The fledgling industries emerging from our universities

Science and engineering departments are innovation incubators, and regularly launch companies involved in a wide range of exciting new fields. Dr Mike Tubbs explains how to invest in spin-outs.

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Spin-outs are spearheading research into new drugs for autoimmune diseases
(Image credit: poba)

People don't usually think of universities as seedbeds of the start-up scene. Students in dusty libraries would be more like it. And until fairly recently, many academics wanted nothing to do with business. In 1970, a left-leaning Warwick history lecturer published Warwick University Limited, which insisted that links between industry and universities should be discouraged to prevent research being exploited a common view at the time.

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Table 1: IP Group's top six portfolio companies
CompanyDescriptionIPG stakeValue of IPG holding
Life Sciences
Oxford Nanopore Technologies LimitedDNA & genome sequencing19.6%£274.1m
Istesso LimitedReprogramming metabolism to treat autoimmune diseases61.1%£51.1m
PsiOxus Therapeutics limitedViral therapeutics for cancer26.3%£44.5m
Technology
Ceres Power Holdings plcNext generation fuel cell technology25.4%£31.5m
Actual Experience plcOptimising human experience of networked applications22.2%£28.4m
Xeros Technology Group plcPolymer bead cleaning systems10.9%£25.8m
Row 10 - Cell 0 TotalRow 10 - Cell 2 £455.4m
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Table 2: portfolio companies worth £9m or more from four IPCCs
IPCCCompanyDescriptionIPCC's stakeValue of IPCC holding
ArixAutolusT-cell therapies8.6%£20.1m
ArixIterum TherapeuticsAnti-infectives to combat multi-drug resistance6.8% (to rise to 8.2%)£5.7m
MercianDreamsInteractive VR entertainment45.6%£13m
MerciaOxford GeneticsSynthetic biology for biological therapeutics40.6%£9.1m
MerciaScience WarehouseSpending management & procurement software62.6%£9.9m
Frontier IPExscientiaAI-driven drug design & discovery5%£2.2m
Frontier IPNandi ProteinsProtein technology for food manufacturing20.8%£2.1m
Stake sold in March 2018 for £10.6m
Dr Mike Tubbs

Highly qualified (BSc PhD CPhys FInstP MIoD) expert in R&D management, business improvement and investment analysis, Dr Mike Tubbs worked for decades on the 'inside' of corporate giants such as Xerox, Battelle and Lucas. Working in the research and development departments, he learnt what became the key to his investing; knowledge which gave him a unique perspective on the stock markets.

Dr Tubbs went on to create the R&D Scorecard which was presented annually to the Department of Trade & Industry and the European Commission. It was a guide for European businesses on how to improve prospects using correctly applied research and development. He has been a contributor to MoneyWeek for many years, with a particular focus on R&D-driven growth companies.