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Wellcome Trust launches £200m healthcare venture capital fund

The Wellcome Trust’s subsidiary investment company, Syncona Partners launched on 3 January with starting capital of £200 million.

Syncona says it will invest in healthcare devices, diagnostics, therapeutics, information technology, and services—supporting the trust’s aims to improve human and animal health by funding “the brightest minds”. At the time of going to press Cambridge Epigenetix, an epigenetics sequencing startup, was the only company listed on Syncona’s website as being part of its funding portfolio.

Plans for the firm, initially named Project Sigma, were originally announced in March 2012.

Syncona says it will support both early and late-stage companies, either as a part of a syndicate of funders or as a majority investor. Most investments are expected to be between £1m and £20m, the company says.

The company’s chairman is Nigel Keen, a chartered accountant and also fellow of the Institution of Engineering and Technology. He is already chairman of a number of technology companies, including Oxford Instruments, Laird, and Deltex Medical. He is also a non-executive director of the University of Oxford’s technology transfer subsidiary, Isis Innovation.

Syncona’s chief executive, Martin Murphy, was previously a partner in the biopharmaceutical and healthcare venture capital firm MVM Life Science Partners.

David Phillips, emeritus professor at Imperial College London and former president of the Royal Society of Chemistry, told Research Fortnight that such an investment fund could be important for supporting smaller companies in particular.

“The hurdle that everybody knocks up against eventually in the healthcare business is having to go through clinical trials, which for a small company are impossibly expensive,” he says.

Commenting on his own experience with Imperial College spin-out company, PhotoBiotics, Phillips says, “We’ve got to the stage where we’ve done all the work we need but now we have to get into clinical trials. We need between £5m and £6m for that, and it’s hard to raise that sort of money right now.”

Phillips urges Syncona to think about investing for the long-term: “The problem with venture capital right now is that they want a quick return on their investment in three to five years, and you quite often can’t do that. It has to be more like five to ten years.”

He also recommends the venture company take a higher-risk approach than other firms, suggesting they “take a punt”.

“At the present time, investors on the whole are too cautious. Not everything will work out, but they should go for some very innovative and more risky investments,” he says.

Douglas Robertson, chair of PraxisUnico, an organisation that supports the commercialisation of research, told Research Fortnight that he welcomes the establishment of Syncona: “Investment in sustainable healthcare businesses is critical if the UK is to capitalise on its research strength.” He says it is important that Syncona looks at a diverse range of healthcare products.