Lilly is among investors who have set up a £47.5m ($80m) venture capital fund that seeks to capitalise on the UK’s life sciences sector.
It is Lilly’s first investment in a UK life sciences venture fund, and the firm has contributed “significant capital” to the tally raised by Edinburgh-based Epidarex Capital, which was formerly known as Rock Spring Ventures.
The fund – which was also backed by King’s College London and other research-focused universities – will be used to invest in early-stage life sciences and health technology companies, according to Epidarex.
The fund will also tap into Epidarex’ links with Scottish universities – including Edinburgh, Glasgow and Aberdeen – and try to encourage the creation of spin-out companies, said the investors.
Around half of the fund comes from these universities and money from the European Investment Fund, and £4m has already been used to back spin-out Edinburgh Molecular Imaging, which is developing fluorescent imaging reagents that detect harmful processes inside the human body.
Elaine Sullivan, VP of global external R&D at Lilly, said the investment “reflects Lilly’s strong belief in the excellence of life science research and development in the UK”.
The creation of the fund comes after a long period in which the search for funding in the UK life sciences sector has been a dry and arduous task, but of late there have been signs that supply is flowing more freely.
This year has already seen allergy specialist Circassia raise £200m in an initial public offering (IPO) after years in which a small biotech companies had to partner with a larger company at an early stage, rather than go it alone.
Meanwhile, investor Neil Woodford – formerly of Invesco Perpetual – announced plans recently to set up a £4.5bn investment fund that will in part focus on life sciences and biotechnology start-ups.
The Woodford Investment Management fund opens for business next week and aims to tap into the expertise located within the ‘golden triangle’ of Oxford, London and Cambridge.
That area is also the focus of the new MedCity initiative in London, which got underway in April with a £4m warchest to try to create a hot-spot for new life sciences start-ups in the capital with close proximity to both the golden triangle and the UK’s primary financial sector.
“The completion of our fund is a significant validation of the UK’s life science research base,” said Epidarex’ managing partner Sinclair Dunlop.