Global biopharma group Sosei Heptares, which has European research operations in the Cambridge UK science & technology cluster, is plotting what it says will be a potentially transformative acquisition to underpin global growth.

Without going into details, the Japanese-owned business believes the acquisition will provide a pathway to expansion and counter the hit on finances caused by the coronavirus pandemic.

The company has just raised $194 million and says it will use most of the cash on the game-changing deal.

Shinichi Tamura, chairman, president and CEO of Sosei Heptares, said: “Sosei Heptares has made good progress in the first half of 2020, our 30th anniversary year and a period that has presented significant challenges for businesses globally. 

“Our response to these challenges has been rapid and impressive, allowing us to ensure employee safety and maintain a high level of business continuity. 

“We have added another major pharma partnership with AbbVie and have secured the long-term growth capital we require to execute our ambitious corporate objectives. 

“These include both organic and inorganic strategic options including a potentially transformative acquisition, as well as investments that enhance our own world-leading discovery and early development capabilities. 

“We are excited by the future and motivated more than ever to build a profitable, global biopharmaceutical company delivering novel drug candidates to treat serious disease as well as value for shareholders.”

The new global agreement signed with AbbVie is particularly significant for Sosei Heptares: the discovery collaboration and option to license collaboration will initially focus on discovery of novel small molecules targeting inflammatory and autoimmune diseases. 

The company will conduct and fund R & D activities through Investigational New Drug (IND)-enabling studies. For the first target, the company is eligible to receive up to $32m in upfront and near-term milestone payments, as well as potential option, development and commercial milestones of up to $377 million, plus royalties on global sales. AbbVie has the option to expand the collaboration up to a total of four targets.

Revenue for the six months to June 30 declined to $23.2m – primarily due to the absence of major milestone payments from existing collaborations. 

The company expects to achieve new upfront and milestone payments later in the fiscal year.

Frontier Developments, the Cambridge-based world-leading video games developer, has three times topped the magical $billion valuation in the space of a month.

While only privately held startups qualify as unicorns, Frontier’s achievements set against the impact of COVID-19 on capital markets is little short of sensational.

And there is much more to come: The industry is already valued at $150 billion and is forecast to grow at a conservative 10 per cent a year.

Frontier first topped the $billion mark on June 2 and again on August 3 and went even higher on Tuesday morning when the UK markets opened.

Frontier has gone from strength to strength since transitioning to a new business model and listing on the AIM market in 2013 and 2020 marks a golden age despite coronavirus.

The company has a number of highly anticipated partnerships on the table that are being rolled out imminently and over the coming years; its strong track record over many years as both a developer and a publisher has seen its share price grow more than ten-fold in less than four years. 

Frontier’s ‘launch and nurture’ strategy for its immersive games including Elite Dangerous, Planet Coaster, Jurassic World Evolution and Planet Zoo, is holding the business in high esteem within the gaming community.

Its recently established foothold in the third-party publishing business also has investors excited. With five development partners signed in less than 12 months, this publishing business looks set to add further value to Frontier’s already prosperous portfolio.

Iconic founder and CEO David Braben said: “We’ve had another great year, despite the challenges of COVID-19. We achieved our biggest PC launch to date with Planet Zoo, we agreed two major new IP licences – with Formula 1 and Games Workshop – and we signed our first five third-party publishing deals. 

“Our terrific team have coped so well during the pandemic – working from home they continue to collaborate to produce amazing content to support our player communities around the world.”

“Rich, community-focused games like ours that are attractive to play but take years to master, have performed very well during these challenging times and we have every expectation of them continuing to do so, notwithstanding the macroeconomic uncertainties presented by the pandemic.”

Frontier has moved metaphorical mountains to curate the welfare of staff since taking the decision at the start of lockdown to move operations out of office for the time being and says its teams have adopted superbly to remote working.

Braben says: “In an environment where creative coding and collaborative ideation are at the centre of the working day, you might think that the business would find it challenging to connect a team of 550 people, but we have managed to pivot to remote-working so effectively during a time where many businesses are finding it difficult to maintain productivity.”

Frontier has initiated weekly video updates from Braben to staff and maintained continued support for mental wellbeing with a dedicated psychotherapist, life-coach, group counselling sessions, care packages and virtual yoga and meditation classes made available to employees. 

The company has also launched an internal hub with information on coronavirus and collaborative advice on how best to work from home. The Cambridge Science Park office remains open for a handful of employees who are valuing some social support but there are no immediate decisions for the full workforce to return to HQ.

Frontier is making plans for a potential phased return later this year while keeping a close eye on advice from the Government. 

It has also found time and money to sponsor the Centre for Computing History in Cambridge to lend support to the museum’s ambitious video game preservation project. The centre contains the largest documented collection of video games in the UK.

Braben said: “As someone who has been in the video game industry since 1981, I believe the work that the museum is doing in ensuring that those early computers and video games are preserved for future generations to enjoy and learn from is vital. 

“A whole generation of programmers learned on the open and easy-to-program machines in those early years and have gone on to found major companies. This was the inspiration behind Raspberry Pi, too, to give that opportunity to new generations. I would urge other game and software developers to support the Centre for Computing History and ensure that our legacy is carefully preserved and well-documented.”

• For the record, Cambridge boasts 18 unicorns – companies that hit the $Bn valuation mark as privately owned startups. Abcam, Arm, Autonomy, AVEVA, Blinkx, CAT, Chiroscience, CMR Surgical, CSR, Darktrace, Domino, Improbable, Ionica, Marshall of Cambridge, Prometic, Solexa, Virata, Xaar.  
Of course, the science & technology cluster is also home to a number of multi-billion dollar valued businesses that are quoted and Frontier Developments this week joined the likes of AstraZeneca, GW Pharmaceuticals, Domino Printing, AVEVA, Johnson Matthey and Bicycle Therapeutics in that coveted cohort.

Do you remember football pools, Green Shield Stamps and Christmas Clubs – those quaintly old-fashioned ways in which our grans and grandads saved or squandered their money? All gone – replaced by the National Lottery, loyalty cards and overdrafts!

The sole survivor of that bygone age – until recently – has been the mail order catalogue. Now even that is about to fade into memory as Argos, the Catalogue of Catalogues and ‘book of dreams’ is to cease publication after 50 years as the go-to source for housewares, toys, gadgets and gizmos.

Is this the oft proclaimed end of print and press advertising as we know it? 

An end hastened by the rise of on-line shopping and the COVID-19 pandemic – in much the same way that online or smart phone payment has done for cash?

Well, yes and no. The convenience and flexibility of online shopping (and the instant updatability of the offer – no need for reprints) obviously scores over catalogue sales. But there’s more to print advertising than catalogues.

The thing about on-line shopping is that you must seek it out – and generally have to have something specific in mind. The beauty of a press ad or a billboard (at least from the advertiser’s point of view) is its intrusiveness. It thrusts itself on the public’s attention whether they like it or not, drawing their notice to a product or service they might otherwise be unaware of and might actually find quite useful or desirable.

Print has other advantages that online media does not. It has status, permanence, and authority. 

Take status. As makers of top car marques and luxury goods know, nothing quite captures the prestige of their products better than a high-quality brochure. Ditto the Annual Report and Accounts of a big corporation or the prospectus of a university.

Then there’s permanence. Digital media is ephemeral. It comes and goes in the blink or an eye. Printed material can be kept, filed and referred back to.  Even just lying around it serves as a constant reminder (see intrusiveness above).

And nothing matches the authority of print. Can you imagine a clergyman reading a tablet from the pulpit rather than the Bible? People trust the printed word (some even believe what they read in the tabloids!) so if you want to bolster your credibility, appear in print.

The truth is that the best marketing strategy is one that combines both traditional and digital media – or tradigital marketing as we call it.  Both bring different things to the table and together are greater than the sum of their parts.

Above all, though, it should be remembered that methods change but values don’t. People will always be looking to shop, save or indulge their appetites.  The shrewd advertiser is the one who recognises that it is the message that is key – whatever the means of delivery.

simpsonscreative.co.uk/

The UK would like to apologise if it has failed to wreck relationships with any of the world’s leading trade powers. Oversights can happen.

Now estranged from the EU with potentially disastrous consequences – only 26 member countries so a mere bagatelle; China offended potentially to the point of no return (who needs their billions and job creating technology?); and relations with a probable new US President sabotaged through an inability to stand up to the bullying present incumbent.

Not much damage done there then! The EU, taken as a whole is the UK’s largest trading partner with two-way trade worth £672 billion. In 2019, UK exports to the EU were £300bn (43 per cent of all UK exports). UK imports from the EU were £372bn (51 per cent of all UK imports).

In 2019: UK exports to China were worth £30.7bn; imports from China were £49bn. In 2019, non-real estate related foreign direct investment from China into the UK reached an estimated $8.3bn, compared to $6.1bn for the whole of 2018, according to Deloitte.

Two-way trade between the UK and US was around $261.9bn at the last count. How will a new President react to Britain’s apparent slavish adherence to every demand Trump makes on PM Boris Johnson – not least the crazy decision to dump Huawei from the 5G implementation on this lovely little island of ours?

So looking at UK trade with the EU, China and US alone that totals £1.014 trillion’ – not to be toyed with or risked one might be inclined to believe.

So. Hearty congratulations should be extended at this time to all those British voters who returned the Conservatives to power with a huge majority in the General Election. 

You gave them a mandate and almost certainly did not consider that you might suffer such a backlash. But almighty backlash there will almost certainly be.

We are told that wealthy Brits, chiefly business executives, will bear the brunt of an anticipated tax tsunami as the Government bids to claw back the scattergun and non-strategic outlay on an appallingly incompetent response to countering COVID-19 and salvaging some remnants of an economy.

Despite having to contend with the fallout from what is either a corrupt or incredibly incompetent UK government – depending on your point of view – companies are facing the trickiest trade climate one can remember in recent times. 

They will almost certainly have to go it alone and hope the Government does not place too many impediments in the way of hiring global talent.

If your drugs or technology are genuinely bleeding edge and your proposition is world-class then you have a fighting chance of winning the custom and investment you will need to convert potential to the bottom line. 

As we have seen with a recent spurt of acquisitions and investments, the very best Cambridge science and technology still commands respect internationally. So we might be best advised to revive the words of the late and indomitable business troubleshooter Sir John Harvey-Jones who counselled that in times of trouble and turbulence you polish your shoes, put on your smartest attire and smile, smile, smile. 

In a country that is now a laughing stock in so many regards no-one will suspect your smile masks idiocy – and you never know, some might even interpret your countenance as a bona fide reflection of confidence.

I am sure that most of us can remember our parents telling us to share our toys or sweets with another child, writes Andrew Priest, a partner in the Corporate and Commercial team at law firm Birketts LLP. It was not an easy lesson to learn, especially if young Johnny did not reciprocate the offer. 

However, later in life we learn that sharing is good because it helps to build and strengthen relationships and it demonstrates friendship and kindness. So are technology companies able to learn a similar lesson and recognise that sharing can be a good thing? 

The idea of sharing anything is not an easy concept for many companies. They are told by their consultants and advisers to look for sustainable competitive advantages for their products and services, to protect their intellectual property and to restrict their senior executives from departing with any trade secrets. Whilst all of this advice makes good business sense, it does little to encourage a culture of sharing. 

So why should technology companies consider sharing anything, whether that is information, data, IP or resources? When I was at business school I remember reading Michael Porter’s book ‘The Competitive Advantage of Nations’ and learning about how a business or industry cluster helps to increase the productivity of companies in the cluster, encourages technology innovation and investment and provides a suitable environment for new entry businesses. 

Porter’s ideas are still applicable today and companies in many clusters, particularly technology clusters, have benefited from the competitive advantages that flow from being an active member of the cluster.
Technology companies often rely on IP, and in particular patents, to protect their products and to act as a barrier for new companies wishing to work in the same field or area of business.

Within a cluster environment, the sharing of IP between like-minded companies can help to reduce R & D costs and, through collaboration arrangements, build bridges towards higher levels of innovation and product development.

The idea is that the value of the whole IP becomes greater than the sum of the parts, enabling those companies in the cluster to ‘punch above their weight’ and compete in new markets and across additional countries.

The sharing of IP is often achieved through technology transfer agreements. These involve the IP owner or developer licensing its patents, know-how or trade secrets for exploitation by others in return for royalties and other payments. 

Universities use these agreements to generate income and grant rights for the commercial exploitation of the IP. It is not a coincidence that many technology clusters include universities and other research institutions at their core – where, for example, would the science and technology companies in and around Cambridge be without the university, or Silicon Valley in the US without Stanford University? 

Technology transfer agreements that involve the licensing of IP between parties in different European countries can give rise to competition law concerns especially where they seek to impose certain restrictions on competitive behaviour or they involve the cross-licensing of IP. 

The regulatory authorities tend to look favourably on the licensing of IP because it helps to disseminate technical knowledge and promote the manufacture of technically more sophisticated products, but any proposed agreement should be looked at carefully to ensure that its terms do not breach established anti-trust laws.

The sharing of IP can also involve jointly owned IP. This is where both parties (or there could be more) wish to retain ownership and control of the same IP rights.

That can often be the case when the IP is developed jointly by more than one party. There is nothing wrong with having IP that is jointly owned, but the relevant agreement will need to be very clear about what each of the joint owners can and cannot do with the IP and the extent to which the consent of the other party (or notice to the other party) is required.

For technology companies, having access to innovative ideas is a key component for product development and sustaining competitive advantage. Industry clusters offer opportunities to achieve those goals through the sharing of knowledge and expertise, the transfer of technology and collaboration on joint projects. 

The financial and economic benefits of doing this seem to be clear, but companies do need to remember that there should always be controls and limitations in place, and that is where well-drafted legal agreements also have an important role to play.

It’s good to share; we just need to do it more often. Even young Johnny can learn that lesson.

• You can call Andrew Priest on 07557 161 211 or  email andrew-priest [at] birketts.co.uk

Cambridge UK life science business F-star Therapeutics is merging with US-listed Spring Bank Pharmaceuticals in Massachusetts.

On completion of the deal F-star’s CEO, Eliot Forster, will become president and CEO of the combined company which will trade as F-star Therapeutics and is expected to trade on NASDAQ – the US technology market – as FSTX. 
  
F-star – currently a private UK immuno-oncology biotech – has been pondering a US IPO for some time and the Transatlantic tie-up provides the ideal opportunity.

F-star anticipates raising additional capital at the closing of the proposed combination from current and potential new investors and the combined company expects to have at least $40 million in cash prior to closing as it bids to advance a potent pipeline of multiple clinical-stage immuno-oncology programs.

The transaction has been approved by both boards as well as F-star’s equity holders, who have signed the share exchange agreement. The combined company will be headquartered out of F-star’s existing facilities in Cambridge UK and Cambridge MA following closing, which is expected in late 2020.

Spring Bank Pharmaceuticals is a clinical-stage biopharmaceutical company developing novel therapeutics for oncology and inflammatory diseases. The deal means Spring Bank, subject to stockholder approval, acquiring all the outstanding share capital of F-star in exchange for newly issued shares of Spring Bank in an all-stock transaction. 

Eliot Forster said: “We are truly excited about the opportunity created by this proposed combination to further advance our pipeline of novel tetravalent bispecific antibodies, which we believe will be able to address the limitations of current therapies in the field of immuno-oncology. 

“At F-star, we are pioneering a differentiated approach to bispecifics, using a natural human IgG1 antibody format that has already shown early signs of clinical activity, established manufacturing processes and promising safety.

“Currently, only a minority of patients realise long-lasting benefit from immunotherapy, so there remains a significant unmet medical need to develop more effective cancer treatment options. 

“We believe this transaction will provide the resources to accelerate F-star’s clinical development and generate stockholder value through a pipeline of novel therapies with the potential to improve the lives of patients with difficult to treat cancers.”

Cambridge UK life science representation on NASDAQ is growing. GW Pharmaceuticals and Bicycle Therapeutics are already doing well on the market. Abcam is exploring a US IPO, Horizon Discovery is heading for a joint  UK-US listing and Kymab wants to join them. 

Cambridge-based gene editing world leader Horizon Discovery has decided to resuscitate plans for an initial US public offering of American depositary shares.

The company believes the time is ripe after a spell of uncertainty caused by the COVID-19 pandemic.

Having put the move on hold to see how markets responded following the coronavirus outbreak, Horizon issued a brief statement this week saying it was now full steam ahead.

As we reported when the proposed move was initially announced in early February, Horizon wants to issue an indeterminate number of shares in the US to raise millions of dollars of extra working capital. 

More than 50 per cent of shares in the business are already in the hands of US stockholders.

While such a move would not constitute an IPO as such it would effectively provide the company with a dual UK and US listing and transition shareholder liquidity to the other side of the Atlantic. 

It has been a good week for the business. TrueBinding, Inc., a California-based biopharma company, has signed a set of commercial licences for Horizon’s cGMP-compliant CHOSOURCE™ platform. 

TrueBinding will use the platform to develop and commercialise multiple biotherapeutic products for applications in immuno-oncology and other disease areas with great unmet medical need. No figures have been released for the deal.

To date, CHOSOURCE has been licensed to 80 organisations globally with at least seven confirmed biotherapeutics expressed in these cells having progressed to investigational new drug filings.

And in a half-year trading update, Horizon tells shareholders it remains in rude health. It says that business remains robust with sustained recovery to 2019 levels as demand for its products and services remains high and the group is confident of a return to growth in the second half of this year. The company plans to report its half-year results on August 17.

It expects to report half-year 2020 revenues of around £22.4 million (HY 2019: £26.1m, c. -13.9 per cent) – approximately £22m (c. -15.5 per cent) on a constant currency basis. 

The change was largely due to the rapid reduction of academic research work caused by the COVID-19 pandemic impacting the group’s Research Reagents business unit and was broadly in line with board expectations. 

The greatest impact was seen in the second quarter of 2020, most notably in April. This was then followed by a period of sustained recovery, which resulted in large parts of the business regaining momentum and returning towards 2019 levels of revenue by the end of June.

Horizon’s cash position was bolstered by a successful placing in April which raised £6.9m and was further strengthened by the implementation of enhanced cash control measures also implemented in April. 

Taking this into account, the group had cash and equivalents of £23.6m at June 30 (HY 2019: £24.8m; FY 2019: £18.8m).

CEO Terry Pizzie said: “Thanks to the fantastic efforts of our staff we have continued to operate effectively throughout the crisis and have built stronger and deeper relationships with our biopharma customers based on our ability to add value in difficult conditions. 

“Our customers have increasingly adopted outsourcing as a solution to their own business challenges and we have become recognised as an invaluable long-term partner.

“We expect the trend for increased outsourcing to continue, for these relationships to endure and facilitate high level access within our biopharma customer base that will help lay the foundations for commercialising our new high growth areas.

“We are encouraged by our H2 2020 prospects and look forward to the remainder of the year with optimism and confidence about the group’s strategy and prospects.”

VividQ, a deep tech software startup based in Cambridge, has received a Smart Grant of £334K from Innovate UK to fund groundbreaking industrial R & D for a world first holographic headset prototype.

The prototype will showcase VividQ’s latest cutting-edge software for high quality Computer-Generated Holography (CGH), providing an enhanced visual experience for augmented reality devices with the best-in-class optics and tracking provided by the company’s partners.

The eventual goal is to provide a visual experience that feels natural, realistic and immersive to viewers. The device will be available to original equipment manufacturers and original design manufacturers as a reference in their pursuit to integrate holographic display in next generation consumer electronics.

In the past, the tremendous computing requirements to create full-depth holographic displays have made this technology unsuitable for commercial applications. VividQ’s industrial research will aim to address some of the key barriers to adoption of holography and other immersive technologies. 

The key innovations integrated as part of the project will include:-

• The latest developments in optical systems (in particular secondary optics) for holographic projection to improve the image quality in the headset considerably
• VividQ’s newest software release to provide a high-resolution 3D holographic experience with full depth of field.

VividQ’s grant proposal received excellent feedback from Innovate UK reviewers with high recognition for holography as an exciting technology with global opportunity in high-growth sectors, backed by a team possessing the requisite skills and expertise.

Darran Milne, co-founder and CEO at VividQ said: “With a viable platform to demonstrate the capabilities of holography in consumer electronics products, VividQ will get one step closer to securing our position at the forefront of the next display revolution.

“The project will accelerate the market adoption of VividQ’s holographic software, enabling our customers to develop and deploy game-changing AR devices.”

VividQ has already raised over $7 million in venture funding with backing from leading international investors including Sure Valley Ventures, OSRAM FluxUnit Ventures, University of Tokyo Edge Capital and Essex Innovation.

With world-leading expertise in 3D holography, VividQ was founded in 2017 by a team of expert engineers, mathematicians and computer scientists from the Universities of Cambridge, Oxford and St Andrews, who solved key technology barriers in the adoption of holographic display. 

VividQ’s software brings real-time Computer Generated Holography to applications from automotive head-up displays, to Augmented Reality smart glasses and desktops.
 
The business has ensured that it collaborates with leading technology companies to “create the most realistic, immersive and sensational experiences.”

• PHOTOGRAPH: The VividQ management team, from left: Dr Andrzej Kaczorowski (CTO), Darran Milne (CEO) and COO Aleksandra Pędraszewska