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University signs £27m deal to capitalise on its research base

01 December 2006

Cardiff University yesterday announced a groundbreaking agreement for the commercialisation of research-generated intellectual propertyin Wales, following a £27m deal with London stock market-listed Biofusion. Following a strategic review, which involved discussionswith a number of financial institutions globally, the university hasentered into a 10-year agreement with AIM-listed Biofusion, which has been given exclusive rights to commercialise all intellectual property derived from research at the university.

 

The deal also sees Biofusion taking over the university's equity stake in its portfolio of spin-out companies.

 

In return Biofusion has agreed to finance an £8.2m ring-fenced fund to back research and spin-out activity at the university, as well as giving Cardiff University a 29% stake worth £17m in its own business, and a further £2m in its other investments.

 

The deal also includes a one-off payment of around £180,000 to the university and a fixed monthly payment of £17,500, which will be re-invested directly for the protection of IP.

Over the period of the agreement it is expected that up to five spin-out companies from Cardiff University will be created every year.

 

The deal in effect allows the university to concentrate on what itdoes best - research - with Biofusion bringing its expertise, and importantly its ability to leverage additional finance, to bear in helping to maximise returns from the commercial exploitation of IP.

 

David Baynes, chief executive of Biofusion, said, 'This agreement with Cardiff is a significant milestone for Biofusion.

 

'In under two years we have completed agreements with two of the UK's top 10 research-intensive universities, which demonstrates the attractiveness of the Biofusion model for commercialising UK university research.

 

'The Cardiff agreement allows us to build on our already successful partnership with the University of Sheffield by securing access to a further high-quality IP pipeline and allows us to expand our portfolio into non-life science research.

 

'Cardiff is one of the UK's leading research universities, with high-quality research in a range of potentially high-value fields including medicine, biological sciences, pharmacy, chemistry, engineering,computer science, energy and environmental sciences.

 

'We are eager to start working with the team there in order to best realise the commercial potential of this research.'

 

The vice-chancellor of Cardiff University, Dr David Grant, said, 'We are delighted to have signed this agreement with Biofusion and look forward to a successful, long-term partnership. The Biofusion modelis an extremely attractive one, making the university a significant shareholder in Biofusion, providing access to its investment fund and management team, as well as incentivising the university's academic researchers through significant shareholdings in the spin-out companies.

 

'The agreement should enable all parties, and the Welsh economy, to benefit from the successful commercialisation of our world-class research.'

 

The university was advised by Dr Godfrey Ainsworth, managing partner of Cardiff-based Gambit Corporate Finance, and Rachelle Sellek of M&A Solicitors.

 

Dr Ainsworth said, 'I am delighted to have concluded this deal formy Alma Mater. We worked hard to align the interests of Biofusion and the University.

 

'The new fund provides great leverage for the acceleration of commercialisation of intellectual property from one of the UK's foremost research institutions.'

 

Dr Ainsworth is a director of the Cardiff Partnership Fund.