For its success in turning ideas into innovations – in Life Sciences, BioCity’s incubator is fed by its own Bootcamp and its own Accelerator
BioCity, a public/private enterprise Incubator in Nottingham, has grown opportunistically and organically over the last ten years to support the evolving changes in the life science industry; and has plans to expand its contribution further.
BioCity was founded in 2003 on what was the Boots R&D site in Nottingham, when BASF took it over, managed it for two years and then gifted it to Nottingham Trent University, at which point it was run jointly by the University of Nottingham, Nottingham Trent University and the East Midlands Development Authority. It is managed by a Board of eight members and Glenn Crockett has been its Director since the outset – previously Head of Biotech Practice at Ernst and Young, and with a DPhil in Immunology.
Grants for refurbishment of £9mn were provided by EMDA and by the European Development Fund and initial running costs were covered by a university loan of £800,000. It took two and a half years to break even and it now operates with a reasonable surplus. While 450 people were made redundant on the closure of Boots R&D, there are now 600 people on the site (and some who have already moved on), and perhaps a total of 800 employed in all as a result of these developments.
A pipeline of businesses was developed gradually for the site, based on the philosophy of helping companies to succeed by providing them with space and services, but also with support.
For the last five years, BioCity has run – Wednesday to Friday – an annual 3-day bootcamp for aspiring businesses, consisting partly in learning and mostly in lots of opportunities for people to test their ideas. These have been run by three senior people in Biocity, six people from outside, and contacts available with some 40 people available as mentors, all of them working in life sciences. In 2010, when Astrazeneca closed a local site, the Bootcamp generated 12 new businesses for the site, and in the last quarter of 2011 it produced another dozen.
Incubatees, when they have an implementable or fundable proposition, can then pitch for further period of structured support – on a one-to-one basis (though a second person may also be brought in) for six to nine months (the period made clear at the outset). People with their own day jobs or part-time work many of whom have experience (and other clients) in Life Sciences, are made available – to provide guidance and challenge, offering different perspectives, getting the participants to challenge the market, to look for revenue sources, to make a business plan, and to iterate that plan; teaching about investors and shareholdings, helping them to pull together a package for potential investors, and to handle possible due diligence; and then possibly but not always taking a board seat.
In addition to the life science businesses, active steps were taken to bring onto the site businesses with expertise that was relevant to these young businesses, such as in IP, finance, PR etc, so that their advice would be readily available on tap.
Investment in these businesses has been provided by the 2-year old Mobius Investment Fund, which plans to invest up to £500k, and matching funds have been provided by the City Council; and these have been leveraged by Angels approximately 6:1. Initial tranches of investment have been of the order of £25-50k, but there is an emerging need for tranches of up to £200k, which falls in a gap between the scope of existing investment funds.
In addition to the 73 businesses in the incubator, there is a small hot desk area, and people on adjacent desks have on several occasions paired up; and there is a small group of virtual tenants, who have all the benefits of the physical tenants, but no office; and there is a café which is used for informal meetings and lunches. And there is a big stairwell which provides a ready opportunity to meet many of the occupants!
There are regular events – of many sorts: five-a-side football, golf club meetings, Christian groups, business lunches with invitees – finishing with a discussion of one person’s problem; there are events where medical conditions are the subject of discussion; and every few months, there are no-agenda curry evenings – for CEOs.
Under consideration is a 13-week programme for people who are already self-earning and are interested in being involved in a life sciences business; and an application has been made for a grant from European Funds to start this.
Among successes have been R5 Pharma, a contract formulation and early-stage manufacturing company that started life in the incubator, that has made a 40 times return for its investors; and Sygnature Discovery, another successstory.
Around half of all life science start-ups are service based, and it is felt that these will overtake the jobs lost as big pharma has closed its research sites. The expectation is that the UK life science industry will increasingly be dominated by businesses providing discovery and development services, with a lot of that activity being undertaken in a more commercial manner with our universities. Drug discovery and new therapeutic businesses will still be created with a small number obtaining greater levels of investment from just a handful of specialist investors. And a larger slice of that funding is expected to come from China and the East.
After very careful analysis of appropriate opportunities, it has been decided to attempt to start a similar operation in Scotland, where there appear to be as many active and thriving life science companies. A site has been acquired, with ample space and a considerable amount of equipment left behind by the former occupant; and there are already 10 companies based there. A CEO is in course of being appointed; and the proposal is to make use of a professional fund manager and to seek funds from the Wellcome Trust, Capital Growth Fund and Pension Funds.