Oxford Genome Sciences closed funding round over Easter.

One of the eight companies at last month's first BioInvest, a new showcase for companies seeking investment, showed that biotech can still ring investors' bells, as it closed its second financing round two days before BioInvest opened its doors. Oxford Genome Sciences, having inked a new collaboration with Bayer's diagnostics division, closed the second tranche of a two-part seed financing on 23 March 2005, led by South East Growth Fund and bringing in first time investor, Oxford Capital Partners.

Oxford Genome Sciences bought the former Oxford Glycosciences intellectual property and library of disease-related proteins 18 months ago and aims to build the world's largest proteomics database as part of a service and drug discovery business model.

Although there will always be more ideas than there are funds to foster them, companies with good drug ideas and especially solutions to drug discovery bottlenecks can attract an investment audience.  So it was at BioInvest, when the UK Department of Trade and Industry played host to a group of investors interested in getting a first glimpse of eight shiny, new companies in biotechnology and bioinformatics that are currently seeking finance for their ideas. 

Not only is the government putting its weight behind the UK biotech industry through its UK Trade & Investment organisation, set up to support companies trading internationally and to encourage overseas companies to set up or expand in the UK, but there now exists a network of Regional Development Agencies all of whom have biotechnology very much in their sights with encouraging local clusters high on the agenda.

The BioInvest meeting on March 29 was the brainchild of two support organisations based around the Oxford biotech cluster, namely Dr Jonathan Rees of the UK Bioinformatics Forum and Lin Bateson of the Oxford Bioscience Network, both based at Oxford Brookes University. In addition to UK Trade & Investment, BioInvest was supported by the Regional Development Agency for the South East, SEEDA, which provides a gateway to funding and grant organisations and can provide finance directly to qualifying companies. Adding marketing communications input was life science PR specialist, Northbank Communications, which has offices in the South and North of England and in Munich, centre of one of Germany's biotech clusters.

Promising New Ideas for Drugs

Nearly ten years ago, in 1996, Robert Feldman was dreaming up the idea of a biotech company that was ultimately to become Microscience. He went to the Technology Transfer department in the University, which in those days was just one person.

"I want to start a biotechnology company!", announced Feldman.

"Great, " said the Tech Transfer manager, "Let me know how you get on."

Times have changed. Ten years on and two biotech companies later, Dr Robert Feldman expertly showed how to pitch a company to an investment audience with his introduction to RioTech.  A spinout from Imperial College with some heavyweight scientists on board, the new company reckons it has in its interferon alpha 8 molecule, a cleaner drug than the traditional alpha 2 versions and is set to develop its drug for the $2 billion Hepatitis C market.  Its investment offering is a 'win or bust' strategy, with its first milestone reachable in 2006, royalties following thereafter and no more funding required.  Money now is purely needed to 'package' its drug for out licensing.

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Tackling two very intractable problems, asthma and eczema, is Surface Therapeutics.  Founded only late last year, it nevertheless has an 18-year pedigree in genetic research and expression profiling and mapping through its founding scientists Prof Bill Cookson and Dr Miriam Moffat. They have built a 'target generating' platform technology and will be validating enzyme targets with therapeutic and diagnostic potential in allergic inflammatory disease in the body's 'boundary areas'  - the mucosal and epidermal surfaces.  They hope to be at the pre-clinical stage with one of their three lead products in nine months.  The plan is to stay small, outsource development up to Phase I and then partner or out licence.  They have already raised £1.5million and are anticipating a second round this November.

Smoking and Diabetes

G-nostics is leading the way in personalised medicine with its NicoTest(tm). Using web-based techniques, the package offers analysis of two gene variations and the behavioural traits of the smoker and then selects the best of the available quitting treatment programmes, which should ensure correctly tailored dosage and minimal adverse reactions.  Early ABC 1 adopters are already test-marketing the product and funding is sought for product rollout.

Optical measurement is Lein Diagnostic's non-invasive solution (no pin-pricks and test strips) for diabetics to check their glucose levels, something they have to do about four times a day. Lein is developing a hand-held device, the size of a mobile phone, which will shine a light into the aqueous humour at the front of the eye to measure glucose levels. This is expected to be ready for the market in 2008 and they are looking for £4million to get them there.

Hospital focused

Two ex-big pharma executives have set up Opal Healthcare which has three aspects to it: an international business in healthcare products, a hospital market in generic injectables and a development division looking to improve either the delivery or content of the injectibles. Opal is looking for £5million to fuel its expansion.

Pass the data

Managing data is of course one of the bigger challenges for the drug developer and two bioinformatics companies have entered the market to help solve the conundrum of why more R&D spending is resulting in fewer new drugs. For a start we need to make better use of scientists' time.  According to Arthur D Little, Dr Andrew Payne of Intellidos reminded the audience that scientists spend 31 per cent of their time in meetings or other communications, 24 per cent waiting around for things to happen, quite a bit of time on administration and only 11per cent being creative. 

The balance seems to be spent on re-inventing the wheel. The latter could certainly be avoided and the other misuse of time lessened if large companies could access their own data more effectively. This is where Intellidos comes in with its 'google' for scientists that unlike the original search engine can hunt for data and numbers as well as text and collect together 'dossiers' of information around a given subject.  A major pharmaco has signed up to evaluate Intellidos' software and the company is looking for finance to achieve a potential £100 million market for its product, which represents just 2 per cent of the whole market.

Another aspect of data management is getting different systems to talk to each other.  Some of the top bioinformatics names from Genoscope, the French Sequencing Centre and from the Human Genome Project have got together in Paris to form Genomining.  The company has developed a 'generic' computing infrastructure that avoids the problem of proprietary products and allows the user to access databases and obtain updates.  In other words, one platform fits all.  It is currently raising €3 to 4 million to continue its development and market the product.  As founder William Suarin said, "In the first phase of introducing a completely new idea, it takes time to evangelise."

One venture capitalist at BioInvest made the point.  'We look for investment opportunities obviously but we are also always on the lookout for partnering prospects for our current companies and this is where meetings like this are so valuable.'

Source: UK Bioinformatics Forum and Oxfordshire Bioscience Network.