Turning world class research into business 0 Slide CARDIFF/CAERDYDD Turning world class research into business CARDIFF/CAERDYDD

Turning world class research into business 1

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CARDIFF/CAERDYDD

Turning world class research into

business

CARDIFF/CAERDYDD


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CARDIFF/CAERDYDDBackground

• Fusion Cardiff is a wholly owned subsidiary of Biofusion plc

• Biofusion was formed in 2002 to commercialise university IP

» Formation and exit of spin-out companies

» Licensing

• We’re a small team from a variety of backgrounds who have all turned

technology into business

• We sign long term exclusive pipeline agreements with top ten UK

universities

• We are listed on the London Stock Exchange on AIM

• Currently have 23 companies in our portfolio


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CARDIFF/CAERDYDD

Biofusion model – working in partnership

PORTFOLIO COMPANY

Long-term pipeline agreements with

universities. Directly align

University interest with equity position in Biofusion

Existing tech transfer offices use their

relationships with academics to mine for and protect IP with commercial

potential

Biofusion makes investment in the Portfolio Company

and aligns academic with an equity

participation in the Portfolio Company

Biofusion selects best IP with commercial

potential and transfers it to a new Portfolio Company,

initially 100% owned by Biofusion

UNIVERSITY

TECH TRANSFER

IP CREATION

COMMERCIALISATION


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CARDIFF/CAERDYDDWhat’s in this for all parties?


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CARDIFF/CAERDYDD

• In 2005 signed exclusive agreement with University of Sheffield» Leading UK research intensive university and member of Russell Group

» Ranked 6th in last RAE rankings

» Current annual research spend of £93m

» 10 year pipeline agreement for all medical life science IP

» University of Sheffield own 24% of Biofusion

• In 2007 signed exclusive agreement with Cardiff University

» Leading UK research intensive university and member of Russell Group

» Ranked 7th in last RAE rankings

» Current annual research spend of £82m

» 10 year pipeline agreement for all university IP

» Cardiff University own 30% of Biofusion

Our university agreements


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CARDIFF/CAERDYDDOur investment partners

• NPI Ventures» Formerly part of Nikko, recently acquired by Citigroup

» First look option to invest in Biofusion portfolio

» Acquired £2m stake in Biofusion as part of investment agreement

» Exclusive £10m+ side fund to invest in Biofusion portfolio

• Finance Wales

» Welsh regional investment body

» MOU offering the option to co-invest in Cardiff based portfolio companies

» Access to £130m fund


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CARDIFF/CAERDYDD

plc

Sheffield

University of Sheffield

24%Institutions

Ring fenced £8m

fund

Cardiff University

30%

Cardiff

Ring fenced £8m

fund

Structure


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CARDIFF/CAERDYDD

How does this work in practise?


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CARDIFF/CAERDYDD

From IP creation to company formation

Inventor contacts

RACD

Initial meeting

with RACD

RACD conduct initial screen

RACD Kill?

N

YRACD

present disclosures to Biofusion

Close out record and

inform inventor

Spin out?

N

Y

License or kill project

Fusion Cardiff and RACD meet

Inventor

Spin-

out?

Trigger patenting process

Fusion Cardiff and

RACD discuss spin-out

with Inventor

Due diligence kick-off meeting

Conduct due

diligence and draft

investment case

Review and sign-off

Present to Fusion Cardiff

Investment Committee

Hold and review

options (PoC,

SMART)

N

Y

?

Set up NewCo

University

Joint Fusion Cardiff

PIPELINE DISCLOSURESPIN-OUT, LICENSE OR

KILL?COMPANY CREATION


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CARDIFF/CAERDYDD

New Co Limited

Academic is given

significant shareholding

in New Co

The New Co at start-up

University transfers

IP into New Co

Fusion Cardiff set up New Co1

2

3Fusion Cardiff work

with academic to

build commercial

business plan and

milestones

4


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CARDIFF/CAERDYDDFunding the New Co to exit

Start-Up Investment Exit strategy

Assign research contracts or recruit RAs

Provide management expertise & contacts

Provide initial funding

Recruit management

Develop business

Raise third party funding

Reduce involvement

IPO or trade sale

Up to £200k Up to £500k

Investment Partners

Cardiff Fund

5 6 7

Third Party Investors

Later stage Investment

Investment as required

Investment as required

Fusion Cardiff New Co


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CARDIFF/CAERDYDD

• In terms of IP ownership nothing has changed

» Cardiff University still owns its IP

» Fusion Cardiff has the right to set a company up from that IP

» But we would only do that if all parties agree and are happy

» We recognise that not all research has commercial applications and we don’t force people to work with us

» We stand in place of the University so we only own whatever the University would own

• Research grants and industrial collaboration remains the same

» Again we only have the right to whatever the University ‘s share of IP would be

» It doesn’t stop funded research from industry partners and we would never seek to stop this

• It will not stop departments working

» RACD receive 50-100 disclosures pa across the whole University

» We will only do 4 – 10 start-ups pa

Intellectual property


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CARDIFF/CAERDYDD

How are we doing?


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CARDIFF/CAERDYDDKey events in the year

• Completed the agreement with Cardiff University in Jan 2007

» Integrated with RACD team

» Presenting to all key departments

» Full review of pipeline

» Four potential spin-outs

• Signed MOU with Finance Wales

• Sale of Cardiff Biologicals and Cardiff ProTides to Morvus

» Acquired Fusion Cardiff’s shareholding for 20% of Morvus

» Fusion Cardiff holds13,698,630 Morvus shares

» At last funding round in July 2007, Morvus was valued at £11.6m (30p

per share)


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CARDIFF/CAERDYDDOur growing portfolio


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Potential ‘blockbusters’ and advanced stage exits

Developed a range of man-made

hormones that mimic the actions of

natural hormones . It has a multi

million research programme with

Ipsen on GH and is expanding its

pipeline to include 4 new target

hormones including EPO and Leptin

Enables pharmaceutical companies

to predict how the human body

interacts with the drugs under

development “before” running

clinical testing programmes

Turnover up to £2.0m and net profit

up to £500k

Developed a ‘once a day’ drug that

mimics the circadian rhythm and

releases replacement hormones in

exactly the same way the natural

cycle would . First product entering

Phase III and three new products in

development pipeline

New start up in 2007

developing vaccines and

therapeutic antibodies to treat

infections caused by MRSA

New start up in 2007 developing a

metabolically engineered microbial

production method that is capable

of producing hydrogen from sugar

solution media through

fermentation

Developing a CCD camera

microscope that is not only cheaper

but has a better performance than

existing microscopes.

New start up in 2007 developing

new ‘monoclonal antibody’ drugs

that stop cancerous tumours

growing and have less side effects

than currently available therapies

Developed a range of novel drugs

and technologies, primarily in the

field of oncology. It has 3 products

in pre-clinical studies of which the

first is expected to enter Phase I

clinical trials in 2008


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CARDIFF/CAERDYDDSummary

• Progressing well

• Excellent relationship with RACD and University

• Need to do more to reach out to non-life science and to

continue to communicate with all academics

• Focus on creating spin-outs over next six months

• Delighted to be in partnership with Cardiff


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CARDIFF/CAERDYDD

Turning world class research into

business

CARDIFF/CAERDYDD

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Turning world class research into business 0 Slide CARDIFF/CAERDYDD Turning world class research into business CARDIFF/CAERDYDD