulmocide

19

• Open innovation ecosystem

• Collaborative relationship with Cambridge Enterprise

• Cambridge Innovation Capital formed 2013: £50m local fund, no rights but ‘home advantage’ – also collaborative partner to Innovations

• Office at Babraham Research Campus & staff living in Cambridge

• 2011-16: 10 new companies including Featurespace, MISSION, Inivata, Aqdot, Silicon Microgravity

• Historical strength in licensing

• Collaborative relationship with UCLB

• New £50m Technology Fund established jointly between

Innovations and European Investment Fund (EIF)

• Fund has visibility of all UCLB projects and Innovations

has co-investment and step-in pre-emption rights

• 2011-16: four new companies including Autifony, Ieso,

Puridify plus later stage Stanmore Implants

• Historically ISIS Innovation took lead role in spin-out

formation

• Collaborative relationship with ISIS Innovation

• Oxford Sciences Innovation (‘OSI’) formed 2015, £320m

local fund

• 2011-16: four new companies including Oxford Biotrans,

Calcico and later stage Oxford Immunotec

Imperial College London University of Cambridge

UCL University of Oxford

* Plus 25 organic growth companies

*

*

*

*Member of Apollo Therapeutics consortium

UCL Technology Fund

20 Imperial Innovations – Half Year Results 2016 All numbers as of 31 January 2016

New companies (2011-2016)

Research income £612m£498m£493m£449m

13 10 4 4

Imperial College London University of Cambridge University College London University of Oxford

£50m fund for UCL spin-outs and licensing (all areas of research)

IVO commitment £25m over five years

£5m earmarked for proof of concept projects over five years

Project Access Agreement ensures Fund sees all UCLB projects

Fund investment rights linked to POC funds

Co-investment and step-in pre-emption rights for IVO & EIF

Opportunity to selectively deploy additional capital from balance

sheet – estimate £75m over the next five years

Collaborative model can be replicated across other universities

Apollo Therapeutics LLP

21 Imperial Innovations – Half Year Results 2016 All numbers as of 31 January 2016

New companies (2011-2016)

Research income £612m£498m£493m£449m

13 10 4 4

Imperial College London University of Cambridge University College London University of Oxford

Unique collaboration between three of the world’s top universities

and three global pharma companies

£40m fund for translational drug development

IVO commitment £3.3m

Combines industrial know-how with early drug discovery

Adds value to TTO’s licensing activity and creates feedstock for

spin-outs

Share of upside, improved decision making but importantly

visibility of therapeutics IP across all three universities

Russ Cummings, CEO

5 Summary


Outlook

Strategy – partner of choice for cream of UK research & talent across Golden Triangle

Group remains focused on long-term value creation

Strong cash position to

• Maintain investment in existing portfolio

• Maximise opportunities expected to arise from new alliances such as UCL Technology Fund and

Apollo Therapeutics

Golden Triangle is an unrivalled cluster of outstanding academic research and we

continue to build our unique and productive networks

Further increase in investment rate

Maturing portfolio provides potential for significant returns and newsflow from

portfolio over the next 12-18 months


Appendices

What we do

Create, build and invest in pioneering technologies developed from outstanding

scientific research

Bridge the gap between scientific research and successful commercialisation

Commercialise IP developed at or associated within the “Golden Triangle”

Strength in team across all stages of technology transfer, intellectual property

licensing, incubation and investment into early-stage, science-based ventures

Provider of long term, patient capital for over a decade

Note: Indicative schematic only, not to scale and not reflective of actual numbers of opportunities resulting in commercialisation/exit


What we have achieved

Since IPO in 2006 we have built a portfolio of 105 companies

Attracted £1.3bn in venture investment for portfolio

Created £100.0m of quoted investments through IPOs

Built an unquoted portfolio worth £255.1m

Generated >£30m in net cash from proceeds of trade sales


Building & retaining value

Investment

Rounds

Value at 31 July 2014

£25.5m

£78.4m

£2.0m£1.75m

£3.75m

£11.75m

A1

C2

A2B

C1 £6.25m

£11.3m

£5.5m

£10.9m

£18.1m

£30.6m

£2.0mLoan notes

C2

A1

B

C1

A2

Multiplier: 2.6x

IRR: 52%

Multiplier: 2.9x

IRR: 38%

Multiplier: 2.9x

IRR:26%

Multiplier: 3.2x

IRR: 19%

Multiplier: 5.6x

IRR: 26%

Total IRR 32%; total

multiplier 3.07x as

of 31 July 2014No fixed time horizon

Strong balance sheet key to retaining value in

later rounds

Business model proven with Circassia

Pharmaceuticals plc

• £2m invested in 2007

• FTSE 250 in 2015

Multiple portfolio companies approaching later-

stage valuation inflection points which need

funding


Top 10 portfolio companies

Company Description % share capital

held

Cumulative cash

invested £m

Net investment

carrying value £m

Speciality biopharmaceutical company focused on treatment

of allergies and asthma listed on LSE (FTSE 250)9.3% 25.5 77.5

Developer of next generation of lithium-ion batteries based

on novel silicon anode material39.3% 22.4 34.1

Specialist in vascular disease and developer of novel,

patented 3-D stent technology47.8% 16.5 23.6

Biotechnology company developing novel therapeutics for

serious disease, particularly cancer27.9% 13.7 22.6

Cellular immunotherapy company developing therapeutics

for cancer and infectious disease27.0% 12.3 21.0

AIM-listed provider of services to global pharma companies

enabling the development of better biopharmaceuticals19.9% 13.0 13.1

Clinical-stage biotechnology company developing narrow

spectrum kinase inhibitors for the local treatment of chronic

inflammatory diseases of the gastrointestinal tract and eye. 30.6% 7.4 11.6

Drug discovery and development company focused on

selectively targeting deubiquitylating (DUBs) enzymes to

treat cancer, neurodegenerative and other diseases.21.2% 5.8 10.1

Developer of a mobile payments and loyalty solution that

combines payment and loyalty via one easy scan51.4% 7.0 9.5

Developer of technology enabling the production of a variety

of bio-chemical products from paper & pulp waste 45.7% 9.0 9.4

*

*

*Quoted company

28Imperial Innovations – Half Year Results 2016 All numbers as at 31 January 2016

Net fair value of top 10 investee companies


Top 10 portfolio H1 2016

30

Company Value 31/7/2015 Invested H1 16 FV movement Value 31/1/2016

£79.8m - £(2.2m) £77.5m

£34.1m - - £34.1m

£20.9 £2.7m - £23.6m

£22.6m - - £22.6m

£21.0m - - £21.0m

£17.8m £2.5m £(7.2m) £13.1m

£7.5m - £4.0m £11.6m

£6.0m - £4.1m £10.1m

£9.5m - - £9.5m

£9.4m - - £9.4m


Summary financial information

31

H1 16 H1 15 FY 15

Balance Sheet

Net portfolio value 355.1 262.0 327.2

Net asset value 415.9 397.8 420.1

Cash flow

Investments in portfolio companies (27.5) (21.6)* (60.0)

Net proceeds from sale of trade investments 0.1 3.8 6.2

Net cash flow from investments (27.4) (17.8) (53.8)

Key revenue and expenditure items

Revenue 2.2 2.8 5.1

Cost of sales (primarily revenue share with ICL) (0.8) (1.0) (1.8)

Gross profit 1.4 1.9 3.3

Other administration expenses (6.9) (5.1) (11.6)

Underlying net operating costs (5.5) (3.2) (8.3)

Net change in fair value of investments 0.5 (7.4) 21.3

Carried interest plan (charge)/release (0.9) (3.1) (1.2)

Net interest receivable - (0.5) 0.9

Reported loss/profit (5.9) (7.0) 15.1

£m

* Reflects non cash investment of £0.8m in Abingdon Health


Kesios Therapeutics

32

Treating

blood-related

cancers

Overview Market opportunity Milestones completed

October 2014Kesios’ academic founder commenced

trials for new cancer drug in multiple

myeloma patients. The research was

funded by the Biomedical Catalyst

scheme.

October 2014Imperial Innovations completed £1.85

million investment into Kesios

May 2015Appointed Dr Paolo Paoletti as

Executive Chairman

December 2015Closed £19m series A funding round.

Syndicate compromises Innovations

and leading venture investors SV Life

Sciences and Abingworth

Kesios is developing therapeutics for

the treatment of multiple myeloma

and other haematological cancers.

The company is founded on research

developed by Prof. Guido Franzoso of

Imperial College London whose team

identified a novel post-transcriptional

drug target within the NFκB signalling

pathway that appears critical in

promoting cancer cell survival in

certain white blood cells of patients

with multiple myeloma and other

malignancies. Kesios is developing

drug candidates that disrupt this

target and selectively kill cancer

cells.

Multiple myeloma is an incurable

disease of the bone marrow which

accounts for 2% of all cancer

deaths. In excess of 100,000

patients are diagnosed with the

disease each year in the US, Japan

and Europe.

Existing therapies at best only

induce short-term remission rather

than curing the disease. The current

market for treatments was

estimated at $2.3bn in 2009,

forecast to reach $5.3bn by 2018.

Paolo Paoletti MD

CEO

Dr Paoletti was the first, appointed

president of GSK Oncology with

accountability for all the activities

from early drug discovery through

clinical development, launch and life

cycle management.

www.kesios.com


49.8%Percentage of

issued share

capital held

£3.3mCumulative cash

invested

£5.7mNet investment

carrying value

MISSION Therapeutics

33

Overview

MISSION Therapeutics is a

specialist pharmaceutical

company developing cancer

therapeutics based on new

molecular understandings of

human cell biology and the DNA

damage response.

The company is developing small

molecule drugs that target

deubiquitylating enzymes (DUBS)

involved in the DNA damage

response, with the aim of inducing

synthetic lethality, a powerful

mechanism to selectively kill

specific tumour cells.

Market opportunity

DUBs are a previously unexploited

therapeutic target which may be

relevant to many diseases including

cancer, inflammation,

neurodegeneration, muscle wasting

and infectious disease.

Though its main focus is on cancer

treatments, MISSION’s DUB platform

gives it the potential to explore

multiple additional DUB targets of

relevance to other disease

indications both internally and

through partnering programmes.

Milestones completed

November 2013

£20m Series B funding

January 2015

Appointment of Dr Anker Lundemose

as CEO.

September 2015

Awarded a £1.9m grant from

Innovate UK.

February 2016

£60m funding round jointly led by

Innovations and a new investor,

Woodford Patient Capital Trust Plc,

with follow-on investment from

existing shareholders Sofinnova

Partners, SR One, Roche Venture

Fund and Pfizer Venture

Dr Anker

Lundemose

CEO

Formerly CEO of Norwegian

vaccine company Bionor Pharma,

Dr Lundemose brings more than

25 years extensive experience to

MISSION as it transitions from

discovery to development.

Mission is his fourth CEO position

and he has been involved in a

total of six biotech exits/IPOs.

www.missiontherapeutics.com

Leading the

DUB field


21.2%Percentage of

issued share

capital held


invested


carrying value

Inivata

34

Overview

Inivata is a clinical cancer genomics

company spun out of Cancer Research

UK in September 2014. The company

is focused on developing clinical

applications of circulating tumour

DNA (ctDNA) analysis to improve

cancer treatment through simple

blood tests.

Inivata’s founders are recognised

leaders in the clinical genomics and

ctDNA fields having developed

pioneering ctDNA and novel

treatment approaches in Cancer

Research UK-funded laboratories at

the University of Cambridge.

Market opportunity

ctDNA analysis has the potential to

improve the monitoring and

treatment of cancer based on

information from routine blood

samples.

Inivata is seeking to work with

industry and academics to develop

new clinical applications for ctDNA

analysis which will bring real benefits

to physicians, patients,

pharmaceutical companies and

payers. Inivata’s goal is to provide

physicians with the information they

need to provide the best outcomes

for patients and effective design for

clinical trials.

Milestones completed

September 2014Raised £4m in funding round led by

Innovations and including Cambridge

Innovation Capital and Johnson &

Johnson Development Corporation.

March 2015Announced partnership with US

Biodesix to develop Next Generation

Sequencing (NGS) blood based tests

for applications in lung cancer. Also

appointed Jeffrey Buchalter as

Chairman

January 2016Completed a £31.5m Series A funding

round led by Innovations with

Woodford Patient Capital Trust joining

the syndicate.

Michael Stocum

CEO

In a 20 year career Michael has held

corporate roles in pharmaceuticals

with GlaxoWellcome/GSK, biologics

at Organon and molecular

diagnostics at Organon Teknika

www.inivata.com

Revolutionizing

Personalized

Medicine


27.3%Percentage of

issued share

capital held


invested


carrying value

half year results 2016 7 april 2016 - imperial …...our valuation policy 9 imperial innovations...

Documents