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UMIC ® UMIP ® UMI 3 THE UK NEEDS INNOVATION Dr Cassie Doherty, Business Development Director, IP Group plc Since the 2008 stock market crash, 'innovation' has become the buzzword, a key driver to pull the UK economy out of the doldrums and drive growth and productivity. The strength of the UK research base is the main reason why this innovation economy can be a reality. The UK is responsible for 15.9% of the world's most highly cited articles and has now overtaken the US to rank first by field weighted citation impact. Both impressive statistics when taking into account the UK has only 4.1% of the world's researchers (International performance of the UK research base – 2013, BIS). The strength of the UK research base is well recognised by high profile fund managers. Neil Woodford, who recently moved from Invesco to set up the eponymous Woodford Investment Management, commented that "No other country matches Britain in its track record of scientific discovery … We do science and innovation incredibly well, but we have a lamentable record in converting top science into top businesses." Universities and researchers are now embracing the benefits of building on their research activity by commercialising their work through industry collaborations, IP licenses and spin-out companies. Although commercialisation offers major benefits to the UK economy, Neil's comment on a lamentable record rings true. The concept of 'the valley of death' is widely accepted as a challenge to moving technologies from the bench to a point where they are a commercially successful business or product. But this valley of death can be bridged. Adequate funding, a credible and experienced team, a comprehensive understanding of the market need and requirements of a new product as well as a clear and sensible plan for a route to market all help to reduce risk and enable businesses to succeed in a competitive market. IP Group has supported the commercialisation of novel technologies through spin- out companies since 2001 and we have a unique approach to building outstanding businesses. Our model has been extremely successful and we now have around 90 portfolio companies that are almost all based on intellectual property arising from research carried out in UK Universities. At 31 December 2013, the aggregate value of the companies in which IP Group had an investment exceeded £1.7 billion. These companies span a range of sectors and stage from early- stage, Proof-of-Principle opportunities to companies floated on the AIM stock market. Notable examples in the portfolio include Oxford Nanopore Technologies Ltd, which is exploiting a technology for rapid DNA sequencing and has received a lot of media attention, Proximagen, which was acquired in 2012 by Upsher-Smith in a deal worth up to £357M, and Tissue Regenix Group plc, a spin-out from the University of Leeds that has proprietary technology for regenerative replacement body parts, now worth £130M. Working closely with academic teams and universities through their technology transfer offices is essential to how we operate and getting involved with an opportunity at an early stage is important. Our model is to provide businesses and early- stage opportunities with more than just traditional venture capital, providing companies with access to business building expertise, networks, recruitment and business support. As an example, our in-house recruitment function, IP Exec, is a leading specialist executive search consultancy focussed on advising early- stage and high-growth technology companies on their leadership (executive and non-executive directors) requirements and then recruiting appropriate people into these positions. For new opportunities, we frequently provide Proof-of-Principle or, as we term it, 'grub funding' as the first step. Dr Cassie Doherty gives us her views on early-stage technology investment and IP Group's Proof-of-Principle fund with the University 4

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