The voracious US appetite for Cambridge UK AI technology has been evidenced yet again with a $250 million swoop by Microsoft for SwiftKey, which was founded by two Cambridge graduates.

While SwiftKey is now anchored in London it retains a number of Cambridge-based investors who recognised the strength of the iP when Jon Reynolds and Ben Medlock founded the business.

This is the third startup based on Cambridge-born IP swallowed by American giants in recent times following Google’s $577m (£400m) acquisition of DeepMind Technologies and Apple’s swoop for VocalIQ in a deal worth up to $100m.

American corporations have now paid around $1 billion for three Cambridge-born startups. Business Weekly gave SwiftKey its first draught of the oxygen of publicity when it was known as TouchType; founded in 2008.

It has grown exponentially since and had over £8m in sales in 2004. Some media sources are viewing this latest deal as another battle in an ongoing war among US – notably Silicon Valley – tech titans to raid Cambridge for the next big thing in Artificial Intelligence.

Microsoft’s coup represents a missed opportunity for Google; as we reported in 2012, SwiftKey was named top mobile app at the Mobile World Congress in Barcelona and trumped Google Wallet for the accolade.

It had become the most downloaded Android app in the world after being chosen by Google as one of the few applications to celebrate its 10 billionth app download. 
The company makes a predictive keyboard powered by artificial intelligence that is installed on hundreds of millions of smartphones.

The FT is reporting that the co-founders will each scoop around $30m from the Microsoft acquisition, but it is also another fantastic exit for Cambridge investors who kept the faith in the early days of the business.

Before the Microsoft deal SwiftKey had raised around $20m in VC cash, including from Accel Partners, Index Ventures and Octopus Investments. Microsoft will now accelerate development of SwiftKey’s technology for Android and iOS; it has a proprietorial Word Flow keyboard for Windows Phone that it’s also bringing to iOS soon. It will integrate SwiftKey into its current tech offering, according to Microsoft confidants.

The FT quotes Microsoft’s Harry Shum as saying: “We love SwiftKey’s technology and we love the team that Jon and Ben have formed. We believe that together we can achieve orders of magnitude greater scale than either of us could have achieved independently.”

On the SwiftKey website, the founders add: “We’re excited to announce an important milestone on SwiftKey’s journey. As of today, we have agreed to join the Microsoft family.

“Microsoft’s mission is to empower every person and every organisation on the planet to achieve more. Our mission is to enhance interaction between people and technology. We think these are a perfect match, and we believe joining Microsoft is the right next stage in our journey.

“Eight years ago we started out as two friends with a shared belief that there had to be a better way of typing on smartphones. We’ve come a long way since then; today hundreds of millions of people around the world, and many of the leading mobile manufacturers, rely on our language prediction technology.

“Our users have saved an estimated 10 trillion keystrokes across 100 different languages, which adds up to over 100,000 years of reclaimed typing time.

“Our number one focus has always been to build the best possible products for our users. This will not change. Our apps will continue to be available on Android and iOS, for free. We are as committed as ever to improving them in new and innovative ways.

“We owe a lot to the invaluable input of our users, including our 130,000-strong VIP community and the many thousands of others who have been with us since the start. Their energy, honest feedback and eagerness to share our products have been the driving force behind our growth.

“At times like this people tend to focus on founders. However, the heart of our company is the awesome team who chose to share this journey with us. We want to take this opportunity to thank them for their dedication and hard work. We never would have come this far without you.”
 

Cambridge UK medical technology business MISSION Therapeutics has raised $86.37 million (£60m) in fresh money – taking its funding haul to date past the $125m mark.

Woodford Patient Capital Trust Plc has, for the second time in a week, become a new investor in a Cambridge biotech company, having also backed Inivata.

MISSION, another success for Professor Steve Jackson’s Cambridge team, is Business Weekly’s reigning Life Science Innovation champion and focuses on selectively targeting deubiquitylating enzymes to treat cancer, neurodegenerative and other diseases.

The financing was jointly led by Imperial Innovations Businesses and Woodford with follow-on investment from existing shareholders Sofinnova Partners, SR One, Roche Venture Fund and Pfizer Venture Investments.

The cash will enable MISSION to maximise the potential of its world leading DUB platform and advance a series of first-in-class small molecule drugs candidates targeting specific DUBs into clinical development.

Anker Lundemose, CEO at MISSION said: “MISSION Therapeutics has attracted one of the highest profile investor syndicates in Europe. We welcome WPCT and thank our existing investors for their continued support.

“This is strong endorsement of our unique discovery platform and will enable us to maximise the potential of multiple lead compounds for diverse therapeutic indications.

2016 will see us progress our advanced programs into regulatory preclinical development and deepen our pipeline, from a position of increased financial strength.”

DUBs are involved in multiple cellular processes, including DNA damage and cell proliferation. The inhibition of these enzymes has considerable potential for the generation of novel drugs for treating cancer and other unmet medical needs, including neurodegenerative disease, muscle wasting and infectious disease.

Despite significant efforts within the pharmaceutical sector, there is a lack of DUB inhibitors in clinical development.

MISSION Therapeutics was founded in 2011 to commercialise expert research into the ubiquitin pathway for the treatment of cancers and non-malignant disease.

The company has strong links with key academic and research centres including Cancer Research UK laboratories and the Gurdon Institute, University of Cambridge.

Steve Jackson (pictured above) at Cancer Research UK laboratories and the Gurdon Institute, University of Cambridge is the scientific founder of MISSION and the chief scientific officer.

MISSION has previously received £27 million in venture capital from a blue chip syndicate comprising institutional (Sofinnova Partners, Imperial Innovations) and corporate (SR One, Roche Venture Fund and Pfizer) investors. The company is based at the Babraham Research Campus.
 

The Cambridge UK science, technology and business hotspot will see dealflow shoot past $90 billion for the last 34 months as transactions ramp up in February, according to Business Weekly’s Cambridge Deals Digest.

The landmark was set up by a healthy January transaction count of more than $1.69bn – that doesn’t include  a flurry of New Year deals for which values were not disclosed. January’s haul took the Cambridge Deals Digest total to $88.7bn for the last 34 months – a monthly average of $2.61bn.

Transactions in the first month of 2016 were well up on December as business got back up to the table following weeks of cold turkey. Feedback from local dealmakers and investors suggests that the cluster is set for a Valentine’s week love in during February.

Life sciences and property & construction were the major drivers of fundraisings and contract wins in January; added to the physical transaction total was the promise from a number of significant businesses locally that they had built substantial war chests for 2016 acquisitions.

The AIM-quoted Marshall Motor Holdings, for example, has earmarked a potential $142 million for further acquisitions. The local biotech scene did not so much ring in the New Year as greet it with a resounding carillon. The growing kudos of the Cambridge life science cluster was handsomely demonstrated by the decision of Woodford Patient Capital Trust to back a $45 million.

Series A round for Inivata whose technology is based on trailblazing research from the Rosenfeld Lab at Cancer Research UK Cambridge Institute (CRUK-CI). Existing investors Imperial Innovations, Cambridge Innovation Capital and Johnson & Johnson Innovation all participated in the round along with newcomer Woodford.

Inivata is a clinical cancer genomics company employing the precision of circulating tumour DNA (ctDNA) analysis to improve personalised healthcare in oncology. The new funds will be used to accelerate clinical studies to validate Inivata’s technology platform based on enhanced TAm-Seq, and commercialise the company’s first products.

Inivata’s platform will initially be applied across a spectrum of solid tumours – including lung, breast and colon cancer – to demonstrate the integration of genomic information with clinically actionable decision-making, defining a personalised approach to cancer care.

Inivata CEO Michael Stocum (pictured above) said: “Since our seed funding 16 months ago, the market has seen an explosion of interest and funding in liquid biopsy research. “With our early presence in Cambridge UK and our imminent presence in the US, we are well-placed to be forerunners in the practical application of liquid biopsy for clinical oncologists.”

More good news swiftly followed as a new funding model designed to translate more university research into novel medicines at a faster rate and with greater commercial potential was launched by a global academia-Big Pharma consortium believed to be the first of its kind.

World-leading UK universities, including Cambridge, and global pharmaceutical companies kicked off the initiative with the $57m Apollo Therapeutics Fund. Cambridge medical technology pioneer AstraZeneca, GlaxoSmithKline, Johnson & Johnson Innovation and the technology transfer offices of Imperial College London, UCL (University College London) and the University of Cambridge, created the joint venture which is targeting a broad range of diseases.

Each of the three industry partner companies will contribute £10m to the venture over six years. The technology transfer offices of the three university partners – Imperial Innovations, Cambridge Enterprise and UCL Business PLC – will each contribute a further £3.3 million. The aim of Apollo is to advance academic preclinical research from these universities to a stage at which it can either be taken forward by one of the industry partners following an internal bidding process or be out-licensed. The three industry partners will also provide R & D expertise and additional resources to assist with the commercial evaluation and development of projects.

The standout deal in the industry sector was the news that Marshall Aerospace and Defence Group would share a $526m MoD contract to upgrade the RAF C-130 Hercules transport aircraft.
2016 marks the 50th anniversary of Marshall’s first engagement with the C-130. Its ‘neighbours of Hercules’ are Lockheed Martin and Rolls-Royce, who jointly deliver the Hercules Integrated Operational Support (HIOS) programme. Most of the work under the new deal will be undertaken by Marshall ADG at its Cambridge site.

The MoD is also raising around $713m through the sale of RAF Mildenhall and other local and UK air base sites. In local property deals, Kier and Wates racked up significant contracts worth more than $150m, Wates with a blockbusting $107m windfall for a key phase of the university’s North West Cambridge site.
 

San Francisco software business, Docker Inc, has snapped up a Cambridge University Computer Laboratory spin-out for an undisclosed sum.

Technology from Unikernel Systems is designed to improve the security, speed and scale of data processing in age of the Internet of Things. Unikernel Systems was formed by staff and postdoctoral researchers at the Computer Lab.

Professor Andy Hopper (above), head of the laboratory, said: “This acquisition shows that the Computer Laboratory continues to produce innovations that find their way into mainstream developments. It also shows the power of open source development to have impact and to be commercially successful.”

The Computer Lab’s hall of fame spin-outs also include Bromium, Ubisense and RealVNC.

From Media Dynamics in 1968 to Acorn Computer Ltd in 1979 around 200 companies have been founded by Computer Laboratory staff and graduates.
A host of other global worthies such as Virata, ANT, nCipher, Zeus, Amino, Bango, Cambridge Broadband, Datanomic, Jagex, Linguamatics, CacheLogic, DisplayLink, blinkx, Camrivox and XenSource are all in the Computer Lab’s hall of fame.

To the latest success, Unikernels are small, potentially transient computer modules specialised to undertake a single task at the point in time when it is needed.

Because of their reduced size, they are far more secure than traditional operating systems, and can be started up and shut down quickly and cheaply, providing flexibility and further security. They are likely to become increasingly used in applications where security and efficiency are vital, such as systems storing personal data and applications for the so-called Internet of Things (IoT) – internet-connected appliances and consumer products.

Dr Richard Mortier of the Computer Laboratory, one of the company’s advisers, says: “Unikernels provide the means to run the same application code on radically different environments from the public cloud to IoT devices. This allows decisions about where to run things to be revisited in the light of experience – providing greater flexibility and resilience. It also means software on those IoT devices is going to be a lot more reliable.”

Recent years have seen a huge increase in the amount of data that is collected, stored and processed, a trend that will only continue as increasing numbers of devices are connected to the internet.

Most commercial data storage and processing now takes place within huge datacentres run by specialist providers, rather than on individual machines and company servers; the individual elements of this system are obscured to end users within the ‘cloud’. One of the technologies that has been instrumental in making this happen is virtual machines.

Normally, a virtual machine (VM) runs just like a real computer, with its own virtual operating system – just as your desktop computer might run Windows.

However, a single real machine can run many VMs concurrently. VMs are general purpose, able to handle a wide range of jobs from different types of user, and capable of being moved across real machines within datacentres in response to overall user demand. 

The University’s Computer Laboratory started research on virtualisation in 1999, and the Xen virtual machine monitor that resulted now provides the basis for much of the present-day cloud.

Although VMs have driven the development of the cloud (and greatly reduced energy consumption), their inherent flexibility can come at a cost if their virtual operating systems are the generic Linux or Windows systems. These operating systems are large and complex, they have significant memory footprints, and they take time to start up each time they are required.
 
Security is also an issue, because of their relatively large ‘attack surface’.

Given that many VMs are actually used to undertake a single function, (e.g. acting as a company database), recent research has shifted to minimising complexity and improving security by taking advantage of the narrow functionality. And this is where unikernels come in.

Researchers at the Computer Laboratory started restructuring VMs into flexible modular components in 2009, as part of the RCUK-funded MirageOS project. These specialised modules – or unikernels – are in effect the opposite of generic VMs. Each one is designed to undertake a single task; they are small, simple and quick, using just enough code to enable the relevant application or process to run (about 4% of a traditional operating system according to one estimate).

The small size of unikernels also lends considerable security advantages, as they present a much smaller ‘surface’ to malicious attack, and also enable companies to separate out different data processing tasks in order to limit the effects of any security breach that does occur.

Given that resource use within the cloud is metered and charged, they also provide considerable cost savings to end users.

By the end of last year, the unikernel technology arising from MirageOS was sufficiently advanced that the team, led by Dr. Anil Madhavapeddy, decided to found a startup company.

A new funding model designed to translate more university research into novel medicines at a faster rate and with greater commercial potential has been launched by a global academia-Big Pharma consortium believed to be the first of its kind.

World-leading UK universities, including Cambridge, and global pharmaceutical companies have kicked off the initiative with the £40m Apollo Therapeutics Fund.

Cambridge medical technology pioneer AstraZeneca, GlaxoSmithKline, Johnson & Johnson Innovation and the technology transfer offices of Imperial College London, UCL (University College London) and the University of Cambridge, have created the joint venture, which is targeting a broad range of diseases.

Each of the three industry partner companies (AstraZeneca UK Limited, Glaxo Group Limited and Johnson & Johnson Innovation-JJDC, Inc.) will contribute £10 million to the venture over six years.

The technology transfer offices (TTOs) of the three university partners – Imperial Innovations Group plc, Cambridge Enterprise Limited and UCL Business PLC – will each contribute a further £3.3 million.

The aim of Apollo is to advance academic preclinical research from these universities to a stage at which it can either be taken forward by one of the industry partners following an internal bidding process or be out-licensed. The three industry partners will also provide R & D expertise and additional resources to assist with the commercial evaluation and development of projects.

Drug development is extremely complex, costly and lengthy; currently only around 10 per cent of therapies entering clinical trials reach patients as medicines.

By combining funding for promising early-stage therapeutics from leading UK universities with a breadth of industry expertise, Apollo aims to share the risk and accelerate the development of important new treatments, while also reducing the cost.

Dr Ian Tomlinson, former senior VP, Worldwide Business Development and Biopharmaceuticals R & D for GSK and founder & chief scientific officer of Domantis Limited has been appointed chairman of the Apollo Therapeutics Investment Committee (AIC). Comprising representatives from the six partners, the AIC will make all investment decisions.

The AIC will be advised by an independent drug discovery team (DDT) of ex-industry scientists who will be employed by Apollo to work with the universities and their TTOs to identify and shape projects to bring forward for development.

All therapy areas and modalities, including small molecules, peptides, proteins, antibodies, cell and gene therapies will be considered. Apollo will be based at Stevenage Bioscience Catalyst. Once funded, projects will be progressed by the DDT alongside the university investigators, with other external resources and also in-kind resources from the industry partners as appropriate.

For successful projects, the originating university and TTO will receive a percentage of future commercial revenues or out-licensing fees and the remainder will be divided amongst all the Apollo partners.

Dr Tomlinson said: “This is the first time that three global pharmaceutical companies and the TTOs of three of the world’s top ten universities have come together to form a joint enterprise of this nature, making the Apollo Therapeutics Fund a truly innovative venture.

“Apollo provides an additional source of early stage funding that will allow more therapeutics projects within the three universities to realise their full potential.

“The active participation of the industry partners will also mean that projects will be shaped at a very early stage to optimise their suitability for further development. The Apollo Therapeutics Fund should benefit the UK economy by increasing the potential for academic research to be translated into new medicines for patients the world over.”

Woodford Patient Capital Trust is backing a Cambridge UK startup pioneering liquid biopsies to improve cancer treatment and outcomes.

Globally renowned for backing life science winners, Woodford has waded into a $45 million Series A round for Inivata whose technology is based on trailblazing research from the Rosenfeld Lab at Cancer Research UK Cambridge Institute (CRUK-CI).

Existing investors Imperial Innovations, Cambridge Innovation Capital and Johnson & Johnson Innovation all participated in the round along with newcomer Woodford.

Inivata, a clinical cancer genomics company, is employing the precision of circulating tumour DNA (ctDNA) analysis to improve personalised healthcare in oncology. The new funds will be used to accelerate clinical studies to validate Inivata’s technology platform based on enhanced TAm-Seq, and commercialise the company’s first products.

Inivata’s platform will initially be applied across a spectrum of solid tumours – including lung, breast and colon cancer – to demonstrate the integration of genomic information with clinically actionable decision-making, defining a personalised approach to cancer care.

Inivata CEO Michael Stocum (above) said: “Since our seed funding 16 months ago, the market has seen an explosion of interest and funding in liquid biopsy research. With our early presence in Cambridge UK and our imminent presence in the US, we are well-placed to be forerunners in the practical application of liquid biopsy for clinical oncologists.

“We are grateful to our existing investors for their continued strong support of Inivata and very pleased to welcome Woodford Patient Capital Trust to augment what is already a very strong investor base. Our mission is to partner with oncologists to revolutionise cancer treatments and outcomes for their patients – part of a new landscape of personalised healthcare.”

Inivata’s proprietary technology represents a new generation of non-invasive molecular profiling from a simple blood draw that is poised to impact the major aspects of a patient’s care including diagnosis, prognosis, treatment stratification and response monitoring.

The test, which allows precise analysis of cancer-related mutations present in ctDNA, is designed to provide oncologists with clinically actionable genomic information to guide therapy selection, monitor treatment progress and, importantly, detect new mutations as they emerge.

The genomic analysis of ctDNA has the potential to transform cancer care and resolve many of the limitations inherent in current tissue-based testing protocols that are highly invasive and are not amenable to serial monitoring in routine practice. Inivata demonstrated putative clinical utility of enhanced TAm-Seq through published clinical work presented at multiple cancer conferences last autumn.

Robert Tansley of Cambridge Innovation Capital said: “We have been impressed with the results thus far from Inivata’s initial clinical studies that highlight the sensitivity and accuracy of the company’s ctDNA platform.

“Inivata is already working with a strong network of clinicians in both Europe and the United States and this new funding will allow the company to accelerate its clinical validation and commercialisation efforts.”

The £800m Woodford Patient Capital Trust (WPCT) was launched in April 2015 by Woodford Investment Management which has more than £14 billion of assets under management.