Direct Investments

OXGENE: An EIS journey

To continue the updates that we are providing over the summer on some of our most successful companies in our portfolio, this blog is focused on OXGENE™ (the trading name of Oxford Genetics LTD), which is part of our Life Sciences and Biosciences sector.

OXGENE™ is a synthetic biology company focused on developing innovative and scalable manufacturing solutions in the gene, cell, and antibody therapeutics markets, which represent the company’s three core business divisions. By using the company’s underlying genomics Lego-like DNA construction platform each business unit provides a range of catalogue products, licensable technologies and custom service solutions. These are primarily delivered via automated high-throughput robotic work flows to maximise profitability. OXGENE™ aims to dominate the market place for CRISPR gene editing and gene therapy manufacturing systems worldwide.

The company commenced regular trading from January 2013 as an e-commerce DNA catalogue business. In October 2014, a strategic alliance was forged with an international leader in the provision of research biologics, for global distribution of these products under a joint-label. Following a strategic review in 2015 and a follow-on investment round, the business re-purposed its expertise in DNA engineering to develop technologies and production platforms to target the rapidly expanding markets for CRISPR and gene therapy. Since this transition, the business has signed a number of licensing agreements and been awarded multiple grants totalling over £2million to expediate its research.

Over the period from 2013-2015, the business received investment from five EIS funds, and the company minimised how much funding was required, by continuing to expand sales revenue. In recent years, the business has expanded its executive team and board with the addition of David Hames (founder of Science Warehouse) as chairman and Matt Baker (founder of Antitope and previously CSO of Abzena plc) as NED. Following the EIS funds investment, Mercia Asset Management PLC has invested on a number of occasions, and in August 2017 it invested an additional £2.0million alongside Invesco Asset Management, as part of a £7.5million investment. Overall, sales revenues are doubling year-on-year, and this growth rate is expected to accelerate in the next 12-18 months. The shares are valued at up to 6.8x the cost of investment.

Within the last few weeks, OXGENE™ has announced a multi-million pound contract with a very large global ecommerce provider of reagents, and there are various other large contracts in negotiation, so the future for OXGENE™, and therefore many of Mercia’s EIS investors, looks very promising.

OXGENE™ is one of our leading companies in both the EIS portfolio, and Mercia’s promising direct investment portfolio. As our CEO, Dr Mark Payton, states:

“OXGENE™ is a good example of our promising direct investment portfolio of companies, many of which are now in revenue growth. The company has an extensive intellectual property estate coupled tightly with its global access to CRISPR technology. The growing quality and number of its clients is testament to the fact that the team is at the leading edge of synthetic biology innovation. I expect more positive developments from OXGENE™ and a number of our other direct investments in the near to medium term.”