Spinning Success? The Benefits of University Spinouts

University spinouts enable the commercialization of innovative research from academic institutions, providing early-stage project visibility for Big Pharma companies and investors, creation of intellectual property, and technology transfer services. The benefits of university spinouts, such as BioNTech for example, have been irrefutably proven over the course of the COVID-19 pandemic.

Intellectual property services and R&D tax credit specialists, GovGrant, performed analysis of data for companies founded in the past 20 years. Their analysis revealed that, in the United Kingdom, university spinouts in the fields of pharmaceuticals and biotechnology managed to raise the most capital (1). In fact, half of all the capital raised, which is worth £5.9 billion, went to pharmaceutical and biotech spinout companies.

Additionally, based on its analysis, GovGrant found that seven of the top 10 most successful university spinouts from the past decade are housed within the pharmaceutical and biotechnology industries. The top‑ranking spinout, Exscientia from the University of Dundee, is valued at £784.5 million (1).

However, despite the publicised success stories, there are still hurdles for European university spinouts to overcome. A potentially success-limiting issue for university spinouts is the continuing lack of sufficient late-stage funding (2). Even with growth in late-stage funds since 2010 and higher returns on investment in Europe, the region still lags behind the United States and China in the biotech sector (3). Then there is the challenge with equity shares and revenue royalties that have been specified as ‘too high’ in Europe, which is not necessarily the case for US academic entrepreneurs (4).

So, how might Europe as a whole begin to take advantage of the innovation borne from academic institutions in the longer term? Domestic funding, particularly during the late stages would be a good start (5).

References

1. GovGrant, The University Spinout Report 2021, Research Report (November 2021).
2. C. Lang, “Biotech Investments in Germany ‘Could Prove to be a Treasure Trove’,” Pinsent Masons, Analysis Article, 5 May 2021.
3. McKinsey & Company, “Infographic: Capital Landscape for European Biotechs is Maturing, but it Continues to Trail the United States,” Article, 12 Aug. 2021.
4. N. Benaich, “Universities in the UK and Europe Have a Start-Up Problem,” Financial Times, Article, 10 May 2021.
5. M. Palmer, “Should the New UK £375m ‘Breakthrough’ Fund Back Startups or Scaleups?” Sifted, 23 July 2021.

About the Author

Felicity Thomas is the European editor for Pharmaceutical Technology Group.

Article Details

Pharmaceutical Technology Europe
Vol. 33, No. 12
December 2021
Page: 6

Citation

When referring to this article, please cite it as F. Thomas, “Spinning Success?” Pharmaceutical Technology Europe 33 (12) 2021.